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• Banking
in the
is the time!
How bankers
are planning
for NOWs
• Quality and
integrity for
Interest rate
Federal Reserve Bank of St. Louis

"At MNB we will respond quickly and
accurately to your needs for overlines
and liquidity loans. Because we
realize the way these transactions are
handled can have a critical impact on
operational procedures and your abil­
ity to serve customers.
"Our first priority is to provide
superior customer service. To be a
partner in helping meet challenges
and goals. We begin by developing an
in-depth knowledge of each individ­
ual correspondent bank's objectives.
Then, we provide our expertise and a
wide range of services to help attain

these goals with profitable results.
"By consistently delivering a high
level of performance and generating
fresh new approaches to fulfilling
needs, we are able to build confidence
and that special bond of trust that
comes from working and succeeding
Learn more about how MNB can
work for you. Call 319/398-4320 or toll
free, 1-800-332-5991 and talk to Terry
or any of our other MNB
Correspondent Bankers: John E.
Mangold, Stan R. Farmer, Jerry N.
Trudo or Dale C. Froehlich.

Merchants National Bank m
Cedar Rapids, Iowa 52401

Member F.D.I.C.
Federal Reserve Bank of St. Louis

When you absolutely must
have a form quickly,
what can you expect from Deluxe?

When a bank runs out of an essential form, it must have immediate
help. Deluxe forms customers need only pick up the telephone and
call 1'800328'9600 for a rush reorder. Usually the order can be
shipped within 24 hours or less. Routine orders are produced and
shipped within 10 days of receipt.
Just because you get rush service doesn’t mean you sacrifice
quality or attention to detail. Every job is carefully proofread several
times during the manufacturing process and MICR tested for read'
ability. Quality materials and workmanship are used, and your
satisfaction is guaranteed.
Put your forms in the hands of the Pro Formers! Return this
reply coupon for a Forms Catalog, price information and more
details, or call toll free.
Federal Reserve Bank of St. Louis

Sen d m e a D eluxe F orm s C atalog and p rice in form ation .
N am e_________________________________________________
B ank__________________________________________________

-S tate.

.Zip C o d e.


Forms Division/P.O. Box 43497
St. Paul, Minnesota 55164
Federal Reserve Bank of St. Louis




In-bank processing barriers shattered.
Nowin-house control within reach
of any bank-affordably.
IDP: Years in th e
m aking

C om plete in<bank data
processing capability

Years of comprehensive
research and development
now enable us to offer you
the latest technology in data
entry and proof operations
PROCESSING. Now you can
have all the benefits of in-bank
control plus the economics of
regional processing.

IDP gives you complete inhouse processing capability
using U.S. National's program­
ming expertise and personnel.
You'll have direct on-premise
control of your operation—
along with better cash and float
management, improved secur­
ity, lower labor costs and
increased productivity.

We'd like to prove IDP is an
affordable alternative for your
bank's processing needs. We ll
assess your current volumes
and help you choose the right
equipment whether it be on-line
proof, the IBM 3694. the NCR
7750. or the IBM System 34.
In short, we will work to design
and install an affordable sys­
tem that fits your bank.

Join the evolution!



No m ore courier costs
or m andated schedules

If you want more control over
your operations, get IN-BANK
(IDP)— available now from
U.S. National and our affiliate
Northwest Computer Services.

With IDP, entry data is cap­
tured at proof and transmitted
electronically to us for proc­
essing. Reports are printed in
your bank. This courierless
system means you’ll no longer
be dependent upon data proc­
essor schedules or courier
timetables. That means you
set your cutoff times to fit the
needs of your customers.

IDP is here now, ahead of its
time, and is right for your bank.
If you'd like to join the evolution
call us today at 402/536-2072.



US National Bank
Member FDIC

Of Omaha

banco -

Federal Reserve Bank of St. Louis

c U.S, National Bank 1080


DECEMBER 1980 • 87th Year • No. 1407

b n



Plan for profit with NOW accounts

Christmas is the traditional holiday that fills our hearts and minds with thoughts
of contentment, happiness, nostalgia and the warmth of family and friends. It
has always been a time for giving of ourselves, as well as forgiving others with
whom we may have had differences. As we reflect on the blessings we enjoy as
citizens of this great nation, our prayer is for genuine peace among nations in the
coming year, and a share of those generous blessings for all who are oppressed
and hungry in the world.

interest on checking
January 1st.





NOW is the time!

Plan for profits with NOW accounts—Carl C. Nielsen



Planning for NOWs

How area bankers are getting ready for the new era


Banking in the 1980s

Kenneth Myers looks at flexibility and change


Interest rate futures

Do they belong in 1981 planning?—Robert Wahlgren and Robert Zubak


Quality and integrity

Traits that have built the Travelers Cheque industry




Bank Promotions
Corporate News
Twin cities
South Dakota
North Dakota

Des Moines
What’s New
Index of Advertisers

30615th Street, Des Moines, Iowa50309 Phone (515) 244-8163


Business Manager

Malcolm K. Freeland

Ben Haller, Jr.

Mike Freeland


Field Representative


Glen Hicks

Associate Editor
Louise RItchhart

Field Representative
Paul Masters

No. 1407 Northwestern Banker (USPS 397-620) is published monthly by the Northwestern Banker Company, 306 Fifteenth Street, Des
Moines, Iowa 50309. Subscription $1.00 per copy, $12 per year. Second class postage paid at Des Moines and at additional mailing office.
Address all mail (subscriptions, change of address Form 3579, manuscripts, mail items) to above address.

N o rth w e s te rn B en ke r, D e c e m b e r,
Federal Reserve Bank of St. Louis



The Credim atic System Coverage
• Instant access to over 45 million credit files nationwide
• Coverage in 31 states

Specialized Services

Credit Reporting Services

A u to d a ta (N ational & S tatew id e Tape Files)
C re d iso u rce (Full C redit File)
S y ste m -to -S y ste m R eporting
W atch Service
A lert Service

• P resc ree n e d P ro m o tio n s
• A cco u n t R eview s
• C red it C ard R ecovery


For more information contact the office nearest you
Western Region
bOO 13th Street
Denver, CO 80204
(303) 893-5454
Federal Reserve Bank of St. Louis

Northern Region
2850 Metro Drive #533
Minneapolis, MN 55420
(612) 854-0915

N o rth w e s te rn B an ke r, D e c e m b e r, 1980



Bank Promotions


ROMOTIONS and other an­
nouncements have been made by
the following banks:
American National Bank and
Trust Company of Chicago: Robert J .
Buskas has been elected a senior vice
president of the bank. Mr. Buskas
will continue in his position as
manager of banking operations.
Mr. Buskas has spent his entire
banking career in the field of
operations. He joined American
National Bank in 1968. He was
elected operations officer in 1971, a
second vice president in 1973 and a
vice president in 1976. A graduate of
Northwestern University, Mr. Bus­
kas is a past chairman of the Loop
Bank Systems Group.
The bank also announced that five
officers have been promoted to vice
president: Steven H. Baer, Stephen
E. Hoffman, and James C. Tucker,
were promoted to vice presidents in
the commercial banking division;
Lad Kvasnicka J r ., was named a vice
president in the operations depart­
ment, and Robert F. Lindquist, was






c ~

For Installm ent Loans



• Autom ated
• Manual

V ...... ....

............. J

call or write:

1678 Northwestern Bank Bldg.
Minneapolis, MN 55402
(612) 333-2261

V __________

N o rth w e s te rn B an ker, D e c e m b e r,
Federal Reserve Bank of St. Louis




named vice president in the corporate
finance department.
Mr. Baer joined the bank in 1973
after completing his undergraduate
and masters degree work at the
University of Denver. He served in
both the Chicago office and London
branch of the bank before his election
as an officer in 1976 and a second vice
president in 1978 in the commercial
banking department.
Mr. Hoffmann joined the bank in
1972 as a credit analyst. He was
promoted to officer in 1975 and to
second vice president in 1977 in the
commercial banking department.
Mr. Hoffmann is an economics
graduate of the University of Illinois.
Mr. Tucker joined the bank in
1974. He was elected to the position
of officer in 1976 and second vice
president in 1978, in the commercial
banking department. Mr. Tucker is a
graduate of Purdue University and
holds his MBA from the University of
Mr. Kvasnicka joined the bank as a
management trainee in 1970 after
receiving degrees from both the
Illinois Institute of Technology and

Northwestern University. Promoted
to officer in 1974 and second vice
president in 1977, he will continue as
manager of item processing.
Mr. Lindquist joined the bank in
1978 as assistant comptroller after
fifteen years of experience in the
banking industry. A graduate of the
University of Montana, Missoula,
and the University of California,
Berkeley, he was elected second vice
president in 1979. He now heads the
corporate planning division of
corporate finance.
The bank also announced that six
officers have been promoted to the
position of second vice president:
Debra R. Buesing, who is director of
marketing and manager of staff
services with American National
Educational Corp.; John R. Hopkins,
who manages the bank’s training and
development program; Larry D.
Richman, Michael R. Rossmeier and
David J. Rudis, all assigned to the
commercial banking department; and
Francis T. Stack, who is a member of
the corporate services division of the
trust development group.
Thirteen staff members were
elected to officer positions, the bank
announced: George C. Bermingham
Jr. and Bruce R. Hague to
commercial banking officer; M. Beth
Carlson to customer service officer;
Richard L. Deeter to second vice
president, personal trust division;
Jeseph L. Derezinski to operations
officer; Marla M. Kaiden and Paul M.
McCloskey to commercial banking
services officer; Joseph T. Keating to
trust investment officer; Renee R.
McKenna to m arketing officer;
Michael J. Nichols to second vice
president, trust research and strate­
gy division; Richard N. Pittrof to
second vice president, manager of
data center; Nancy J. Schubering to
trust officer, personal trust, and
Patricia F. Sternberg to trust officer,
probate division.
Bank of America, Los Angeles: A
series of senior executive appoint­
ments designed to strengthen Bank
of America’s operations in Southern
California was announced by Presi­
dent A. W. Calusen.
Executive vice president Thomas
A. Deane will move from his post as
head of the North America Division
to a newly created position as the
bank’s principal liaison for the bank’s
wholesale banking activities in the
highly important Southern California
market. In this capacity, Mr. Deane


Carroll McEntee & McGinley

is pleased to announce
the acquisition of

Geo. B. Gibbons & Company

A new era began June 17,1980, when Geo. B. Gibbons & Company,
Incorporated, which was founded in 1914, joined forces with
Carroll McEntee & McGinley, Incorporated.
In keeping with its 66 year history, Geo. B. Gibbons
& Co. will continue to offer the highest quality of
service as broker/dealers in the municipal bond
industry. The combined companies look
forward to reestablishing relationships
with old friends and customers, and
to making new ones throughout
the country.
Geo. B. Gibbons & Company
will continue operations from
40 Wall St., Suite 5800, New
York 10005. (212) 422-4474

40 W all S treet, New York, N.Y. 10005

Atlanta, Georgia, Boston, Massachusetts, Chicago, Illinois, Cleveland, Ohio, Houston, Texas,
Los Angeles, California, Philadelphia, Pennsylvania, San Francisco, California.
Federal Reserve Bank of St. Louis

N o rth w e s te rn B an ke r, D e c e m b e r, 1980

will have extensive contact with
major corporate customers and
prospective custom ers, working
closely with the World Banking
Division and coordinating with the
California Division.
James B. Wiesler executive vice
president in charge of the Asia
Division, was named to succeed Mr.
Deane as head of the North American
Division which is headquartered in
Los Angeles.
James P. Miscoll, senior vice
president for the b ank’s San
Jose-Central Coast Region, was
promoted to executive vice president
to replace Mr. Wiesler as head of the
Asia Division with headquarters in
Tokyo. With this move, Mr. Miscoll
becomes a member of the bank’s
Management Advisory Council and
of the Executive Council of the World
Banking Division.
Robert J. Finocchio was appointed
senior vice president to succeed
Miscoll as head of the San
Jose-Central Coast Region. Mr.
Finocchio moves up from vice
president and manager of the bank’s
San Jose main office.
As part of the strengthening of the
bank’s management representation
in Southern California, Kyhl S.
Smeby was promoted to executive
vice president. Mr. Smeby will
continue as the bank’s liaison with
Southern California civic, cultural,
and charitable organizations as well
as with local government units. He
joins Mr. Deane and executive vice
president H. H. Jackson as part of a


three-man Southern California execu­ Louis:Clarence C. Barksdale of St.
Louis and Frank A. Jones, Jr. of
tive team.
Memphis, Tenn., have been elected
Bank of New York: William V. to the board of directors of the
Sullivan Jr. has been elected a senior Federal Reserve bank of St. Louis,
vice president, it has been announced chairman Armand C. Stalnaker has
by Elliott Averett, chairman and announced.
chief executive officer. Mr. Sullivan
First National Bank in St. Louis: W.
is associated with the b a n k ’s
LeGrande Rives has been elected
tre a su rer’s departm ent.
senior vice president and Walter D
Continental Bank, Chicago: The Schmitz has been appointed a First
bank has announced the promotion of Union Bancorporation senior vice
five members of
its p e rso n a l
banking services
Warren H. Ba­
con Jr. and Tho­
mas C. Vaughan
have been elected
second vice pres­
C aro ly n A. r . e . WAHLGREN
hanes was pro­
moted to commercial banking officer
Mr. Rives joined First National
and John Moore and Joan F. Neal
were named personal banking Bank in St. Louis in 1976. He was
elected vice president, First Union, in
Six promotions have been announ­ 1980. As senior vice president, he
ced by the bank in the bond and supervises bank operations for First
National and First Union.
treasury services department.
George F . Compton and Robert E .
Mr. Schmitz joined First National
Wahlgren have been elected vice in 1956. He was elected senior vice
presidents. Named second vice president in 1976 when he was given
president were Thomas J . Clark and the responsibility for bank lending
Charles N. Lipps. Diane L. Hatch policy/administration. As senior vice
and Carrie V. Wiley were promoted to president for First Union, he will
continue to handle these responsi­
bond officer.
Federal Reserve Bank of St.
First Midwest Bancorp., Inc., St.
Joseph, Mo.: Mr. Jacob M. Ford, II,
chairman of the
board, has an­
nounced the pro­
are pleased to announce that
motion of Robert
F. Coil to senior
Kenneth W. Leaf
and senior loan
Mr. Coil, who
has jo in ed our s ta ff as
spent thirty-two
of his thirty-four
Senior Consultant
years in banking
as a lender, will coordinate and
supervise the bank’s lending policies.
He will also serve on the loan auditing
committee of the bank’s holding
company, First Midwest Bancorp.,

M iller-S w eeney Com pany
Bank Consultants

1000 Currie Avenue
M inneapolis, M innesota 55403

N o rth w e s te rn B an ke r, D e c e m b e r,
Federal Reserve Bank of St. Louis



Harris Bank, Chicago: John L.
Stephens, executive vice president of
public and employe relations, has
been elected chairman bank person­
nel division of the American Bankers



At last, a look at
the unheard-of:
an actual overline ad.

You may have noticed that most
banks don’t advertise the fact that they
offer overlines to their correspondents.
But Continental Bank does. In fact,
we’re running this ad to make a bid for
overlines—from our correspondent banks,
and from a lot of other banks we’d like to
have as correspondents.
Our approach to overlines is simple.
When our correspondent values a
customer enough to lend to its legal limit,
that correspondent has every right to
expect some pretty serious consideration
from us.

You can expect fast answers, too.
At Continental, credit requests aren’t
bounced from desk to desk. They go direct
to your account manager—who can say
“yes” or “no” on most loans. You get a
decision fast. And firsthand. From the
person who made it.
Call John Tingleff at (312) 828-2191
with your request. Getting you together
with an overline could earn us more of
your business. And that’s what we’re
It’s what you expect from a top
correspondent bank. At Continental Bank,
it’s reality.

Continental Illinois National Bank and Trust Company of Chicago
231 South LaSalle Street, Chicago, Illinois 60693
Federal Reserve Bank of St. Louis

N o rth w e s te rn B en ke r, D e c e m b e r. 1980


Association. He also serves on its
board of directors and as an ex-officio
member of the ABA Governing
Irving Trust Co., New York:
James F. Ganley has been elected an
executive vice president of Irving
Trust Co. He will also serve as
manager of the Irving’s banking
operations group.
Mr. Ganley joined Irving Trust in
1956, and became an officer and
named manager of the general
systems department in 1967. He was
named an assistant vice president in
1969, and was promoted to vice
president and manager of the record
services group in 1971. Mr. Ganley
was elected a senior vice president
and division manager in 1975.
Mercantile Bank, St. Louis. Mo.:
Charles A. Elfrank and Robert L.
Bergmann were elected executive
vice president, Neal J. Farrell,
president of Mercantile Trust Co. and
vice chairman of Mercantile Bancorporation Inc., announced.
Mr. Elfrank joined Mercantile in
1962 as a business representative in
the bank’s instalment loan depart­
ment. He was promoted to assistant
vice president in 1963, became head
of the instalment loan department in
1964, and was elected vice president
in 1966.
Mr. Elfrank is a director of
Mercantile National Bank of St.
Louis County, Credit Systems, Inc.,
Interbank Card Association and
Mississippi Valley Life Insurance
Mr. Bergmann joined Mercantile
as administrative manager of data
processing and was elected vice
president in 1964. He was elected
senior vice president in 1973. He is
chairman of the board of the Payment
and Administrative Communications
Corporation and its subsidiary, the
Payment and Telecommunications
Services Corporation, the organiza­
tion that administers the Bankwire
electronic funds transfer system.
United Missouri Bancshares, Inc.,
Kansas City, Mo.: The board of
directors of United Missouri Bank of
Kansas City, N.A. elected the
following officers:
Michael R. Snyder has been
promoted to vice president in
commercial business development.
Mr. Snyder joined United Missouri in
1974 and will complete his degree

N o rth w e s te rn B an ker, D e c e m b e r,
Federal Reserve Bank of St. Louis


from the University of Missouri this
George W. Morris, Jr. has been
promoted to vice president in the
investment department. After receiv­
ing his MBA from the University of
Texas at Austin, Mr. Morris joined
United Missouri in 1975.
Randall J. Klein has been named
vice president in United Missouri’s
bond department. Mr. Klein was a
stock and bond broker in California
before joining United Missouri in
1975. He has a degree in finance from
the University of Kansas.
Steve W. Panknin has been
promoted to vice president in the
investment department. With a
master’s in business administration
from the University of Missouri at
Kansas City, Mr. Panknin joined
United Missouri in January of 1977.
J. Willard Olander joined United
Missouri as vice president in the
banks investm ent division. A
graduate of Yale University, Mr.
Olander was previously in invest­
ment banking in the Kansas City
Zions First National Bank, Salt
Lake City: Roy W. Simmons,
president, has
announced the
following promo­
S te v e n
Scott, vice presi­
dent, has been
appointed mana­
ger of the Zions
bank office at 1st
South and Main
St. Prior to his
appointment, Mr. Scott was manager
of the commercial loan department at
the bank’s head office. He joined the
Zions bank organization in 1964. He
attended the University of Utah and
is a graduate of the Pacific Coast
Graduate School of Banking at the
University of Washington.
David L. Clark has been elected
assistant vice president and appoin­
ted manager of the new Zions office in
Delta. Prior to taking his new
position, Mr. Clark was manager of
the Zions bank branch in Panguitch.
He was awarded a BS degree in
business management by Brigham
Young University in 1976.
Jim K. Conover has been elected
second vice president and marketing
officer in the Provo Region Market­
ing Division of the bank. Prior to his
appointment, he was manager of the
Zions bank branch in Kanab and



business development officer for the
Zions Southern Region headquar­
tered in St. George. He attended the
College of Eastern Utah and the
University of Denver.
Some Debt Exempted
From Interest Ceilings
A request from a St. Louis
underwriter of bank and bank holding
company fixed-rate obligations has
led to a Federal Reserve Board
interpretation that Reg Q interest
rate ceilings do not apply to such
obligations whose minimun maturity
is five years, whose redeemable
portion is limited to 5 percent of the
original principal amount per year,
and whose redemptions per holder are
limited to $25,000 a year. The board
decided that those obligations would
not be a “Major source of compe­
tition’’ for deposits issued by deposi­
tory institutions and need not be
included in deposits that are subject
to interest rate ceilings.
Bank Chartering Criticisms
Skirt Current Comptroller
A Senate Banking Committee
study has analyzed the office of the
Comptroller of the C urrency’s
chartering of national banks from
1970 to 1977 but considered few
actions of the present comptroller,
John Heimann, because the study
was begun shortly after Mr. Heimann
was appointed. The study criticizes
“restrictive’’ policies it says protec­
ted existing banks from new
com petition and favored bank
holding companies when charters
were granted. Mr. Heimann beat the
Senate committee report to the punch
recently by revising chartering policy
in a manner that one economist
thinks is “a little too relaxed” and
might be more than the Banking
Committee had hoped for. The Senate
Banking Committee, chaired by
William Proxmire (D-Wis.), will hold
hearings during the 97th Congress on
changes in the law to “make it easier
for new banks to enter the national
banking system.”




Cornell Avenue, Building 3, Denver,
Colo. 80014, and will service clients in
the Denver area for first mortgages,
joint ventures and stand-by finan­
Aetna Business Credit, Inc., cing programs.
Dearborn, Mich.: James H. Mallon
Florida Computer Services, Inc.,
has been named business develop­ Orlando, Fla.: Nestor M. de Armas,
ment officer in Aetna Business president, has
Credit, Inc’s Midwest Marketing announced the
Center. He will be based in the p ro m o tio n of
company’s Detroit office.
John D. Gorman
In his new position, Mr. Mallon to senior vice
will be responsible for providing p r e s i d e n t of
financial programs to serve the needs marketing.
of a wide variety of prospective
Mr. Gorman
business clients throughout the joined FCS in
company’s midwest region, with September, 1979
special responsibilities in the Detroit, as vice president
Toledo and Western Michigan areas, of m a rk e tin g .
according to James T. Pearch, vice Prior to joining FCS, Mr. Gorman
president/Midwest Marketing Cen­ spent five years with Financial
Industry Systems in Hartford, Ct.,
Prior to joining ABCT, Mr. Mallon as vice president of marketing where
was a district manager for the he helped develop and institute the
National Home Financing Corpora­ initial marketing program.
tion in Oak Brook, 111. He holds a BS
degree in economics from Michigan
State University.
Best of TV Awards
Thirty-one commercials were selec­
Banco Mortgage Col, Minneapolis: ted from nearly 200 entries submitted
David E. Beal, president, recently for the Bank Marketing Association’s
announced the
1980 film of the best television comappointments of
mericals of the year.
R. Bruce Siegrist
The “Best of TV’’ competition is
as vice president
conducted annually to select the best
and Michael Jeff­
bank television spots produced by
eries as assistant
BMA members during the calendar
vice president of
year. The purpose of the competition
the com pany’s
is to recognize and encourage ex­
new income loan
cellence in bank television advertis­
division office in
ing. A judging committee composed
four experts in the field of bank
Both men are
marketing and advertising gathered
residents of Denver and have been together to carefully view and eval­
involved in the fields of real estate uate the entries on the basis of such
financing and mortgage banking in factors as originality of creative con­
the Denver area for the past eight cept, execution of production, con­
years. Until their recent union with sumer acceptability, and fulfillment
Banco Mortgage they have operated of stated objectives.
Financial Capital Corporation pro­
Following is a list of the banks
viding commercial loans to builders whose commercials were selected in
and developers in Colorado and the the order they appear in this year’s
Rocky Mountain range.
“Best of TV’’ file: Sun Bank of
Mr. Beal expects that from the new Volusia County, Daytona Beach,
Denver office, Banco Mortgage Co. Fla.; Continental Illinois National
will be able to bring more service to Bank & Trust Company, Chicago;
clients in Colorado, in addition to First National Bank, Boston; First
servicing out-of-state clients in the National Bank, Dallas; Indiana Na­
Rocky Mountain range.
tional Bank, Indianapolis; Citibank,
Banco Mortgage’s new offices will New York; Continental Bank of
be located in Aurora at 12391 E. Canada, Tornonto; Baton Rouge
ROMOTIONS and other an­
nouncements have been made by
the following firms:
Federal Reserve Bank of St. Louis

(La.) Bank, and Great Western Bank,
Also, Valley National Bank,
Phoenix; Bank of New Roads, La.;
Bank of the Commonwealth, Detroit;
Hibernia Bank, New Orleans; Oregon
Mutual Savings Bank, Portland;
First National Bank, Atlanta, Ga.;
California First Bank, San Francisco;
Merchants National Bank, Indian­
apolis; ShawmutBank, Boston; Iowa
Bankers Association, Des Moines;
Sun Banks of Florida, Inc., Orlando;
Trustee Savings Bank, London,
England; Commerce Union Bank,
Nashville, and South Carolina Na­
tional Bank, Columbia.
Also, Capital National Bank,
Austin, Tex.; Allied Irish Banks,
Dublin, Ireland; Irving Trust Compnay, New York; AmeriTrust Com­
pany, Cleveland; Texas Commerce
Bank, Houston; Liberty National
Bank, Louisville, Ken.; American
Fletcher National Bank, Indianpolis,
and First Wisconsin National Bank,
Taxation of Banks
IRS rules on the time of deductibil­
ity of a national bank’s year-end
semiannual assessment payable to
the Comptroller of the Currency.
IRS held that a national bank that
uses an accrual method of accounting
on a calendar year basis may not
accrue on December 31 the semi­
annual assessment that the bank is
required to pay to the Comptroller of
the Currency on or before January 31
for the six-month period beginning
January 1.
In Rev. Rul. 80-230, IRS notes
that the national bank uses an accrual
method of accounting for reporting
its income on a calendar year basis.
The C o m p tro lle r’s sem iannual
assessment is not due and payable in
the year on which it is based even
though the amount can be deter­
mined with reasonable accuracy as of
the year’s last business day, IRS
Support Override of
State Usury Ceilings
Senior Deputy Comptroller Lewis
G. Odom said recently the Office of
the Comptroller of the Currency
supports Congressional action on
legislation to override state usury
ceilings on consumer lending. “Such
action would recognize existing
market realities and result in sub­
stantial public benefits,’’ he said.
N o rth w e s te rn B an ke r, D e c e m b e r, 1980


Convention Calendar
Oct. 3-7—ABA 107th Annual Convention,
San Francisco.
Nov. 8-11—ABA National Agricultural
Bankers Conference, Sheraton, Wash­
ington, D.C.
Nov. 15-18—ABA National Correspondent
Banking Conference, Hyatt Regency,
Kansas City, Mo.

ABA—American Bankers Association
AIB—American Institute of Banking
BAI—Bank Administration Institute
BMA—Bank Marketing Association
IBAA—Independent Bankers Association
of America
NABW—National Association of Bank
Women, Inc.
RMA—Robert Morris Associates

State Conventions & Schools

National Conventions & Schools

Mar. 4-6, 1981—AMBI Consumer Credit
Conference, Marriott Hotel, Chicago.


Feb. 15-18—ABA Community Bank Execu­
tives Conference, Hyatt Regency Phoe­
Mar. 22-24—ABA National Credit Confer­
ence, Chicago Marriott.
Mar. 22-25—ABA National Instalment
Credit Conference, Los Angeles Bonaventure.
Mar. 22-26—IBAA 51st Annual Convention,
Las Vegas Hilton, Las Vegas, Nev.
May 31-June 3—ABA National Marketing
Conference, Fairmont Hotel, Denver.
Sept. 13-16—ABA National Personnel Con­
ference, Loew’s Anatole, Dallas, Tex.
Sept. 27-30—National Association of Bank
Women’s annual convention, Hyatt Re­
gency, Chicago.

Gunderson Announces
New ABA Regional Directors
The 1980-81 American Bankers
Association regional directors were
announced today
by ABA Presi­
dent Lee E . Gun­
derson. Mr. Gun­
derson, president
of the Bank of
Osceola, W is.,
was elected pres­
ident at the asso­
ciation’s annual
c o n v e n tio n in
Chicago recent­ C. F. ARMSTRONG
lyRegional directors serve on both
the ABA council and board of
directors for a one-year term. The
directors are elected by banking
colleagues in their regions who are
members of the council.
As participating members of the
decision-making and policy-imple­
menting groups of the ABA, regional
directors play a key role in the
representation of their region’s
banking needs and interests.
The new directors are:
• Region I (Connecticut, Maine,
Massachusetts, New Hampshire,
New Jersey, New York, Pennsylva­

N o rth w e s te rn B an ker, D e c e m b e r,
Federal Reserve Bank of St. Louis


Bell Investment President
Appears on Network TV
A leading Iowa agricultural
mortgage banker recently appeared
on national television to discuss the
outlook for long-term agricultural

July 16-18, 1981—Iowa Independent Bank­
ers 10th Annual Convention.
Feb. 11-12—MBA Senior Management
Conference, Hyatt Regency, Minneapo­
June 24-26, 1981 —MBA 78th Annual Con­
vention, Big Sky.
May 7-9—NBA annual convention, Lincoln.
June 10-12, 1981—WBA 73rd Annual Con­
vention, Jackson Lake Lodge.

nia, Rhode Island and Vermont):
Herbert W. Cummings, executive
vice president Citizens Bank, Provi­
dence, R.I.
• Region II (Illinois, Indiana,
Kentucky, Michigan and Ohio): O.
Trigg Dorton, president Citizens
Naitonal Bank, Paintsville, Ky.
• Region III (Alabama, Delaware,
Florida, Georgia, Maryland, Missis­
sippi, North Carolina, Puerto Rico,
South Carolina, Virginia, Washing­
ton DC and West Virginia): Charles
C. Lanham, president Citizens
National Bank of Point Pleasant,
Point Pleasant, W.Va.
• Region IV (Arkansas, Kansas,
Louisiana, Missouri, Oklahoma and
Texas): George R. Curry, president
and chairman Central Bank, Leba­
non, Mo.
• Region V (Iowa, Minnesota,
Montana, Nebraska, North Dakota,
South D akota and W isconsin):
Christy F. Armstrong, president
American Trust & Savings Bank,
Dubuque, la.
• Region VI (Alaska, Arizona,
California, Colorado, Hawaii, Idaho,
New Mexico, Nevada, Oregon, Utah,
Washington, and Wyoming): Wilson
Barrett, vice chairman of the board
Valley National Bank of Arizona,
Phoenix, Ariz.

IOWA agricultural mortgage banker James
O. Melton, president, Bell Investment Co.,
Burlington, IA., discusses the outlook for
long-term agricultural credit during a taped
interview for the Cable News Network.

James O. Melton, president, Bell
Investment Co., Burlington, la., was
featured on the Cable News Network
in late October. Cable News Network,
a 24-hour all-news cable service,
reached nearly four million house­
holds across the United States.
Mr. Melton’s interviews were
videotaped in CNN’s Chicago
bureau. The reports were later
telecast on CNN’s “National Farm
R ep o rt,” hosted by agriculture
correspondent John Holliman in
Washington, D.C.
Bell Investment Co., one of the
largest farm and agribusiness
mortgage bankers in the nation, is
headquartered in Burlington and has
eleven other offices throughout the
midwest and delta states.
E .F.I. Contracts for DOTS
Electronic Funds Illinois, Inc., a
statewide electronic banking system
developed for the sharing of on-line
terminal processing services, has
announced the signing of a contract
with Diebold, Inc. for that company’s
DOTS software package.
The first two banks in the E .F .I.’s
network were First National Bank of
Springfield and Capital Bank and
Trust of Springfield.


The Iowa Team
of the Hams Bank.

Jim Hill

Dick Ristine

Jim Hill, Dick Ristine, and Tom Martin are the
Harris Bankers who travel in Iowa. They are
dedicated professionals. But, best of all, the y’re
backed by management that is tru ly com m itted to a
w inning effort.
When questions or problems arise, call Jim,
(312) 461-2745; Dick, (312) 461-2747; or Tom,
(312) 461-7512. They and the ir friend w ill get you the
help you need.
You should have a Harris Banker.®

Harris Trust and Savings Bank, 111 W. Monroe St., Chicago, IL 60603. Member F.D.i.C., Federal Reserve System.
Federal Reserve Bank of St. Louis

N o rth w e s te rn B an ke r, D e c e m b e r, 1980


New Robert Dunaway Farm Books Reviewed
STATE planning can be a
fulfilling and financially reward­
ing experience for farm families, says
Robert Dunaway, author of “How To
Plan Your Estate, Second Edition.”
Mr. Dunaway is tax editor for Farm
Progress Publications and editor/
founder of Farm Tax Saver
“But before you can create a
comprehensive estate plan, you first
need a good working knowledge of the
basics of estate planning,” explains
Mr. Dunaway. That’s what we do
with “How To Plan Your E state.”

“We give the basics on estate
planning so that readers can analyze
their estate plans, ask intelligent
questions, and end up with a
workable and satisfying estate plan.”
Mr. Dunaway’s new book explains
how to estimate the estate taxes on
your own farm. Then he explains the
more common ways to head off estate
tax problems.
“How To Plan Your Estate,
Second Edition” is complete and
up-to-date, including the 1980
carryover basis repeal. It also sons into the farming operation,
contains new chapters on working estate planning for young people,
charitable bequests, and where to
find estate planning help.
Another new farming book, “Farm
Lease Guide,” describes in detail how
to design a lease agreement to fit
modern-day farming. The book,
believed to be the most complete book
on farm leasing available, emphasizes
that any lease arrangement needs to
be fair and equitable to both the
tenant and the landlord.
The reader is led step by step
through the planning of a lease. All
types of leases—crop-share, cash
rent, flexible cash rent, livestock
share lease, pasture lease, building
lease, and labor and profit sharing
leases—are explained in detail. The
easy-to-read book points out that no
two farm situations are exactly alike,
so each lease must be tailored to each
individual farm.
For more information on these
books, write Farm Progress Publica­
tions, Box 1317, Des Moines, Iowa,

Better business
through risk
An interest rate
futures program
tailored to my
bank’s needs

The needs of your bank are unique, and when it comes to planning an
interest rate risk management program you deserve personalized service.
The expert personnel of Dean Witter Reynolds’ Financial Futures Divi­
sion offer you on-site development of a complete hedging program
responsive to your special requirements. We can provide training for your
personnel, coordination of a total program and access to our computerized
market/arbitrage analyses.
For more information, please write or call Merrill R. Johnson or
Randall C. Peck, Regional Specialists in Financial Futures Hedging,
Dean Witter Reynolds Inc., 1818 Douglas Street, Omaha, Nebraska
68102. (402) 449-1600.

One investment firm
you’ll be glad to hear from.

Member SIPC

N o rth w e s te rn B an ker, D e c e m b e r,
Federal Reserve Bank of St. Louis


Publish New
Insurance Guide
What is a quick and easy way to
buy adequate bank insurance? How
can a bank limit its loss potential?
Where can you locate an informative
detailed reference guide? The new
Community Bankers Insurance Buy­
ing Guide presents answers to these
and other similar questions on risk
Published by the American
Bankers Association’s (ABA) Insur­
ance and Protection Division, the
Guide is designed to assist communi­
ty bankers in obtaining the most
economical timely insurance, and
guidelines for purchasing adequate
insurance coverage.

At United Bank of Denver we have
the best Correspondent Bankers
in the Rockies and Eastern Rains.
And to stay out in front, we’re
always trying to find ways to serve
our customers better.

Dorit call us.
We’re calling onyou.

In the field of Correspondent
Banking that means seeing our
customers more often. Getting to
know their banks and their needs.
In short, we believe the best
service comes from knowing the
customer best.
That’s why our nineteen Corre­
spondent Bankers are going to be
spending up to 40% of their time
Federal Reserve Bank of St. Louis

on the road calling on you. Not sit­
ting behind their desks. The phone
company may not like our style,
but we’re sure our customers will.

SSUnited Bank of Denver
Correspondent Banking Group
1740 Broadway
Denver, Colorado, 80217
(303) 861-8811
National Association,
Member FDIC


James Russell, Correspondent Bank Officer, Twin City Metro Area (612) 291-5581

“I can increase your services
without increasing your staff.
“ There are times when a bank’s customers need
more services, more expertise, than it has
available. Sometimes situations arise that require
a staff much larger than you may have.
“ That’s where I can help by bringing the full
resources of First Bank Saint Paul to bear on
your problem. And when you get a bank with
our size and experience working for you, you’re
money ahead.
“ My job is to help analyze your needs and
provide the extra services you require without
increasing your staff.
“ To do my job effectively, I stay on top of
the latest developments in banking. I’m in

N o rth w e s te rn B an ke r, D e c e m b e r,
Federal Reserve Bank of St. Louis


constant contact with banks in the metro area.
“ My job is to make your job easier. So give
me a call.”

First Bank
Saint Paul
Correspondent Bank Division

W e do our job .
You get the credit.
The First National Bank of Saint Paul • Member FDIC


Plan for profit with NOW accounts
Chairman and Associate Professor
Department of Administration
Wichita State University
Wichita, Kans.

we can really talk about marketing tfOW
accounts, we must consider an essential question.

□ THE AUTHOR has an extensive background in the field of
marketing, market research and general business administration.
In addition to his present position at Wichita State University, he
has been a professor in the College of Business administration at
the University of Nebraska and currently is president of Carl
Nielsen & Associates consulting firm in Wichita. In this latter
capacity, he has been in demand as a speaker and consultant for
state banker associations to help their members prepare for the
advent of NOW accounts when it becomes legal to offer them
January 1,1981. The following remarks are ones he gave as part of
an in-depth slide talk at the Nebraska Bankers Association
Marketing Conference in Kearney recently, and are reprinted with
his permission. Most banks should have their NOW plans ready
to go by now, but Mr. Nielsen’s comments may help some banks
with last-minute assistance, or to reinforce and monitor present

What are your bank’s objectives?
Do you want to use the NOW account to:
1. Increase market share?
2. Retain existing accounts?
3. Maintain profit level?
Some serious questions must be answered as you
review and analyze each of these three points.
1. Increase Market Share:
Can you be “all things to all people”? Banking has
tried this; now, you must reconsider it. Get a customer
profile, then ask yourself:
• Whom do you want to serve?
• Do you want to create a price image? The message in
Federal Reserve Bank of St. Louis


N o rth w e s te rn B an ker, D e c e m b e r, 1980


Market Research

some places has been “cheap” and “giveaway.” Is that
the image you want?
• Can you afford to lose market share? How about the
low balance accounts on your books that cost you
money, ones you could do without? The NOW account is
not a market share device—it’s a higher cost service and
is not for low balances.
The New England experience found: 1. NOW’s were
costly and required high level minimums. 2. The
customer base was important. 3. NOW’s were not a
market share device. The key is that NOW’s are
transaction accounts, are costly and must be sold.
Banks which set higher limits (New York, for example)
got higher balances; those with lower limits got lower
2. Retain Existing Accounts?
Ask yourself these questions:
• How much do you really know about your
customers? Again, there is a need for a customer profile,
one that determines their other financial relationships,
their total relationship with you.
• Are you selling the same things your customers are
buying? Learn your customer perception of what they
think you are.
• Have you been successful at cross-selling? There is
no merit if you lose money on four services instead of
two; therefore, analyze to make sure your services are
priced right.
• How important is retail business? I t’s expensive,
but needed, and the key still is if it’s expensive now, it
will be more so with NOWs. So, again, price the product
3. Maintain Profit Level?
You must do this if you wish to survive. Answers are
needed to these:
• Who bears the cost? Any persons who have done
financial analysis will state that you can’t afford to
absorb the NOW cost.
• How profitable is retail business? It depends on
your pricing.
• Should you create a value image? There is always
some perceived value to a customer. The Shawmut bank
set out its “value” package at $1,000 on the theory it
could drop if experience showed the need for a re­
duction. But, it has stayed there. Another competitor
bank started out low, and continued to raise its required

N o rth w e s te rn B an ke r. D e c e m b e r,
Federal Reserve Bank of St. Louis


Once you have reviewed and set your objectives, it’s
time to turn to your market research. A customer profile
is a must; the majority of banks have never developed
one. It need not be overly sophisticated. Only when you
prepare such a profile can you answer:
1. Whom do you want to serve? Target certain
customer groups.
• High income customers—obviously, yes.
• “Across the board” —can you afford to continue
• Importance of household DDA? —Is it really
important enough to maintain them?
2. How loyal are your customers? You can’t answer
this without a good customer profile. Also, people don’t
think that much about banks—they don’t shop
around—so th at’s good and you can capitalize on this
3. Who wants NOW accounts?—the more affluent
4. Have you been able to cross-sell your household
accounts?—I mean with profit. If so, profitable pricing
may make you vulnerable to lose such accounts, those
that are no longer profitable.
As part of this market research, analyze your existing
demand deposit accounts. Most (75 % to 90 %) of NOWs
come from DDA; the remainder come from savings.
Some banks in New England may have attracted
business from across state lines when they alone could
offer NOWs, but that potential will not be there for you
because all states around you will have NOW authority.
The sophisticated customer has great initial
acceptance. Better customers will ask when you will
offer NOWs, then move to another bank if you fail to do
What does this mean to you? Aggressive promotion of
NOW accounts is really just appealing to the lower
balance segment. If you spend a lot of money on such
promotion, you may be doing the wrong thing. If you
don’t keep your high-balance customers by offering
NOWs, you may lose them. Some customers may have
to be invited to leave. If you do this, do it tactfully. It
can be done through pricing.

Pricing NOW Accounts
Combine your objectives with your positioning
strategy to determine price. Free or “cheap” accounts
may increase your market share at the risk of losing your
shirt. Almost all banks are planning to offer NOW
accounts “free” at some level. Minimum balance
requirements should enable you to retain your better
accounts and prevent a mass conversion to NOW
accounts, but at the risk of losing market share. But,
with no per item charges and only minimum balance
NOW accounts:
• Regular DDA will be chosen by low balance
• Will lead to conversion of high balance accounts.
• Will not reduce processing costs.
• Will incur most (80%) of interest cost (on the
common assumption that 80% of your accounts hold
(Turn to page 47, please)


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SAMPLE of direct mail and teller handout promotional material
that banks have been distributing to tell customers about coming
of NOW accounts.

How bankers are planning
for NOW accounts
banks have received a continuing flow
of assistance from their state banker associations and

the American Bankers Association to help them prepare
for the advent of NOW accounts January 1, 1981. Each
state in the wide area served by the N orthw estern
B ank er has conducted seminars, generally with help
from the ABA by way of materials and/or speakers. The
ABA provided in-depth research, materials and seminar
formats very early in the year just for use by state
Some state associations, like North Dakota,
Nebraska, Iowa and others, have furnished statewide
television commercials as part of the association
program, and also have furnished radio spots and
newspaper ads for banks to use at the local level by
including their own bank logos.
The state association/ABA seminars frequently had
well-known area financial consultants or university
business professors providing research and marketing
suggestions to help banks in making the decision
whether to offer NOWs and on what basis. Nebraska, for
example, had Dr. Carl C. Nielsen of Wichita State
University at a NOW seminar earlier this year and again
at the recent NBA marketing conference in Kearney.
Minnesota used the services of Robert F. Benzer,
well-known senior vice president and marketing expert
with Financial Shares Corporation of Chicago. Mr.
Federal Reserve Bank of St. Louis

Benzer returned to Minnesota a few weeks ago to outline
the marketing decisions needed for NOW accounts when
the MBA hosted its Junior Bank Officer Conference.
During that MBA meeting, several Minnesota bank
chief executives appeared on a special panel. In separate
interviews, they were asked by the N orthw estern
B anker what NOW plans they have for their banks and
offered these comments:
David R. Christenson, president, Citizens State
Bank, St. Louis Park: We are anticipating at this time
requiring a minimum balance of $900. If the balance
should fall below th a t, the charge will be $5.00 per month
plus 15 cents an item. In connection with this, we are
also considering raising the minimum balance on regular
checking account to $300. Also, we have a tie-in feature
with regular passbook savings which provides, if the
customer maintains a balance of $2,500 in a separate
passbook savings account, that there will be no charges
on either the regular checking or the NOW account.
We’ve also given some thought to the concept of not
paying any interest on a NOW account balance below
$300. However, this has not been decided finally and I
think our decision will be based primarily on the
competitive concerns relating to that, although we do
feel it’s the right thing to do.
We don’t anticipate that NOW accounts will create
any specific marketing advantage for the Citizens State
Bank, as virtually all financial institutions will be
offering them beginning at the same time. We do
anticipate that by offering these accounts it provides us
with the opportunity to reprice existing services;
therefore, we don’t anticipate, because of our pricing
strategies, any substantial increase in the numbers of
accounts moving to this bank from other institutions.
We are anticipating a volume of NOW accounts of
between $4 and $5 million by year-end 1981 and we
expect this to come from existing passbook savings
accounts and existing demand deposit accounts.
Rodger Bense, president, State Bank of Long Lake:
After much discussion about the cost of NOW accounts,
no firm commitment has been made concerning pricing.
It is anticipated that our requirements will find a
minimum balance of between $1,000 and $1,500 and/or
average balance of $l,750-$2,200 in order to service
charge free. Also, should the balance fall below those
noted, a service fee of $7.50 or $10.00 will be assessed.
Under this program there is expected to be no fee per
Our research indicates that about 1; %-13 % of our
present personal D.D.A. accounts would qualify for
NOW accounts under our anticipated program;
therefore, we have concerns about how many will
actually switch to the new program. Being located on the
edge of the Metropolitan Minneapolis-St. Paul area our
customers are continually bombarded with advertising
messages about NOWs, yet the requests we have had at
this time have not been overwhelming.
It is, however, inevitable that service charges on
regular checking accounts will be affected and increased.
It is apparent that with cost of funds increasing all
service charges will have to be structured accordingly
and reviewed at shorter intervals.
John P. Ingebrand, president, Kanabec State Bank:
(Turn to page 30, please)
N o rth w e s te rn B an ker, D e c e m b e r, 1980


Flexibility and change in a freer environment
FTER operating for decades in
an environment of stable rates
and protected by competitive bar­
riers, during the decade of the ’70s
bankers were forced to adapt to major
changes. They were hardly prepared,
however, for what has happened dur­
ing the current year.
Starting in 1929, it took 45 years
for the prime rate to reach 9%. In
1980, in a short span of nine months,
the prime rate rose 500 basis points
from a historic high base of 15 %, then
fell back 900 basis points, and then
surged back up 500 basis points.
Incredible? Yes! Impossible? Not
at all! Welcome to the world of bank­
ing in the ’80s!
With this auspicious beginning
what can we expect to happen during
this decade? The answer to this ques­
tion first requires an assessment of
the environment in which we are
Current Environment
As we began this new decade, we
• Deeply imbedded inflation.
• An energy shortage.
• Heightened international ten­
sions and a faltering foreign policy.
• A sluggish economy and a re­
cessionary environment.
• Elimination of the statutory and
regulatory barriers that had long pro­
tected the banking industry from
• A changed deposit mix with a
consequent increase in the average
cost of funds.
• Commencement of the phase-out
of Regulation Q and rate ceilings—
the era of cheap money and of savers
subsidizing borrowers—is coming to
an end.

N o rth w e s te rn B an ker, D e c e m b e r,
Federal Reserve Bank of St. Louis


• Increased competition from non­
banking competitors including:
-Savings and loan associations
and thrifts with new powers to
offer transaction accounts, credit
cards and trust services and with
broadened lending power.
-Credit Unions.
-Retailers, such as Sears, offering
credit cards, insurance and small
demonination interest-bearing
-Investment bankers, such as
Merrill, Lynch with their money
market mutual funds, with $80
billion in assets; with their mort­
gage companies making and buy­
ing loans all over the United
States, and with the stated inten­
tion of ultimately offering a full
range of financial services.
-Commercial paper issuers issuing
over $100 billion of paper and pre­
empting one of the three basic
ways in which bankers historical­
ly have earned money—the pool­
ing or socialization of risk.
□ THE AUTHOR-Mr. Myers attended
Knox College, Galesburg, III., and
graduated with a B.A. in 1943. He
graduated from the College of Law, State
University of Iowa, J.D., in 1948. He has
served in many capacities including
responsibilities as president and chief
operating officer of United Bancorp of
In 1976, he was elected president and
chief executive officer of First Kansas
Financial, Inc. and in August, 1977, upon
its merger with Central National Bancshares, Inc., he became president, chief
executive officer, member of the board of
directors and chairman of the executive
committee of Central National Building
Corporation, as well as director of Central
National Bank and Trust Company of Des

Predicted Changes
During our current turbulent
decade, in order to meet these and
prospective environmental condi­
tions, we can anticipate fast paced
changes, including:
1. A strong movement to selfservice banking, particularly on the
retail side, including a proliferation of
automated teller machines, point of
sale systems, telephone bill paying
services, check truncation and gen­
erally banking in the home. Both con­
venience and costs, particularly per­
sonnel costs, will dictate this change.
While P.O.S. systems and telephone
bill paying services have not been
successful to date, action in these two
areas will pick up.
Automated teller machines may
dispense travelers’ checks and invest­
ment information, in addition to
cash. A corporate treasurer may sit at
his desk, and draw down his com­
pany’s line of credit or write it a letter
of credit.
The trend to more automation will
be but one of several trends which will
develop from the need of the industry
to achieve greater productivity if it is
to continue to discharge its role as a
financial intermediary.
2. Banks, particularly on the
wholesale side:
[A] Will assume a broker or inter­
mediary role. They will arrange
credit for a fee, and then serv­
ice the loans for insurance com­
panies, the $500 billion pension
fund industry and other insti­
tutional investors.
[B] Will provide financial advisory
services to customers:
-Competition with investment
banking firms already has


“Increases in non-interest income will be
necessity for continued profitability.”

key to survival and

commenced, with banks un­
derwriting general obligation
municipal bonds and placing
corporate term debt.
-The push for amendment of
Glass-Steagall has long since
[C] Will commence brokering com­
mercial paper for a fee.
All of these, and other similar serv­
ices, will be the means by which
banks increase their non-interest in­
come. Such increases in non-interest
income will be a key to survival and a
necessity for continued profitability.
Another change will be merely
continuation and acceleration of the
current trends of changes in the de­
posit mix and higher costs for money.
Old time demand deposits and tradi­
tional savings deposits will continue
to shrink. Money market and large
certificates of deposit will continue to
NOW accounts and other new pro­
ducts will emerge.

Bank or Crocker in California, bank be dead? Bear in mind that the
or Marine Midland, but Con­ loss of 50% of our banks in the 1920s
tinental cannot acquire control and 1930s was due more to the demise
of the Arizona bank.
of the communities that supported
[C] The Carter Administration al­ the banks than it was to poor banking
ready has proposals that would practices.
ease restrictions on cross bord­
I believe that community banks,
er banking.
which certainly know the territory in
Orin Kramer, assistant director of which they operate and the customers
the domestic policy staff of the execu­ who live there better than anyone
tive branch, with responsibility for else, will survive and prosper through
the role and structure of financial in­ the current turbulent period if they do
stitutions, has stated publicly that: five things:
1. Secure and retain good manage­
(1) the administration believes that
state boundaries are artifical limits ment, alert to the changes, innovat­
aon competition; (2) 15,000 banks are ive and with a forward looking and
too many, and (3) the long overdue flexible management philosophy.
2. Provide innovative marketing
report on the McFadden Act will
recommend liberalizing the Douglas and promote better public relations.
Amendment to allow regional bank More consumers than savings and
holding companies in contiguous loan associations urged the Federal
Home Loan Bank board to permit
Senator Proximire and John Hei- nationwide NOW accounts. The com­
mann, comptroller of the currency, monly stated reasons were that they
already are on record in favor of “were fed up with their commerical
removing “convenience and needs” banks,” that they were tired of “the
from the requirements to obtain a
new bank charter, although Senator
“I believe that
“Interstate banking Proxmire professes to oppose inter­
community banks
state banking.
will become a
Walter W. Wriston, Citicorp chair­
will live and
man, has stated publicly that con­
verting its 800 offices in 41 states to a
truly national bank “would be a
Interstate banking will becomematter of changing the signs over the rude treatment,” and that the grant­
a reality. The pressures will increase doors.”
ing of NOW account services would
until the artificial market barriers are
The probable evolution will be (I) be a means for “taking banks off their
modified. There are several reasons bank holding companies permission mountain top.”
why this will occur:
to acquire troubled banks, (II) bank
It will take innovative marketing
holding companies permission to —and then some—to change these
[A] The competition of non-bank­ acquire banks in contiguous states; basic attitudes and to retain retail
ing organizations will dictate (III) bank holding companies per­ customers, particularly in light of
it. They already have trans­ mission to cross state lines generally, savings and loan associations, like
action accounts, consumer and (IV) state wide branching.
the 2.1 billion asset Allstate, offering
loans, credit cards, commercial
There will be more concentration NOW accounts free and a bonus of
lending and some trust powers. in the banking industry. There will be free telephone bill paying service for
Retailers like Sears, finance a wave of banking mergers and con­ the remainder of this year, along with
companies like Dial, money solidations. The regulators will de­ 200 free NOW accounts checks. It is
market funds like Merrill mand fewer, larger, better capitalized refreshing to see that bank marketing
Lynch, and commercial paper and better managed banks.
personnel are beginning to experi­
issuers know no state bound­
ment with innovative concepts with
Community Banks
aries or office limitiations. Re­
the blessing of top management, in­
Many observers expect that we will cluding the payment of incentive
strictions on branching for
savings and loan associations, lose one-half of our community commissions and offering new pro­
thrifts and credit unions are al­ banks. On the other hand, Dr. Paul ducts.
most non-existent in many Nadler is of the opinion that the
3. Control non-interest expenses,
energy shortage and the less mobile particularly labor costs, and elimi­
[B] There is no political, regula­ existence of our people will result in nate non-profitable customers. Natory or practical justification our smaller American communities
why British banking concerns continuing to be alive. If that is BANKING IN1980s . . .
can acquire control of Union correct, then how can the community (Turn to page 47, please)
Federal Reserve Bank of St. Louis

N o rth w e s te rn B an ke r, D e c e m b e r, 1980


in 1975 with the original GNMA, fi­
nancial futures have grown rapidly and now include


belong in your
1981 planning?

Written especially for
The N orthwestern B anker by

Vice President
Bond Officer
Bond and Treasurery Department
Continental Bank
Chicago, 111.

N o rth w e s te rn B an ker, D e c e m b e r,
Federal Reserve Bank of St. Louis


30-day commercial paper, three-month T-Bills, one-year
T-Bills, four-year Treasury notes and 15-year Treasury
bonds. The trading of financial instruments on the
Chicago exchanges, which include the Chicago Board of
Trade, the International Monetary Market and the
Chicago Mercantile Exchange, emanated from the need
for greater protection against wide swings in interest
rates. Prior to the 1960s, interest rates showed little
volatility, as both short and long term rates were gen­
erally less than 6 %. However, as interest rate levels con­
tinued to climb as they did in the early 1970s, volatility
also increased.
The development of interest rate futures in 1975
served as a protective device for those who were closely
associated with movements in interest rates and finan­
cial markets. As with all commodity futures, financial
future contracts allow an investor to lock in a price today
which may or may not be achieved at a later date.
Price Movement
Banks, like all businesses, are subject to price move­
ment. The area which most significantly affects a bank
in terms of price is that of interest rates, which of course,
also have their price. Banks deal with a wide array of
interest rates in the form of loans, investments and
issued liabilities, all of which represent commodities
that together comprise the bank. The extent to which a
bank can eliminate the risk of adverse price movement
on its commodities will enhance performance of the
bank. If a bank wants to purchase a three-month Treas­
ury bill but wants to wait three months before buying it,
it can lock in a price today, buying a futures contract for
December delivery. If the cost of three-month T-Bills
rises in the next three months, then the banker will make
money on his futures position and earnings will rise for
the bank.
There are, of course, risks involved with the futures
market. Take the example of the purchase of a threemonth T-Bill contract for December delivery that I just
mentioned. If interest rates rise and prices go down, the
value of the futures contract also will fall. In other
words, the bank would incur a loss on its long bill
position for December. The bank, in this case, is not
hedging, but speculating that interest rates are going to
fall and prices rise. It has nothing to fall back on if prices
move adversely to the contract position. That is why
structuring a proper hedge is so important when using
the futures market.
Furthermore, sometimes it becomes difficult to hedge
a balance sheet item with an instrument in the financial
futures market. If a bank that is buying Federal Funds
attempts to hedge against the possibility of rising rates
or increased cost to the bank, selling short a T-Bill con­
tract may or may not improve his position. A bank
might be hedging apples with oranges if T-Bill prices
behave inversely to the Fed Funds rate. This could
happen if technical forces within the futures market
cause it to behave differently than the cash market, such
as a large buyer or seller or a shortage of a deliverable T-


Bill. This is referred to as the basis risk, which is the
difference between the cash and futures market caused
by independent factors within one market or the other.
Given that there are risks involved, bank authorities
are quite concerned about financial futures. Initially,
bank regulators were not all that favorable toward a
bank’s getting involved in the futures market, but only
because they thought the market might be abused for
speculative purposes as opposed to appropriate hedging.
Their attitude now, however, has become cautiously
supportive and they have made guidelines which allow
banks to get appropriately involved.
Written Policy
In his recent banking circular, the Comptroller of the
Currency established several guidelines. These guide­
lines state that:
• Banks must have a written policy for futures
activity that is passed by the board of direct-

option, the phasing out of Regulation Q, and the in­
ception of NOW accounts all have caused dramatic
increases in banking costs. The cost increases have often
been larger than their offsetting asset yields. Typically,
we have seen deposit costs and overhead expenses rise
by 25 % this past year while loan and investment income
has risen by only 20% among banks. Certainly, a great
deal of this is attributable to the roller coaster ride in
interest rates which we witnessed this past year.
The economy and the banking industry have never
before experienced a drop in the prime rate from 20 % to
11 % nor six-month T-Bills from 17% to 8% in a period
of only three months! This is why the futures market
becomes so important for banks. The futures market
was researched and created because of rising volatility in
interest rates. Since 1975, futures have provided the
means to combat gyrations in interest rates and, thus,
they enable a bank to smooth out earnings and protect
net interest margins which are under severe pressure.

It is not appropriate for all banks to get involved and I cannot
stress caution enough to any banker who is considering the
financial futures market. The futures market represents a great
deal of risk to bankers just as it has to farmers in their commodity
future activities.
ors. This policy should define who is author­
ized to partake in interest rate futures, and
how large a position the bank is allowed to
take in dollar terms. The purpose of futures is
to minimize risk through appropriate hedg­
ing. As such, hedging must be identified in
writing at the time a contract position is
• Also those banks must report to the Federal
Reserve on a monthly basis the status of a
futures position.
These guidelines will make the objectives more clearcut for banks in the future. There are not, however,
written guidelines for state chartered banks regarding
interest rate futures, although the general position of the
various state banking authorities at this time is very
similar to the Comptroller’s.
It is not appropriate tor all banks to get involved and I
cannot stress caution enough to any banker who is con­
sidering the financial futures market. The futures
market represents a great deal of risk to bankers just as
it has to farmers in their commodity future activities.
In terms of price movements, the sale of a crop is com­
parable to the banker’s spread or net interest margin.
Whether a profit is made in the year depends on the
bank’s ability to maintain a reasonable difference be­
tween cost and return. Just as the farmer has a futures
market for corn to work with, the banker has several
financial futures instruments to suit his needs.
The banker is facing inflationary pressure in rising
costs. The changes in bank regulations such as the intro­
duction of 6- and 30-month T-Certificates, the TTL note
Federal Reserve Bank of St. Louis

1981 Plans
Now that we are in the last quarter of the year,
bankers are reflecting on their income performance this
year and beginning to plan for 1981. As mentioned, 1980
will most certainly be considered one of the most volatile
periods with regard to interest rates. Because of this
v o latility, profitable a sse t/lia b ility management
becomes much more difficult. A bank can use financial
futures to minimize this volatility and protect its net
interest margins.
A widely used management tool in banking which is
designed to analyze the risk of being caught with high
cost deposits and low yield assets is a rate sensitivity, or
GAP analysis. This is a study which reviews the timing
of rate changes in liabilities and relates that timing to
rate changes in assets. Thus, the cost of a six-month
CD would change at the same time as a six-month fixed
rate loan note. In a given six-month period, say October
to April, a bank may have $10 million in assets that will
take on new rates as they mature or pay down within the
six-month period. This same bank may also have $5
million in liabilities that will take on new costs in the
October to April period.
These assets and liabilities are deemed rate sensitive
because in the next six months they take on new rates
which, of course, will fluctuate with the market. Now,
obviously, this rate sensitivity combination is very
biased or structured in terms of a rising interest rate
environment over the next six months. As interest rates
rise, the cost of the $5 million in liabilitites will rise as
they are renewed at higher rates via money market CDs.
On the other hand, this bank has $10 million in assets
N o rth w e s te rn B an ke r, D e c e m b e r, 1980

which are also taking on higher yields due to rising
interest rates.
Therefore, the positive GAP, or difference of $5
million that is applied at higher rates will improve the
bank’s net interest margin over the next six months.
However, if a bank’s rate sensitivity difference, or GAP,
were reversed, the opposite would hold true. In other
words, if there were a negative GAP of $5 million where­
by the bank had $5 million in rate sensitive assets and
$10 million in rate sensitive liabilities, the net interest
rate margin would shrink if rates increased.
Interest rate futures enter the picture as a hedge or
insurance against interest rate fluctuations that move in
opposition to a bank’s GAP. Since it can be very difficult
to sell long bonds and shorten-up asset maturities when
rates are rising, the proper hedge in futures will seem to
enhance income by selling short. Thus, the net interest
margin is preserved. This is especially true when a bank
has extended much of its liquidity into the bond market
and is faced with increasing costs because the market
has forced higher liability costs. You can’t really protect
or hedge against increasing overhead expenses but you
can hedge against rising interest costs.
A bank, for example, can execute a very good hedge
by relating rate increases in money market related liabil­
ities with Treasury bill futures. We did this with great
success last month as we witnessed the rate on the sixmonth T-Certificate rise from 8.5 % to over 10 %. Incom­
ing money market certificates were being put on the
books at increasing levels and represented a substantial
rise in the bank’s interest expense. Since, at the time,
one particular bank had a negative GAP of $10 million,
mostly in the form of money market CDs, we shorted the
December Treasury bill future market for 20 contracts.
Each contract represents one million so we sold $20
million of T-Bills. The reason 20 contracts were sold as
opposed to 10 was that we were dealing with the threemonth T-Bill future and we had hedged six-month
money market certificates. Therefore, we compensated
for this time difference by hedging with a ratio of 2-1
(two three-month T-Bill futures for every million of

“Interest rate futures enter
the picture as a hedge or
insurance against interest
rate fluctuations that
move in opposition to
a bank’s GAP.”
So, while the bank incurred increased cost on the $10
million in money market CDs which were written at
rising costs, it also realized a gain on its futures position
of over $150,000. Since we had sold the futures for 20
contracts and rates increased, we reversed our position
and bought back the 20 contracts at a cheaper cost to
realize the profit. It must be remembered, however, that
this gain in the futures market is not really all profit

N o rth w e s te rn B an ke r, D e c e m b e r,
Federal Reserve Bank of St. Louis


because the bank did realize increases in its cost of funds
on the CDs it was issuing. That is how the hedging con­
cept applied in this case where there was a negative GAP
and costs were rising.
Going Long
What if we consider the opposite case? By going long
in the futures market, how is the bank protecting itself?
We feel that banks should be using this market to hedge
and not to speculate. From a hedging standpoint, going
long in the futures market would help to protect yields
on net rate sensitive assets in a declining rate environ­
ment. Going back to our first example, if a bank had $10
million in rate sensitive assets while it had rate sensitive
liabilities of only $5 million, the bank would have a
positive rate sensitive exposure of $5 million. Thus, if
rates decline, the earnings on its rate sensitive assets
would decline faster than the costs of the liabilities. If
the bank went long in the futures market and rates fell,

“The most appropriate
application of the futures
market for a bank is
within the realm of
rate sensitivity.”
which means prices rose, the profit on the futures
position would offset the lost interest income on his rate
sensitive assets. Thus, the bank will have maintained
the original net interest margin.
Carrying this example further, if the banker was
wrong about the direction of interest rates and rates in­
creased instead, the bank would still maintain his
original net interest margin. The margin would be pro­
tected because the bank has more rate sensitive assets
than liabilities which would mean the interest income
would increase faster than the interest expense.
However, the loss taken on the futures position would
offset this increase and bring the bank back to the
original net interest margin. The danger in going long in
the futures market would be when a bank has more
interest rate sensitive liabilities than assets, or a
negative GAP, which is like a farmer buying corn
futures and doubling up. If rates decrease, then the bank
would earn a profit on the futures position as the deposit
expense falls faster than the interest income. But if rates
increase, the bank would experience losses on the futures
position while the bank’s deposit expense is increasing
faster than interest income causing a tremendous
squeeze on the net interest margin. Therefore, the bank
would lose money on both counts.
Generally, then, I am saying that the most appropri­
ate application of the futures market for a bank is within
the realm of rate sensitivity, but every bank and every
situation is different. If you try to apply futures to over­
all portfolio appreciation or depreciation, you wind up
with cash transactions in the futures being offset by
paper transactions in the portfolio. In other words, gains

“The concern in using the
futures market should
be to eliminate risk and
create performance
conducive with a bank’s
investment policy and
overall objectives.”
and losses in the futures market are realized daily
according to the futures position, whereas a portfolio
does not realize a gain or loss until a sale is made.
The impact of a futures position on a bank’s earnings
is crucial to understand. That is why it is better to apply
the futures market in a rate sensitivity format where
hedged items are most identifiable and corresponding
futures contracts can be bought or sold. There is a con­
siderable amount of speculation that occurs in the
futures market but a bank’s balance sheet also is inher­
ently speculative especially in light of rate sensitivity.
The concern of the bank in using the futures market
should be to eliminate risk and create performance that
is conducive with a bank’s investment policy and overall
There may be additional obstacles for a bank in deal­
ing with interest rate futures and these should be con­
sidered also. The major problems banks have with the
futures market can be put into two categories, theoret­
ical and technical. When I say theoretical problems, I
am talking about the problem of determining which
financial futures contracts to use when hedging some of
the bank’s assets. As I discussed earlier, hedging the
bank’s six-month money market certificates with the 90day T-Bill futures contract is appropriate. This is some­
what obvious since the rate on the six-month money
market certificate is set in the weekly Treasury bill
auctions and we are hedging this cost with T-Bill con­
tracts. But when we are trying to hedge term loans or
longer term investment assets, there can be considerable
disagreement over which futures contracts should be
used and how many contracts should be used to form an
effective hedge.
From a technical standpoint, the daily market proce­
dure, which banks have to follow, can be difficult. Every
trading day all open futures contracts are revalued to the
closing market price by the broker. Any loss which
results from this revaluation is collected by charging the
bank’s margin account. If the loss causes the bank’s
margin account to fall below a predetermined level,
called the maintenance margin level, the bank would
have to deposit additional funds with the broker to bring
the margin account back up to its initial level. If the
bank experiences a gain, it may withdraw these funds to
invest elsewhere.
The inclusion of futures on financial statements is also
of fundamental concern for banks. There have been
Federal Reserve Bank of St. Louis

numerous questions raised as to the appropriate
accounting and internal control procedures to be
followed by banks engaging in futures market activity.
To date, there have been no official rulings by the
Financial Accounting Standards Board as to the appro­
priate accounting treatment for financial futures con­
tracts, although an opinion is expected soon. Until this
subject is addressed in the accounting literature, various
practices can be expected to be in use.
From an accounting viewpoint, several aspects of
future trading need to be considered. These include re­
cording the actual futures contract, the daily revaluation
of outstanding contracts and its impact on the margin
account, and the recognition of any profit or loss. The
first accounting consideration is that the contracts do
not represent a sale or a purchase of an asset. The futures
contract represents a commitment to buy or sell an asset
in the future, if the contracts are allowed to mature.
Therefore, when recording these contracts the balance
sheet is not affected by the futures transactions. A non­
balance sheet commitment account should be estab­
lished to reflect the futures position, and a footnote to
reflect contingent liability on a balance sheet would be
For each futures contract, whether it is a buy or sell,
there is an initial deposit requirement that must be
placed with the broker. These funds, or margins, are
placed with the broker as a type of performance bond or
collateral and represent an asset to the bank. A margin
account should be established in the other asset category
of the balance sheet to record the margin deposit. This
margin account should be adjusted at the end of each

“From an accounting
viewpoint, several aspects
of future trading need to
be considered.”
trading day to reflect upon market movement. This re­
valuation of the futures’ position is important because it
forces bank management to watch the position closely to
make sure the hedge is being accomplished and it pro­
vides the necessary check on the broker’s calculations.
In addition, if the contracts are allowed to mature, pay­
ment is made for the securities at the closing market
price on the last day of trading.
There are several points in time when the profit or loss
resulting from the futures transaction can be recognized.
The recognition of income depends upon the type of
security that is being hedged. If the futures contracts
are used to hedge trading account securities, profits or
losses should be recognized with the daily revaluations
of the future contracts. If the futures contracts are used
to hedge portfolio securities or liability costs, the gain or
loss should be computed daily and placed in a deferred
income account and classified as an “other liability.’’ At
maturity or closing out of the contracts, the gain or loss
would then be taken into the income statement. This
provides a good matching of the profits and losses in the
cash and futures markets and makes the general ledger
accounting treatment consistent with the tax treat­
N o rth w e s te rn B an ke r, D e c e m b e r, 1980


. . . have built the Travelers Cheque industry
A N orthw estern B anker interview with
Senior Vice President
American Express Company
Travelers Cheque Division
New York, N.Y.

WO characteristics which are essential in the
travelers cheque business are Quality and
Integrity.” These basic keys for success in dealing with
millions of customers around the globe were identified
by Michael Lively, president of the Travelers Cheque
Division of American Express Company, during an
exclusive interview recently in New York City with the

N orthw estern B a n k e r .

Echoing these observations in a separate interview
was Edward J. O’Hare, senior vice president for
marketing and sales in the Travelers Cheque Division,
who stated, “Ours is a repeat business, so if people are
satisfied, they will keep coming back. This requires a
continued commitment to excellence on the part of all
our employes and this company. In our 90 years of
experience we have dedicated our efforts to a basic
pattern of behavior showing to the public that they can
trust us, which is our reliability.
“As business firms expanded, business owners no
longer ran the cash register so unskilled people were then
handling it, taking cash and cashing people’s checks.
We assured those business owners they would be
protected fully when they accepted American Express
Travelers Cheques, which has built our reputation for
Competition in the travelers cheque industry has
sharpened intensely in recent years. Domestically, the
other principal firms offering this instrument are
Citicorp Travelers Cheque Division, Bank of America,

N o rth w e s te rn B an ke r, D e c e m b e r,
Federal Reserve Bank of St. Louis


Republic National Bank of Dallas to a much lesser
degree and, within the past year, the Visa Travelers
Check offered by 10 leading banks such as First National
Bank of Chicago and Chase Manhattan Bank in New
York. Internationally, the two most widely known
travelers cheques probably are those offered by
Barclay’s Bank of London and Thomas Cook, also of
90 Years of Acceptance
Since his company is the founder of the Travelers
Cheque industry, Mr. Lively is keenly aware of the need
for continued quality and integrity of the product.
American Express, he points out, has stood by its policy
for 90 years to reimburse retailers or banks even if checks
have been stolen and then forged. “This is what has
given us our acceptance,” he says pointedly, “for the
banks and their customers know they can rely on us. If
any of the other issuers don’t pay some refunds as we
do—and we pay, even if we know they’re counterfeit
documents—if they decide they can’t afford to pay
them, this could give the industry a black eye. Legally,
they’re right, but if they don’t pay, then retailers say
they won’t cash any travelers cheques.”
Mr. Lively said in an earlier press conference with
bank publication editors, in response to a question about
annual volume, “We estimate we sell more than 50% of
all travelers cheques world-wide.” A similar projection
issued a year earlier by Fortune magazine estimated the
American Express share of the competitive market at
anywhere from 50% to 65%.
“Wethink the travelers cheque business will continue
to grow,” Mr. Lively observed in the interview. “We’ve
spent 95% of all the dollars expended by the industry
and the new entrants’ advertising should help. Actually,
our biggest competitor is not a competitor in the
traditional sense, but cash! The more people get away
from vulnerable cash on trips, the more the travelers
cheque industry will grow.” Mr. Lively’s company has
spent $120 million in the past 10 years alone in
advertising, marketing research and sales.
Mr. Lively, when asked to identify the principal uses
of the cheques, said, “Most of our sales are vacation

with their methods of marketing to customers. We can
do this via ATMs, if they want it. At this point, we’re
ahead of banks (ATMs as convenience center in airports
to issue Travelers Cheques).”

Karl Malden is American Express Travelers cheque spokesman.

oriented and these people use Travelers Cheques.
Business trips are more card oriented. People use
Travelers Cheques as a budgeting device so they aren’t
overspending. This is especially true in a time of
recession. But when they use their card they can
When asked to analyze why American Express
continues its market dominance, he said, “We base our
leadership on quality, refund service, and total service to
the issuing institutions.”
More Growth Seen
During the interview, Mr. O’Hare was asked to
identify the size of his company’s sales outlets to serve
the millions of buyers. “Our total sales outlets of
89,000,” he stated, “include 50,000 banks and branches.
Is the saturation point reached for sales? I would say
‘No’ because of two things.
“First, travel is a growth business. As the population
ages and the educational level expands, our statistics
show continued growth. There is quite a bit of untapped
potential in cash users. If we continue reminding people
they need Travelers Cheques, this will lead to greater
usage. This, in turn, will lead to our continued search for

“We estimate we
will sell more
than 50% of all
Travelers Cheques
— Michael Lively

“Second, Travelers Cheques exist because of basic
human nature needs. They give peace of mind,
relaxation on a trip, a discreet source of funds, control
over one’s finances, they’re asset-based and one doesn’t
come home to debt!”
Continuing in his comments about expanded service
to the market, Mr. O’Hare commented, “The bulk of our
volume will continue to go through financial institutions
and our job is to continue giving them service consistent
Federal Reserve Bank of St. Louis

Television Spokesman
The spokesman for American Express Travelers
Cheques in recent years has been movie and television
star Karl Malden. When American Express first
approached his Hollywood agent the proposal was
rejected because it was stated Mr. Malden did not
endorse products. Ed O’Hare decided to take a more
direct approach and flew to Los Angeles and arranged a
dinner meeting with Mr. Malden. When the proposal for
doing American Express commercials was placed
directly before him, Mr. Malden said, “Yes, and I ’ll tell
you why. When I was in London a few years back we
were all paid cash on a daily basis after shooting was
completed. I had a large amount of cash in my hotel
room and it was all stolen. I decided then that the rest
would be placed in Travelers Cheques.” At that point,
Mr. O’Hare relates, Mr. Malden reached in his pocket at
the dinner table, pulled out a folder of American Express

“Travelers Cheques
exist because of
basic human
nature needs.”
— Edward J. O’Hare

Travelers Cheques and said with a smile, “I never leave
home without them!”
That became the slogan of the famous TV
commercials and print advertising seen by millions the
past few years, in advertising prepared for Mr. O’Hare’s
division by Ogilvy & Mather, Inc., a major New York
City advertising agency.
Service Support
That visible advertising to the public, promising the
safety, peace of mind, and ease of check cashing spoken
of by Mr. O’Hare, is supported behind the scenes by a
dynamic range of services and staff.
For the general public the key service, in addition to
the Travelers Cheque itself, states Mr. Lively, is
American Express’ Refund 365, which makes it possible
for a customer to get a refund any day of the year on lost
or stolen checks at 60,000 refund locations world-wide.
This well publicized refund service enables a customer to
call a local American Express office, or a central office by
use of a toll-free 800 number, give the company operator
the required information, and then be directed to the
nearest refund center in the city where the call is being
placed. If it should be after hours for that local office,
American Express will direct the customer to the nearest
Holiday Inn, where a $100 advance will be made until the
local refund center is open the next day. If the caller is
abroad, the servicing agent for the $100 advance is Avis
Mr. O’Hare says one of the new services developed for
banks and other sellers is Express Pac, introduced in
N o rth w e s te rn B en ke r. D e c e m b e r, 1980

1976 after two years of test marketing. Benefits to
banks, he said, include a 50% reduction in teller
transaction time, virtual elimination of common clerical
errors, better inventory and audit control of Travelers
Cheque stock and quicker service for customers.
Express Pac consists of pre-packaged, color-coded
packs of Travelers Cheques in multiples of $50 to $1,000.
Other American Express innovations include issuance
of Travelers Cheques in six other currencies—German
marks, Swiss francs, French francs, Pounds sterling,
Japanese yen and Canadian dollars. The company offers
collateral services both to banks and their customers.
How Cheque Got Started
Mr. Lively said American Express is looking ahead to
1981 when the company will celebrate the 90th birthday
of the Travelers Cheque. Its history originated in 1890
when the company’s third president, James C. Fargo,
returned from an overseas trip in a testy mood over the
problems connected with accessing cash in foreign banks
through a letter of credit. He asked an untitled, reliable
clerk named Marcellus Fleming Berry to come up with a
more viable solution to the problem. Some months later,
Mr. Berry hit on the now widely-accepted dual signature
check and it was offered first in 1891.
The American Express Travelers Cheques wasn’t an
instant success, but did continue to grow in the next two
decades because merchants became aware that the
company would stand behind all the checks. The
American Express Travelers Cheque got its greatest
boost in World War I when 150,000 Americans were
stranded abroad because their checks and letters of
credit were not being honored in the fever of the war
catastrophe. However, the company had large amounts
of money and gold in European banks and all those with
Travelers Cheques got their money and steamship
tickets promptly. American Express went further by
joining American money-market banks in sending a
large amount of gold to European banks to back up the
stranded Americans’ need for credit.
When the European banks heard the gold was on the
high seas aboard the battleship Tennessee, they began
to honor the letters of credit and checks held by
American travelers. This led to American Express being
accepted as one of the most trusted names among

Current Developments
This continued search for service to customers is now
evident in the company’s current project involving the
move of its entire computer operations in the next two
years to Salt Lake City. This expanded, sophisticated
center will maintain every conceivable record of all
Travelers Cheques, including inventory on hand for each
issuing bank. A by-product of this will be automatic
ordering of new Travelers Cheque supplies for each
issuing bank without the bank having to go through the
paperwork previously done.
Mr. Lively backed up his comments with some
interesting figures to show the dimensions of this
world-wide service. American Express has 2,000
employes in its Travelers Cheque division, about 1,500
of them in New York where the operations and refund
centers presently are located. The 1981 operating budget
is $200 million. Most of the Travelers Cheques are
printed in the United Kingdom and shipped to the

N o rth w e s te rn B an ke r, D e c e m b e r,
Federal Reserve Bank of St. Louis


United States in sealed, security guarded containers. In
this current year of 1980 the company will process about
500 million checks. About 3 million checks are lost or
stolen each year and 178,000 refunds have been made to
date this year.
World-wide gangs of thieves—both of travelers
wallets and Travelers Cheques and of wholesale theft of
blank cheques—are pursued by a sophisticated security
force headed by a former FBI agent, James McGrath, a
native of Davenport, la.
Based on the experience of American Express, Mr.
Lively forecasts, the entire industry will continue to
grow as more people turn to reliable checks that will be
accepted anywhere in the world and honored by the
issuing companies.
(Continued from page 21)

We will, when legally permitted to do so, offer NOW
accounts to our customers. At this particular time we
intend to use an average balance concept with charges if
the account falls below a specified amount, structured
similar to those currently being offered on our regular
checking accounts. Total demand accounts in our bank
average 15% to 16% of total deposits. As a
consequence, we do not feel we will be severely impacted
by NOW accounts as we are already paying interest on a
major portion of our deposits.
G. M. Mike Pieschel, president, Farmers &
Merchants State Bank, Springfield: We will offer a
NOW type account effective January 1, 1981. If a
customer maintains a minimum balance of $1,000 or
more, or maintains an average balance of $1,600, there
will be no charge levied on the NOW account. The
customer may write as many checks as he or she desires.
If the monthly minimum balance drops below $1,000 and
the monthly average balance is below $1,600, there will
be a service charge of $5 levied. As I stated, there will be
no per item charge over and above the $5. We do not
expect to attract any significant amount of new money
with these accounts except to the extent that banks in
our neighboring towns do not offer this type of account.
We think that most of our current savings accounts will
become NOW accounts. We think that of our
approximate five million dollars in regular savings
deposits, we will see approximately 50% transferred to
the NOW account.
We will be changing our service charges. Presently,
we have a 50 cent per month maintenance charge with a
charge of 5 cents per item and a credit of 10 cents per
hundred dollars. We plan to use the 4-3-2 method; that
is, a $4 charge for montly balances falling below $200, $3
for minimum balances between $200 and $300, and $2 for
minimum balances between $300 and $400. There will be
no charge on accounts maintaining a minimum balance
of $400 or more, and there will be no limitation on the
number of checks that can be written with the foregoing
We will eliminate dime-a-time accounts and will offer
“student” accounts for children and students having a
charge of 20 cents per check written.
We plan to initiate a 50 cents per month maintenance
charge on all regular savings accounts having a balance
of $100 or less. This charge will not apply to children or


Agriculture Eases Recession

HE ninth semi-annual survey of
more than 700 Midwest bankers,
c o n d u c te d by

> N ational Bank
of Minneapolis,
indicates grow­
ing optimism and
im proving eco­
nomic conditions
throughout the
will lead the re­
gion out of recession,’’ said Dr. Sung
Won Son, senior vice president and
chief economist at Northwestern,
whose staff conducted the survey.
“Strong farm conditions will help
agriculture-related businesses pros­
per, with the recovery spreading to
the whole farm community and,
ultimately, the entire region. Crops in
large parts of the region are
considerably better than the national
^ av erage,” he said ‘‘and when
combined with much improved
prices, farm income has rebounded
sharply from depressed levels this
past spring.”
McGillicuddy Appointed
Banking Industry Chairman
John F. McGillicuddy, chairman
and president, Manufacturers Han­
over Trust Co.,
has been appoin­
ted banking in­
dustry chairman
for the 1981 U.S.
savings bonds
cam paign. The
was made by G.
William Miller,
Secretary of the j. F. McGil l ic u d d y
Mr. McGillicuddy, who succeeds
W alter B. W riston, chairm an,
Citicorp, will stimulate the sale of
bonds by encouraging more employ­
ers in the banking industry to head up
campaigns for increased participa­
tion in payroll savings plans.
The industrial payroll savings
committee spearheads the sale of
savings bonds through promoting
the payroll savings plan in compa­
nies. The committee, active since
1963, is composed of the chief
executive officers of approximately
60 top corporations in the country.
Mr. McGillicuddy met with
Federal Reserve Bank of St. Louis

The Iron Range region of
Minnesota has been hard hit by the
national economic downturn because
of its heavy dependence on steel
demand. Economic activity in this
area remains depressed although
some improvement has occurred
since April. Although additional
improvement is anticipated in 1981,
the Iron Range economy is expected
to be weak well into the first half of
next year.
According to the survey, liquidity
is significantly higher at agricultural
banks as evidenced by a sharp drop in
the average loan-to-deposit ratio,
falling to its lowest level in three
years. The increased liquidity is a
result of sharply reduced farm
machinery purchases earlier this
year; increased marketing of grains;
bonus payments from oil and gas
leases; and reductions in beef cattle
herds which have tem porarily
increased deposits and reduced loans.
Loan demand at agricultural banks
is expected to be stronger in 1981.
The greatest increase is anticipated in
crop operating loans followed by farm
machinery and equipment loans.
Secretary Miller and the committee in
Washington recently for their annual
Silver Trophy for
Heller Report
Walter E. Heller International
Corporation has received Financial
World’s 1980 silver trophy award for
the best annual report of all the
nation’s financial institutions, in­
cluding all banks.
The annual report is edited and
published by Harvey Lederman,
Heller vice president, in the Chicago
Financial World’s panel of judges
(43 Wall Street analysts) narrows the
thousands of entries it receives down
to 1,500 merit award winners. From
this group, 79 industry awards are
given. Then 11 silver trophy winners
are picked, representing broad
industry groups. Financial World
Magazine is based in New York City.
The judges based about half their
decision on the presentation of
material relevant to shareholders.
The other two main concerns, each
weighed about equally, are the
presentation of detail useful to

financial analysts and the overall
graphic presentation.
Of special interest in Heller’s
annual was the announcement of
Heller’s long-term committment to
small business through the creation
of its Institute for the Advancement
of Small Business Enterprises.
Another unusual feature of the
Heller annual were 22 case studies on
Heller clients in a magazine format.
The stories were grouped by major
classes of business which represent
im portant m arkets for H eller’s
Final Regulations for
In final regulations concerning
premiums, the Depository Institu­
tions Deregulation Committee:
1. Increased the ceiling on the
premium values to $10 for deposits of
less than $5,000 and $20 for deposits
of $5,000 or more. The limitations
include the costs of shipping,
packaging and handling.
2. Prohibited averaging the prices
of various premiums.
3. Required certification by an
exec officer that the costs do not
exceed the ceilings, with a fine of
$10,000 or imprisonment of up to five
years or better for falsification.
4. Limited the number of premi­
ums to two per account in any
12-month period.
5. Defined finders fees as a
payment of interest to the depositors.
6. Authorized payment of bonuses
in cash or merchandise to employes
for participating in an account drive,
contest or other incentive plan,
provided such bonuses are tied to the
total amount of deposits solicited and
are not tied to specific, individual
7. Abolished prepayment of inter­
est in the form of merchandise, cash
or credit to a deposit account.
Deluxe Check Sales Up
Deluxe Check P rin ters, Inc.
reports that sales for the first nine
months of 1980 totaled $310,567,679,
up 16.2% from $267,382,531 a year
ago. Net earnings for the period were
$31,395,066 or $2.75 per share, up
14.3% from last year’s $27,473,772,
or $2.40 per share.
Sales for the third quarter were
$108,236,574, up 14.4% from
$94,622,318 last year, while net
earnings were $12,208,454 or $1.07
per share, up 15.3%.
N o rth w e s te rn B an ker, D e c e m b e r, 1980

TH E N O R TH W E STER N VIE W » N u m be r Four

Maybe you’re feeling the pressures
of modernization.
Maybe you know that it’s your
customers' first step toward Electronic
Funds Transfer (EFT).
Perhaps you realize that as your
business grows, adding an Automated
Teller Machine (ATM) today will be less
expensive than adding space and
personnel tomorrow.
Or perhaps you’ve seen the figures
showing the direct correlation between
the number of services a customer uses
and his likelihood to remain at the
same bank.
For whatever reason, you’ve
decided to add a debit card system to
your bank. And you may have just
opened a can of worms.
Because without the proper
expertise, many banks find out that the
decision is easier to make than
to implement.

The high cost of cash
At first glance, costs of adding an
ATM can be staggering. And banks
wonder if the benefits will offset
the expense.
That really depends on the program
itself. If you plan to issue your own debit
card, the total expense can indeed
be significant.
Because, aside from the expense of
the machine and its installation, there is
the cost of time. Your time and others’.
Time to select the hardware and
software, the machine’s location, the
installation contractor. There are
supervisory duties, paperwork, and a lot
of other hidden, costly expenses.
There are continual costs such as
operator training. Routine and special
maintenance. Even marketing
and promotion.
And of course, the opportunity
costs. With a “home-grown” card, your
customers are limited to your bank’s ATM
locations. Not much of a convenience
for a service that's meant to provide just
that. And not very appealing for a mobile,
speed-oriented society.
In short, the bank that decides to
take its own problems in hand may soon
find itself in over its head.

Our system is your
The Instant Cash network can offer
you a solution to some of the expense.
And all of the problems. Because Instant
Cash is far more than just a piece
of plastic.
We handle it all, working with you to
find the hardware and software that best
meet your needs. Helping you with site
location. Taking care of installation.
Once your ATM is ready to run, we’ll
provide a comprehensive training
program for operators, now and later.
We’ll contract for all maintenance, and
bill you.
And If a problem develops, you’ll
know that someone else js worrying
about it.

W e’ll help you sell
customers, too.
We know that, although the Instant
Cash colors are widely recognized all
throughout the Upper Midwest, an ATM
doesn’t sell itself.
So we’ll provide you with an
advertising/marketing kit that includes
everything from lobby posters to radio
commercials. We’ll help you coordinate
a Grand Opening demonstration if you
want. And we’ll send you our Instant
Cash newsletter to keep you up-to-date
on new events that affect
electronic banking.
Well help you make your Instant
Cash system a cost-efficient system. All
across the board.

comprehensive a list of before- and
after-the-sale services—from equipment
selection to marketing.
Plus, the Instant Cash system is a
“no strings attached” system. Because
it’s not necessary for you to do your data
processing with us. If you choose, your
ATM can be on-line to our central
computer file which will provide
authorization of valid cards and capture
entries. And well process your entries
through the Automated Clearing House
or directly to your account if we handle
your data processing.

There’s strength in
our numbers
Instant Cash is one of the largest
systems in the country. With an
experienced staff to help you prepare for
the future, and a concerned
correspondent banking staff to help
solve problems today.
To over 100 banks, Instant Cash is a
proven system. The 200,000 Instant
Cash cards we've issued to date attests
to that.
To customers, Instant Cash is a
convenient system. With 140 ATMs
across the Upper Midwest, your
customers will have access to all these
participating banks’ machines.
When it’s time for you to add a debit
card, it’s time to ask the experts. Ask
us—your Northwestern Correspondent
Bankers. We’re on your side.

W h y Instant Cash?
Yes, there are other debit card
networks around. But none with as


Correspondent Banking

National Ban k


Of Minneapolis
Federal Reserve Bank of St. Louis

T û l û n h n n û / ß 1 0 \ Q 7 O .Q O O n



Mr. Eitreim joined Northwestern
Bank in the summer of 1979 following
graduation from South Dakota State
University with a BS degree in
agriculture. His responsibility in­
cludes originating, processing and
monitoring agricultural loans.

Elected at Golden Valley
The board of directors of Golden
Valley Bank has announced the
election of Wil­
liam J. Bohnhoff
as p re s id e n t,
chief executive
officer and a
Mr. Bohnhoff
began his bank­
ing career in 1961
as a trainee at the
First Bank of
N orth Dakota- W.J. BOHNHOFF
Grand Forks, where he was
subsequently elected loan officer. In
1964 he joined First Bank System,
Minneapolis, as a credit analyst, later
being named senior credit analyst.
In 1966 he was elected assistant
vice president of First Bank-Southside Missoula, Missoula, Mont. In
1968 he joined First Hennepin State
Bank, Minneapolis, where he was
elected assistant vice president, and
in 1970 was elected vice president.
In 1972 Mr. Bohnhoff was elected
vice president and senior credit
officer at First Bank Southdale,
Edina. From 1976 to the present, he
served as president, chief executive
officer and director of First Bank
Merchants, St. Paul.
Mr. Bohnhoff holds a bachelor’s
degree from Colgate University,
Hamilton, NY. He is also a graduate
of the ABA National Commercial
Lending School at the University of
Oklahoma, and of the Graduate
School of Banking at the University
of Wisconsin.
Elected at Mankato
Starr J. Kirklin, president of the
First National Bank of Mankato, has
announced the election of John M.
Gillis as sales finance officer. Mr.
Gillis began his banking career at
First Bank Hibbing as a management
trainee in 1977. In 1978 he became a
personal banking officer. Prior to
joining the First Bank Hibbing, he
Federal Reserve Bank of St. Louis

was with Commercial Credit Corpora­
tion, Hibbing.
Mr. Gillis is a graduate of North
Dakota State University, Fargo, and
holds a BS degree in business
Northwestern Promotions
Robert D. Phillips, president of
Northwestern National Bank of
Fergus Falls, recently announced the
election by the board of Beverly
Hoxie to assistant vice president, real
estate loans; Richard E. Drevlow to
assistant vice president, agricultural
loans, and David E. Alberts to
personal loan officer.
Ms. Hoxie has served in various
capacities at Northwestern Bank
including control officer and real
estate officer.
Mr. Drevlow is a graduate of North
Dakota State University with a
major in agricultural economics.
Prior to his employment at North­
western Bank, he spent a year at
Northwestern National Bank of
Valley City under the bank
management training program. He
joined Northwestern Bank in 1976
and was elected agricultural loan
officer in 1977.
Mr. Alberts graduated from South
West State University with a major
in social science. He joined North­
western Bank in 1979 under the bank
management training program.
Promoted at Luverne
Karen Smidt has been promoted to
marketing officer and Jeff Eitreim
has been promoted to agricultural
loan officer of the Northwestern Bank
of Luverne, according to Jerry
Wethor, president.
Ms. Smidt joined Northwestern
Bank in September of 1974. Prior to
that, she had banking experience at
the State Bank of Edgerton and the
Hawaii National Bank in Honolulu.
She will have complete responsibility
for bank marketing in addition to her
instalment loan duties.

Named at Aitkin Bank
Security State Bank of Aitkin has
announced the employment of Roger
Houg, assistant
M r. H oug
graduated from
Pipestone AVTI
in the agricultur­
al banking pro­
gram. He was
e m p lo y e d a t
F irs t
S ta te
B a n k , S io u x
Rapids, Iowa, as
assistant cashier, working in bank
operations and ag loans for four

Everett Henrickson Resigns
Everett C. Henrickson, executive
vice president of the Citizens State
Bank of Brainerd, has announced his
resignation, effective December 1,
1980, according to Marvin R.
Campbell, president.
Mr. Henrickson has accepted a
position as president of the Farmer’s
Bank of Malone, Florida.
Mr. Henrickson has been with
Citizens State Bank since February
of 1974, when he accepted a position
as vice president and senior loan
officer. In 1975, he was appointed to
his present position of executive vice
Elected to Comptroller
Election of Philip D. Rolle to
comptroller of First National Bank of
Duluth by the bank’s board has been
announced by Dennis W. Dunne,
Mr. Rolle has served as assistant
vice president for First National since
He joined First National in July,
1977, serving in various departments
before being named manager of
planning in January, 1979. He is a
1977 graduate of the University of
Minnesota, Duluth, with a bachelor’s
degree in finance.
N o rth w e s te rn B an ker, D e c e m b e r, 1980


Midland National Bank of Minnea­
polis has announced the promotion of
William J. Mandel to assistant
vice president.
Mr. Mandel
joined Midland’s
consumer bank­
ing services de­
partment in Sep­
tember, 1980. He
is a native of St.
Paul and re ­
ceived his BA
degree from the College of St.
Thomas, St. Paul, Minn.
Mr. Mandel began his career in
1960 at Commercial Credit in St.
Paul. He was employed at the First
National Bank of St. Paul from 1963
to 1975 in the consumer banking
services area handling instalment
loans and consumer savings, serving
as vice president. He joined the
Cosmopolitan Bank in Stillwater in
1975. In 1977 he joined the Sussel
Company, St. Paul, and served as
division sales manager.
* * *

Karen Sjoberg has joined as trust
officer in the trust estates and
guardianships division.
Ms. Sjoberg formerly was an
associate attorney with the Arnold
and McDowell Law Firm, and worked
as an agent in charge of the
Minnesota Bar Association account
for lawyers malpractice insurance
while employed by M arsh &
McLennan Inc., Minneapolis.



She received a bachelor’s degree in
psychology from Macalaster College
in St. Paul and a doctor of
jurisprudence degree from William
Mitchell College of Law in St. Paul.
Jeanne K. Stretch has joined as a
trust officer in the trust & estate
development division.
Ms. Stretch formerly was a trust
business development officer at
Industrial National Bank in Provi­
dence, R.I. She also was a professor
of criminal justice at Salve and
Regina College in Newport, R.I., and
spent two years in private law
practice in Jamestown, R.I.
Ms. Stretch received a doctor of
jurisprudence degree from the
University of California Hastings
College of Law in San Francisco.
* * *

F irst Bank M inneapolis has
announced the addition of three
individuals to the
F. Blake Shel­
ton has joined as
officer in the ex­
ecutive and pro­
fessional b ank­
ing department.
For the past
eight years Mr.
Shelton has manF.B. SHELTON
aged several of the Home Savings
A ssociation M inneapolis branch
Marvin L. Ellison, president of the
offices. He also worked as a computer
State Bank, St. Paul,
programmer for Burroughs Corpora­
the election of Robert
J. Sullivan to the bank’s board of
Mr. Shelton received a bachelor’s directors.
Mr. Sullivan is the newly
degree in psychology from Gustavus
Adolphus College in St. Peter, Minn. appointed general manager of the St.

N o rth w e s te rn B an ker, D e c e m b e r,
Federal Reserve Bank of St. Louis


Paul plant of the Olympia Brewing
Mr. Sullivan began his career with
the Hamm Brewing Co. in 1949 as
mailroom clerk and messenger and
successively worked in a variety of
positions in inventory control,
production, sales and marketing.
Robert Sheild, who had been
marketing officer for the bank has
been named manager of the bank’s
Woodbury office. Mr. Sheild worked
for the Hamm and Olympia Brewing
companies before starting for the
bank in 1978. He has been assistant
manager of the Woodbury office since
its opening in October of 1979.
Jack V. Pedersen has been elected
a vice president and will continue his
present assignment as manager of the
commercial loan department. Mr.
Pedersen, a graduate of Gustavas
Adolphus College, received his
masters degree in business from St.
Thomas College. He began his
banking career in 1972 at Northwest­
ern National Bank of St. Paul and
came to Northwestern State Bank in
1977 as a commercial loan officer.
Warren Sandberg has been elected
a vice president and will assume
responsibilities as manager of the real
estate department. Mr. Sandberg
received his bachelor’s degree from
S.W. State University of Minnesota
and his master’s degrees from
Arizona State University and St.
Thomas College. He was with
Knutson Mortgage Co. before joining
the bank in 1978 as assistant vice
president of real estate.
John Rahm has been elected vice
president and cashier and will assume
responsibilities for operations and
financial planning. Mr. Rahm, who is
a graduate of St. Olaf College,
Northfield, Minn., began his banking
career in Illinois before joining
Northwestern National Bank of St.
Paul in 1974. He has been with
Northwestern State Bank since
February of 1979.


Midland Correspondent team. Not only can you
call them anytime you need some fast answers,
you can call them toll free THE NUMBER IS
1-800-752-4200 IN MINNESOTA* The names
are Stan Peterson, Mike Bodeen, Jackie Dunn
and Marge Lamosse. They represent the
strength and service of a substantial financial
institution. But, more importantly they represent
the team spirit it takes to give your bank the
best our bank has to offer
*In North Dakota and South Dakota, call 1-800-328-8678.
L to R : Stan Peterson, Mike Bodeen, Jackie Dunn, Marge Lamosse

Midland National
401 Second Ave. S . / Street Level, Gov t Center/MemberED.I.C.
Federal Reserve Bank of St. Louis

N o rth w e s te rn B an ke r, D e c e m b e r, 1980


Wishing you all a very
Merry Christmas
and a Happy New Year

N o rth w e s te rn B en ke r, D e c e m b e r,
Federal Reserve Bank of St. Louis



The Correspondent
Bank Department
First Bank
Federal Reserve Bank of St. Louis

N o rth w e s te rn B an ke r, D e c e m b e r, 1980


M innesota N ew s

National City Bank Holds Grand Opening

NATIONAL City Bank of Minneapolis’ new detached facility at 3905 West 69th Street in Edina was officially opened recently with a flag
raising ceremony. Participating in the ceremony were (left to right) Jeffrey R. Arnold, v.p. and man. Southdale office; C. Bernard Jacobs
chmn. of the bd. and c.e.o., James VanValkenburg, mayor of Edina, and James H. Hearon III, president. National City’s new office
features6,300 square feet with five drive-up lanes. The building was designed by Boarman Architects, Inc., and the general contractor for
the project was Adolfson and Peterson. The facility is currently staffed by 17 persons.

The board of directors of First
Bank System, Inc. has elected Rich­
ard M. Bressler a
d ire c to r. M r.
Bressler is presi­
dent and chief
executive officer
of B urlington
Inc., St. Paul.
Louis W. Menk,
chairman of Bur­
lington Northern
and an FBS di­
rector for nine R. M. BRESSLER
years, has retired
from the board. Mr. Bressler began
his business career in 1952 at General
Electric Company in financial man­
* * *
William W. Strausburg has been
elected senior vice president and
group executive, Minnesota South
Group for First Bank System, Inc.
Mr. Strausburg began his banking
career in 1961 at First Bank Billings,
Mont. In 1962, he joined First Bank
Helena, Mont., in a part-time
capacity while attending college. He
returned to First Bank Billings in
1964 and was elected assistant
cashier in 1966. Mr. Strausburg was
promoted to commercial loan officer
in 1967 and to assistant vice
president of commercial loans in
He joined the Marine National
Bank in Neenah, Wis., as vice
president of commercial loans in
1970. He returned to First Bank
Billings in 1973 as vice president of
commercial loans. Mr. Strausburg

N o rth w e s te rn B en ke r, D e c e m b e r,
Federal Reserve Bank of St. Louis


The services offered by Northwest­
joined First Bank Austin, Minn., in
1975 as senior vice president and ern’s Mexican office will be primarily
second officer and was elected in the areas of business development
president in 1977. He has served in and financial assistance, Mr. John­
his most recent capacity as president son said. Mexico does not permit
and chief executive officer of that foreign banks to solicit or accept
deposits or offer check-cashing
bank since 1978.
A graduate of Carroll College, facilities within the country.
Helena, Mont., Mr. Strausburg
* * *
holds a BA degree in English.
C. Bernard Jacobs, chairman of the
board and chief executive officer of
* * *
N a tio n a l C ity
Northwestern National Bank of Bank of Minnea­
Minneapolis has received approval polis, has an­
nounced the elec­
from M exican fi
tion of David L.
a u th o r itie s to
Andreas to Na­
open a represen­
t i o n a l C i t y ’s
tative office in
board of direc­
Mexico City, ac­
tors. Mr. An­
cording to James
dreas will also
W. Johnson, sen­
serve as vice
ior vice president
president of NaD A‘ ANDREAS
of N orthw est­
tional City Bancorporation, which
ern’s internation­
owns 96% of National City Bank.
al banking de­
Mr. Andreas previously served as
With that approval, Northwestern an officer in N ational C ity ’s
becomes the first bank in the Ninth commercial loan department. He was
Federal Reserve District to establish graduated from the University of
a facility in that country. The office Denver where he earned his BA and
will be located in “Zona Rosa,” near from Mankato State University
the United States embassy, at Rio where he earned his MA, both
degrees being in sociology.
Nilo 90, Mexico 5 DF.
Michael B. Moore, vice president,
international finance division, has
The board of directors of First
been named manager of the new
office, which opened November 3. Bank Minnehaha, Minneapolis, has
Mr. Moore speaks Spanish fluently elected Newton R. Fuller president
and has worked with Latin American and a director. Mr. Fuller succeeds
countries since he came to North­ Thomas H. Bartholomay who has
joined the metropolitan banking
western in 1978.


C a p ita l
F in an cial Corp.

C a p ita l
N o rth w e s t

Asset Power.

G et m ore m ileage out of each dollar.

Your clients' assets can secure a tailor-made
revolving credit line. Accounts receivable,
inventories, machinery, equipment, land and build­
ings can be turned into Asset Money™ It's the
smoothest route for companies short on working
capital, those looking toward expansion or growing
firms eager to increase sales. Or money for
buy-outs, mergers and acquisitions.
Bank participations.
Banco Financial Corporation can help get your
clients off to a great future with Asset Money.
Contact Clarence Adams, Lee Mork, Robert Olson,
or Paul Weingart, (612) 372-7988, 830 Northwest­
ern Bank Building, Minneapolis, Minnesota 55402.

Clients with considerable working capital may wish
to conserve it by leasing needed equipment.
Decide on a Lease Purchase Contract with a
guaranteed purchase option at the end of the term.
Go with a leverage lease or purchase
equipment outright.
Whatever your clients’ business, whatever the
equipment they need — Lease Northwest, Inc. has
the financing options that put it to work.
Contact Dave Michael in Minneapolis at
(612) 372-7416, Roger Meier in Omaha at
(402) 536-2310, Jim Sheedy in Des Moines at
(515) 245-3392, or Chris Hoss in Fargo at
(701) 293-8136


Le a s e

n o r th w est


Affiliated with Northwest Bancorporation

Financial Corporation

An Affiliate of Northwest Bancorporation
Federal Reserve Bank of St. Louis

N o rth w e s te rn B an ker. D e c e m b e r, 1980

. Ju



N o rth w e s te rn B an ke r, D e c e m b e r,
Federal Reserve Bank of St. Louis



Member F.D.I.C.
Federal Reserve Bank of St. Louis

N o rth w e s te rn B en ke r. D e c e m b e r, 1980


M innesota N ew s

Northwestern National Opens New Facility



division of First Bank System, Inc.
Mr. Fuller has been associated
with First Bank System throughout
his entire business career, beginning
in 1947 at First Bank Minneapolis. In
1954, following military service, he
returned to First Bank Minneapolis
and held various positions in the
operations department.
Mr. Fuller was appointed assistant
cashier in 1958 and served in that
capacity for the real estate and
commercial lending areas. He was
promoted to assistant vice president
in 1965. In 1969, he was elected a vice
president in the retail banking group
with responsibility for branch
administration. He assumed addi­
tional responsibility for the personal
banking center in 1975, and was
promoted to senior vice president and
group head in 1976.
Jon D. Gamaas has been promoted
to assistant vice president and
human resour­
ces officer-Twin
Cities Group for
First Bank Sys­
tem, Inc.
Mr. G arnaas
has been associa­
ted with FBS
since 1972 when
he joined First
Bank Hopkins as
a m anagem ent
associate. He has held his most recent
position as human resources officerTwin Cities Group since 1979.
American National Bank & Trust
Co., the Twin Cities’ largest inde­
pendent bank,
has announced
the appointment
of Robert W.
Brennan as as­
sistant vice pres­
ident-bank ser­
vices operations.
Mr. Brennan
joined the bank
in 1967 as an
accountant. His R. W. BRENNAN

N o rth w e s te rn B an ke r, D e c e m b e r,
Federal Reserve Bank of St. Louis


NORTHWESTERN National Bank of Saint Paul opened its newest facility-the Maplewood
Mall office recently. Maplewood Mayor John Greavu, bank director Katherine V. Lilly and
branch manager Tom Palmer joined Northwestern’s president, G. Richard Slade, in the
ribbon-cutting ceremonies. The ribbon, which consisted of 50 two-dollar bills, was
accepted by Sandy Kern, director of the Northeast Y.M.C.A. as a donation. Located across
from Sears in the Maplewood Mall at 2945 White Bear Avenue, the new bank opened its
branch office to serve the Maplewood, North St. Paul, White Bear Lake, Birchwood, Gem
Lake, Little Canada, Mahtomedi and Vadnais Heights areas.

new area of responsibilities includes
purchasing, facilities management,
insurance, the bank’s telephone
system and record retention.
Mr. Brennan attended St. Thomas

Consulting Job
for Kenneth W. Leaf
Kenneth W. Leaf, former regional
administrator of national banks in
R egion N ine,
headquartered in
Minneapolis, has
jo in e d M illerSweeney Com­
pany, a bank
brokerage and
consulting com­
pany located at
1000 Currie Ave­
nue in Minnea­
Mr. Leaf, who retired in April of
this year from his administrative
position, will work with John A.
Sweeney in working with area banks.
Mr. Sweeney is a retired executive
officer of Northwest Bancorporation
and a former national bank examiner.
Miller-Sweeney Company was
formed in 1976 by Jerrold T. Miller,
principal of J.T. Miller Company,
Minneapolis, and Mr. Sweeney to
offer area banks advice and counsel
on unique and non-recurring banking
matters. Inquiries by bank owners
desiring to dispose of bank holdings,

and those interested in a bank
ownership were numerous in the early
activities of the company, but have
decreased in the past two years
because of financing costs and tighter
Advisory services include apprai­
sals of minority shares of banks,
recommendations on proposed bank
building programs, appraisals for tax
purposes, appraisals for purchase or
sale of majority stock, including
negotiations as broker. Mr. Leaf’s
activities will encompass all of the
above activities, including advice
relative to bank policies, practices
and procedures.
Mr. Leaf’s initial activity will be to
assist absentee owners, and he feels
that Miller-Sweeney Company can
supply a tailored periodic report for
Barbara Armajani, president and
chief executive officer of Power Dry
Goods Company,
has been appoin­
ted a director of
Midland Nation­
al Bank of Min­
neapolis, accor­
ding to Harry
Benson, presi­
dent and chief
executive officer.
Mrs. Armajani
was president of
J.B. Hudson Jewelers from 1978 to
February of 1980 before joining
Powers. She is a graduate of
Macalester College.


„.from the Bankers of American.
From the top, clockwise:
Jim R eagan, Bob Sipple, Bob Jacobson , M ike M cN eil, Jana Kirkeby, Lori Arthur,\
M ary M eehan, Tom M ork, Steve Rykkeli, D on John son , David H yduke

American National Bankand TrustCompany
Correspondent Division
Federal Reserve Bank of St. Louis

N o rth w e s te rn B an ke r, D e c e m b e r, 1980

His banker has to make decisions
alm ost overnight.
Buying inventory while the price is right can
make the difference between profit and loss
for a retail lumberyard. Its a competitive
business—with lots of quick price changes
that need a quick response. And if you’re
going to be the kind of banker this business
needs, sometimes you have to turn on a dime.
T h a t’s when it helps to work with the
correspondent bankers at American National.
We don’t put layers of review' committees
Federal Reserve Bank of St. Louis

between you and the overline you need.
W hen you bring us a sound deal with all the
necessary information, we’ll make a decision
fast. W ithout a lot of paper-shuffling.
Because w e’re the bank for business.
We spend almost all our time helping busi­
nessmen grow. And that helps us do a better
job for an aggressive correspondent. Shake
hands with American National. T he bank
for business.

ment and his new responsibilities as
cashier will include the management
of that department.

Charter Issued at Galva
A charter has been issued to the
Community State Bank of Galva,
S.E. 6th Avenue and U.S. Highway
34, according to William C. Harris,
commissioner of banks and trust
The state bank’s total capitaliza­
tion $1 million will consist of $400,000
in capital stock; $400,000 in surplus
and $200,000 reserve for operating
expense. There will be 40,000 shares
of stock with a par value of $10 each.
Officers are: Wilbur E. Nelson,
chairman of the board; Roger R.
Larsen, president; Gil R. Achterhof,
vice president; Michael E. Massie,
secretary, and Barbara L. Nelson,
Directors are: Wilbur E. Nelson,
Cambridge; Leon W. Robinson,
Woodhull; Gil R. Achterhof, Jack
Hathaway, Roger R. Larsen, Larry
E. Lindberg, Fred C. Lord, Jr., and
Michael E. Massie, Galva.
Milton F. Darr Retires
Milton F. Darr, Jr. has retired as
vice chairman of the board of LaSalle
National Bank,
C h icago. M r.
Darr, 59, will
continue as a
member of the
board of direc­
Mr. Darr’s ex­
traordinary ca­
reer at LaSalle
began in 1946. In
January 1949, he
was promoted to officer, and since
then he has served in various
executive positions. In 1962, Mr.
Darr was elected to LaSalle’s board of
directors when he became executive
vice president and chief administra­
tive officer. In January of 1964, he
became LaSalle’s president and
added the title chief executive officer
in August of 1968. Mr. Darr held the
position of chairman of the board
from late 1968 until November 1973.
Federal Reserve Bank of St. Louis

From 1974 to 1977 he again served as
president of LaSalle, and in recent
years he has served as vice chairman
of the board of the bank. Mr. Darr is a
past president of the American
Institute of Banking.
Promoted at Monmouth
Two personnel changes at the
National Bank of Monmouth have
been announced by Jack D.
Lemmerman, chairman and chief
executive officer.
Assistant vice president Charles E .
Vaughn has been promoted to the
position of cashier, and Gordon K.
Young has joined the farm loan
Mr. Vaughn, who was recently
elected cashier, succeeds Jerry L.
Sloss, who has resigned his position
after more than 17 years of
employment at the bank. Mr. Sloss
will head the new Monmouth office of
Bankwork, Inc., a Jacksonvillebased computer processing firm that
will provide computer services to the
National Bank of Monmouth and
other area banks beginning in
Mr. Young will replace assistant
vice president Ronald O. Stone, who
has resigned to become vice president
of the State Bank of LaHarpe, after a
10-year tenure at the National Bank.
Mr. Young, whose background
includes both farming and finance,
joins the National Bank after 14 years
of employment at Monmouth Col­
lege. He majored in business
administration and mathematics at
Monmouth College, receiving his
degree in 1961.
Mr. Vaughn has been with the
National Bank since 1971. He
attended Western Illinois Universi­
ty. A 1978 graduate of the Illinois
Bankers School at Carbondale, Mr.
Vaughn has worked in the National
Bank’s instalment loan department
and has served as assistant cashier.
In 1979, he was elected assistant vice
president of the operations depart-

Promoted at Boulevard Bank
The National Boulevard Bank of
Chicago board has effected the
following promotions according to an
announcement by Henry K. Gardner,
president: James M. Quinn was
promoted to vice president, Robin
Aguilar to assistant vice president,
Brian R. Black to operations officer,
Jeffrey L. Boas to assistant cashier,
Algirdas J. Katkus to computer



operations officer and Charles E.
Seitz to assistant cashier.
Joins Arlington Heights
Bank & Trust Company
Paul S. Belin has joined the Bank
and Trust Company of Arlington
Heights as a commercial banking
representative, according to W.C.
Wolf, chairman of the board and
president. Mr. Belin will specialize in
commercial business development
and credit structuring.
Mr. Belin continues to serve as
president of the Paul S. Belin
Company of Northbrook, which
offers credit placement services.
Prior to establishing his own firm, he
was the regional manager, finance
department, of the Commercial
Credit Company.
A graduate of Lewis University,
Lockport, Mr. Belin has also done
graduate work at Northern Illinois
University, DeKalb.
Promoted at Skokie
The board of directors of the First
National Bank of Skokie approved
the promotion of Ronald W alczyk to
assistant vice president in charge of
personal bank marketing and mana­
ger of the customer service division.
The quarter billion dollar bank also
announced the promotion of Les
Gack to the position of manager of
N o rth w e s te rn B an ker, D e c e m b e r, 1980


Illinois New s

Elected at Lincoln National
Herbert Dolowy, president and
chief executive officer, Lincoln
National Bank of
C h ic a g o , a n ­
n o u n c e d th e
election of Pat­
rick Mulhem to
data processing
manager. In his
new position Mr.
M ulhern w ill
have complete
charge of all data
processing pro­
duction and be responsible for new
Mr. Mulhern has been employed at
Lincoln National Bank for the past 11
years. He attended Chicago City
College and NCR Computer School.

Gessel, Kathleen Lindquist and
Nancy Powley were promoted to
assistant cashiers.
Mrs. Dailey has responsibility for
the bookkeeping department. She
has been working in that department
for thirteen years since she began at
the bank. Mrs. Gessel assumes the
responsibility of the new accounts
area. During the past ten years Mrs.
Gessel has worked in several
departments. Kathleen Lindquist
will be supervising the note
department. Her thirteen years of
experience have been in many areas of
the banking field. Nancy Powley will
be making loans in the time pay
department and real estate depart­
ments. She has been at University
National Bank for the past ten years.

Jeffeory E. Miller has been hired to
head the real estate loan division of
Exchange National Bank of Chicago.
He joined Exchange from The Na­
tional Boulevard Bank of Chicago
where he was involved in real estate
lending since 1973. Making the an­
nouncement was Homer J. Holland,
Exchange president.

Promoted at Galesburg
Richard M. Bishop, president of
First Galesburg National Bank, has
announced the promotion of Mark W.
Johann to assistant vice president.
Mr. Johann joined the bank in May
of 1977 in the instalment loan
department and was promoted to
loan officer in 1978. In November,
1979, he became acting manager of
the instalment loan department and
in April of this year assumed full
responsibilities as manager. Mr.
Johann graduated from Illinois State
University in 1976.
Promoted at Peoria Bank
William G. Lyman Jr., president
and chairman of the board of
University National Bank of Peoria
announced that Betty Dailey, Phyllis



N o rth w e s te rn B an ker, D e c e m b e r,
Federal Reserve Bank of St. Louis


acting as coordinator for the central
information file.
Rita L. Welter has joined the bank
as the new trust officer. Most recent­
ly she was assistant trust officer at
Glenview State Bank and formerly
was assistant land trust officer at the
Bank of Ravenswood.
Carmella Guffrea, formerly assist­
ant marketing director, has been
assigned the duties of marketing di­
rector. She joined the bank as a sec­
retary in the marketing and advertis­
ing department.
John Plueger has been appointed
operations officer and assistant
cashier. He joined the bank last
September and was formerly man­
ager of the Harlem Avenue facility.

Several appointments have been
made at the O’Hare International
Bank, according to Lyndon D. Com­
stock, president and chief executive
Daniel W. Morava, vice president
and controller since 1978, has been
appointed vice president-business
development. He will plan and imple­
ment methods of gaining new cus­
tomers through marketing, public
relations and personal contact.
Peter Croner, auditor, has been
promoted to controller to serve as the
bank’s chief accountant. He joined
the bank in 1978 after graduating
from DePaul University and is a
Duane Dudek, assistant manager
of the bank’s office at 6401 N.
Harlem, was promoted to branch
manager. He joined the bank in 1979.
Paul Moss, loan officer, was named
to the position of auditor. He joined
the bank last year and is currently

Sears May Sell
$200 Million Notes
Sears, Roebuck & Company,
Chicago, has plans to sell $200 million
investment notes to the public.
Interest rate volatility has delayed
the sale up to now. In fact, in
October, Sears withdrew the registra­
tion, saying it would retain the
capacity to offer the notes when
market conditions become more
The notes are much like the
certificates of deposit sold by banks
and savings and loans. They’ll be sold
through a subsidiary, Sears Securi­
ties Sales Inc., in denominations
ranging from $1,000 to $150,000,
with maturities of two to eight years.
The notes, called “consumer deben­
tures’’ by some bankers, are secured
only by “the general credit and assets
of Sears,’’ a proposed pamphlet on
them says.
They represent a formidable new
challenge to commercial banking.
Sears is free to sell its notes
anywhere, at any interest rate it finds
competitive. Banks, by contrast,
can’t stray across state lines, must
put aside big cash reserves to back
deposits and run up against interest
rate limits.
“If Sears is successful, will a host
of other nonbank institutions follow?

(Continued from page 20)

20 % of your balances and 20 % of your accounts hold
80% of your balances).
• No new service charge income developed.
A review of some New England institutions shows
that seven of 17 that began offering NOWs had not
changed by a later survey, for they had started high
enough; six had lowered their price one way or another.
From this experience and review of pricing we can see
that charging for NOWs will maintain or increase net
profit at the risk of losing market share. What about
your competition? How aggressively are the thrifts apt
to price? Many will price low, looking for DDA accounts,
then raise service charges. Don’t jump to meet this lower
price. How about your bank competition? What is it
doing or what will it plan to do?
Can you price to induce some account consolidation?
Encourage your customers to combine savings balances
and DDA balances into new accounts. (Minimum
balance requirements will help.)
Try to induce customers to move balances from other
institutions. A lot of your customers have balances in
savings and loans you don’t know about. Seek
consolidation of these accounts in your bank. It is cost
effective and builds your deposit base.
Customer Account Analysis
Consider that some surveys show that 50 % to 75 % of
most bank’s customers use only one service and 25% to
40% use only two services. Usually, this is checking
and/or savings and now we are seeking to have them
bundle these accounts. It is time now for you to be Full
Service banks as the ABA advertises. You must be able
to serve all the customer’s needs. When you make the
loan, you gain the loyalty.
So, bundle your accounts and unbundle your products
(services). Some surveys show that over 95% of all
people have checking accounts and 60 % to 80 % of all
people have savings accounts, but only 25% to 40%
probably have savings accounts at your bank.
NOWs provide opportunities for bundling accounts

both within your bank (thereby reducing costs) and from
competing banks, thrifts and credit unions (thereby
increasing balances).
Unbundling of Services
Consider explicit charges for:
• Time users [wasters] for bank personnel—account
reconciliation, balance inquiries, credit inquiries,
microfilm research.
• Savings account products—low balance accounts,
activity charges, telephone transfers.
• Items which tend to be price inelastic—non-suffi­
cient funds, stop payments, overdrafts (charge more for
this than for returned item. There is a perceived value to
the customer.)
• Costly paper—bank-by-mail envelopes, bank-by
mail postage, mail deposit receipts (you have
traditionally subsidized mail customers. Maybe you
were inconvenient to them, but you should review this),
personalized checks, return of paid checks (consider
truncation. Could be part of NOW package. Send
instead a one-page descriptive report).
• Special groups of DDA—senior citizens, students,
civic organizations (especially if they get NOW
• Miscellaneous—safe deposit boxes, cashing non­
customer checks.
NOW Account Opportunities
NOW accounts provide these opportunities for
increased profitability, both in the absolute and relative
to current DDA:
• To get rid of “free” products.
• For monthly maintenance fees on all accounts.
• To service charge all accounts.
• To require higher minimum balances than New
England (New York did and succeeded with higher
• To get smaller balance customers to “bundle”
accounts from other banks, thrifts and credit unions into
your bank.
• For a “Value swap” with customers.
By pursuing these steps of setting objectives, doing
m arket research, pricing NOW accounts and
unbundling of services and pricing for them you will
position your bank for greater profitability.

an extent probably heretofore un­
known but will be essential to sur­
vival. The critical areas where such a
tionally, 90% of the checking ac­ correspondent bank will help you in­
counts are controlled by about 24 % of clude:
the customers, and 28% of the cus­
-Skilled Asset/Liability Man­
tomers control 92% of the savings
agement. This will progress
balances. What would happen to a
from being a desirable tech­
bank’s labor cost if it reduced its cus­
nique to being the essence of
tomers by 75 %, while only losing 8 %
of its deposits?
-Training and assistance so as to
4. Increase non-interest income.
achieve a necessary level of pro­
Fees and service charges will become
ductivity. Productivity pro­
the name of the game.
grams will have to be developed
5. Establish and maintain a corre­
by a staff unit or a committee
spondent relationship with an up­
taking a hard look at measure­
stream bank that can provide
ment behavior and organiz­
necessary guidance and services.
ational structure. Outside guid­
This will entail the payment of fees to
ance will be a must.
BANKING IN 1980s . . .
(Continued from page 23)
Federal Reserve Bank of St. Louis

-Determination of your costs.
No bank will survive for the
next ten years without an ade­
quate financial inform ation
system and adequate cost in­
-Access to secondary loan mar­
kets. This will not only entail
mortgages but also other loans.
Services from correspondent banks
won’t be free. Our survival depends
upon that—but it will be a bargain
when viewed in light of the alterna­
Certainly banking’s future is not
what it was in 1950 or 1960 or 1970.
The challenges today are great, but
as Joseph J. Pinola, head of Western
Bancorp, recently said, “We will go
on finding ways to prosper.”
N o rth w e s te rn B an ker, D e c e m b e r, 1980


LeFebure Markets “Insider” Lobby Desk;
HE INSIDER—anew concept in
transaction transport developed
by LeFebure—opens up an exciting
dimension of lobby customer service.
With it, a bank can offer customers
new levels of convenience, while
enhancing its own security. The


sit-down teller has no operating cash,
so the station may be located in the
busiest part of the lobby without
compromising security. The carrier
remains in the tube at all
times—another security plus for
lobby locations.


system can be installed for stand-up
self-service, or sit-down stations
where one teller can process all types
of custom er transactions, from
opening new accounts to selling
travelers checks, taking loan pay­
ments and making savings deposits
and cashing checks. In short, The
Insider enables a bank to offer its
customers the speed and convenience
of self-service or personalized,
one-stop full-service in a relaxed
atmosphere—or a combination of
The Insider conveys media via
pneumatic tubes, a concept which
LeFebure pioneered so successfully in
its Tel-Air drive-up systems. Rectan­
gular tubing connects customer
stand-up stations or teller sit-down
desks with a central teller station.
Located in a remote part of the
facility, this teller enjoys maximum
security and has instant access to all
customer records. Because of this,
one central teller can process
transactions for a number of lobby
Even more important, this ar­
rangement means no large funds or
negotiables are concentrated on the
banking floor at any time. The

N o rth w e s te rn B an ker, D e c e m b e r,
Federal Reserve Bank of St. Louis



The Insider is easy to install, since
tubes can be positioned at 90 degree
angles, eliminating costly burying.
Moreover, the fully pneum atic
system eliminates the need for
expensive problem-prone mechanical
lifting devices at either end. Lobby
units are compact and attractive.
For more information, contact
LeFebure, Cedar Rapids, Iowa
BMA To Hold Community
Bank Seminar in San Diego
“ Impact ’81” is the theme of the
Bank Marketing Association’s annu­
al Community Bank CIO Seminar to
be held March 15-18, 1981, at Hotel
del Coronado in San Diego, Cal. The
seminar is designed exclusively for
chief executive oficers of banks with
assets up to $100 million.
Topics to be discussed include the
planning process, management style,
pricing, executive stress, future
technology, a NOW account update
and a special session on banking
myopia. In addition, industry
experts and bank presidents will
present a blend of theory and how-to
applications in a format which

includes panels, concurrent breakout
sessions and rap sessions.
Spouses are invited to attend the
CEO sessions and the specially
planned “Spouses Program Lec­
Registration fee is $375 (BMA
member discount fee, $295). The
spouses registration fee is $75.
Enrollment has been limited to
ensure the right environment to meet
and talk with peers from other
community banks. In previous years
there have been waiting lists for the
For more information contact
Michael A. Lindahl, director, Com­
munity Bank Department, Bank
Marketing Association, 309 West
Washington Street, Chicago, IL
60606; (312)782-1442.
Firm Issues Bank Survey
A survey of the accounting and
reporting practices of nearly 400
community banks in 43 states has
been published by McGladrey
Hendrickson & Co., certified public
accounting firm, which initiated the
survey early this year.
Based on the premise th a t
“accounting and reporting practices
of community banks have received,
for the most part, slight attention
from supervisory authorities and
accountants alike,” the McGladrey
organization set out to discover what
the prevailing practices actually are
among banks with less than $200
million in assets.
Heading the survey was James M.
Koltveit, a partner in McGladrey’s
Rock Island, 111. office, and
coordinator of services to banks. He
said that survey forms were sent to
about 2,000 banks in the survey
category, and that the response
amounts to a 20 percent return.
The 36-page report includes data
on one-bank holding companies,
multi-bank holding companies and
independently owned banks, Mr.
Koltveit said. It covers procedures
such as data processing, accounting
systems and customer profitability
analysis, trust activities, subsidiar­
ies, exam inations, income tax
accounting, accounting basis and
verbatim information taken from a
wide range of bank annual reports.
A copy of the bank survey,
“Accounting and Reporting Prac­
tices of Community Banks,” is
available from McGladrey Hendrick­
son & Co., 525 17th Street, Rock
Island, IL 61201.


ABA Reveals New Housing Strategy
HE American Bankers Associa­
tion has revealed five short-term
and three long-term housing policy
objectives it intends to pursue to
create a legislative and regulatory
environment which will facilitate the
banking industry’s continuing role in
meeting the rising demand for
housing finance.
The more immediate goals, an­
nounced at ABA’s annual convention
by R. Van Bogan, chairman of the
Association’s Housing and Real
Estate Finance Division, are:
• To recommend legislative
changes to the National Banking Act
to give banks w hatever new
substantive lending powers they need
to “ (a) meet the general housing
demand of the 1980s; (b) meet the
special community housing needs of
low-income buyers, minorities and
women; and (c) be competitive with
other real estate lenders, such as
savings and loan associations and
investment banks.”
• To recommend additional legis­

lative changes to allow commercial
banks to establish S&L-like service
corporations so that banks—espe­
cially smaller ones—can enjoy the
advantages in cost and efficiency of
having their m ortgages jointly
packaged for resale in the secondary
market or having their mortgage
portfolios jointly serviced.
• To seek the introduction of
remedial Congressional legislation to
halt the Federal Home Loan
Mortgage Corporation’s discrimina­
tory practice of charging a V2 % sales
fee to commercial banks and
m ortgage companies while not
charging any fee to savings and
• To make recommendations to the
office of the Comptroller of the
Currency regarding its adjustable
rate mortgage proposals so that they
will further encourage a continuing
flow of bank credit to housing. ABA
will work with both the public and
private secondary market agencies to
develop a viable m arket for

Analyze Coin Handling Quality

FINE TUNING of coin handling equipment during development stages is accomplished at
Brandt, Inc., Watertown, Wis., by a newly-purchased motion analysis system in the
company’s research and development department. High-speed mechanical motions of
sorter/counters and other machines, for banks, vending companies and other large
volume money handlers, are analyzed with the aid of camera, stroboscope and monitor/
control console. Pictures of the coin action, recorded on tape, can be “ frozen” on the
screen or presented in slow motion, for both perfection and problem analysis in new
product development activities.
Federal Reserve Bank of St. Louis

adjustable rate mortgages.
• To assure that the programs of
the U.S. Department of Housing and
Urban Development’s yet-to-be cre­
ated Solar Energy Bank are
responsive to the market needs of
bank customers and their communi­
ties. Authorized by the new Synfuels
Law, the bank will offer subsidized
energy loans to eligible builders,
purchasers and owners of homes and
other buildings.
Mr. Van Bogan, who is also
president and chief executive officer
of the Fidelity Bank of Indiana,
Carmel, stated that ABA’s long-term
objectives are:
• To restructure the Federal Home
Loan Bank System to make it the
n atio n ’s central housing credit
facility, servicing all depository
institutions —not just thrifts.
• To have the Federal Housing
Administration taken out of HUD
and reconstituted as a financially self
sufficient independent agency that
insures bank mortgages, much like
the Federal Deposit Insurance
Corporation functions for bank
• To have HUD maintain responsi­
bility for community economic
development, including subsidized
housing programs now under FHA.
Also, HUD would coordinate the
governm ent’s housing research
efforts, which should focus on the
production of more affordable quality
housing, giving attention to innova­
tive land use and building design.
Aetna Announces Purchase
Aetna Business Credit, Inc. of
East Hartford, Conn, has announced
that final approval of the purchase of
Aetna Business Credit, Inc. by
BarclaysA m ericanC orporation, a
subsidiary of Barclays Bank Inter­
national Limited, from Aetna Life &
Casualty, has been issued by the
Federal Reserve Board.
Aetna Business Credit, Inc., with
asses of $862.5 million on September
30,1980, provides a wide spectrum of
financial services for business and
industry. Headquartered in East
Hartford, Conn., ABCI has offices in
Atlanta, Chicago, Dallas, Detroit,
High Point, N.C., Los Angeles,
Miami, Milwaukee, Minneapolis,
New York and San Francisco. The
operations of Aetna Business Credit
will be renamed BarclaysAmerican/
Business Credit, Inc. following the
consummation of the purchase.
N o rth w e s te rn B an ke r, D e c e m b e r, 1980


South Dakota
J. W. Thomson, pres., Centerville
J. M. Schwartz, exec, mgr., Pierre


SDBA Sponsors Unique Economics Program
For 260 High School Seniors
HE South Dakota Bankers
Association, through its educa­
tion committee composed of bankers

Through the community bank,
individuals are provided with invalu­
able services. In the early times, a
cookie jar, cupboard or mattress may
have been a sufficient location to
store money. Now days, the bank
provides a secure place to “store”
money in addition to the opportunity
to increase this amount through
interest. Granted, this interest rate
may not always keep up with
inflation; it is more than the su m paid
out by a jar, however. Checking is
available giving an easily accessible
means of funds while being safer to
carry than cash. In addition,
cancelled checks aid a consumer’s
bookkeeping by providing a receipt.
Modern day technology is causing
the emergence of still another
convenience, “instant cash” . Signifi­
cant as these services are, many
others are also available.
Loans provide a source of finance
which is irreplaceable. Individuals
can acquire loans for various needs.
College funds for students provide for
the education of the young in the
comunity which is of great merit not
only to the individual but to society.
Money on loan for homes and cars
furnishes the public with the ability
to own the property as well as
providing employment in the com­
munity through these goods. In
addition to the individual, businesses
are supplied with revenue through
loans enabling the economy of the
community to prosper.
On a whole, money is the “blood”
of our economic system. Through its
regulated circulation a community
continues to thrive and benefits are
gained by all. This vital circulation is
controlled by the “heart” of the
system, the community bank.”

throughout the state, sponsors an
economics seminar for young adults.
This seminar is attended by 260 high
school seniors from all parts of the
state. These students are selected for
this honor by school authorities and
area banks pay the expense of their
trip, meals, lodging and seminar
The purpose of the seminar is to
stimulate the interest of young people
in building financial security and to
give them a better understanding of
our modem money and banking
system. In addition to hearing talks
by a number of financial experts, they
participate in workshop discussions
on various aspects on money
management. The education commit­
tee members augmented by other
bankers act as discussion leaders.
In addition to attending the
seminar, students submit essays
entitled “What A Bank Should Mean
To My Community.” Three awards
are given in the form of a first place
trophy plaque and $50 savings
account, second place trophy plaque
and $25 savings account and third
place trophy plaque and $25 savings
This year’s first place winner was
Mary Wilde of Watertown, S.D. Her
essay, along with the second and
third place essays, was sent to the
membership to use as possible
marketing tools. The text of Miss
Wilde’s essay follows:
“Money, according to the old
adage, is the root of all evil. However,
like all cliches, a number of factors
can influence a person’s reasoning in
reaching such conclusions. Through
consideration of the services rendered
by a community bank, the converse Announces Stock Increase
Miners and Merchants Bank,
can be shown. A comunity bank
makes money the root of the tree of Lead, has increased its capital stock
from $150,000 to $185,000.

N o rth w e s te rn B an ker, D e c e m b e r,
Federal Reserve Bank of St. Louis


Northwestern Promotions
C. P. “Buck” Moore, president,
Northwestern National Bank of
Sioux Falls, has
announced sever­
al promotions:
L eo n ard A.
D ankey
nam ed
assistant mana­
ger at Westwood
branch. Bonita
K. Kempel was
elected assistant
manager, Marion
Road branch. Rose Mary E.
Vortherms was named commercial
loan officer, downtown branch.
Robert S. Dempster was named
credit compliance officer. Mark C.
Lovre was elected mortgage/person­
al loan officer at the Brookings
branch. Curtis H . Alberty was named
assistant vice president/ag-loans,
stockyards branch. Eric Hohman
was named personal loan representa­
tive, Westwood branch. Vicki P.
Ripley was named mortgage/personal loan representative, Marion Road
branch. Marlys A. Harstad was
named ag/personal loan representa­
tive, stockyards branch.








held various positions until her most
recent promotion as vice president
and trust officer. She attended
Casper College.
Nina Woodard has been with First
National since 1971.
Also at First National, Pauline
Marinich, Betty Rose and Brad

Promoted at Mandan
J. E. Noonan, president of First
Northwestern Bank of Mandan, has
announced that
Bill Pfau has
been promoted to
manager of the
operations de­
partment of the
bank. He atten­
ded B ism arck
Junior College
and graduated
from Moorhead
State University
in 1977 with a degree in finance.
Mr. Pfau started at the bank as a
Banco trainee in 1978. He was
promoted to operations officer by the
board of directors in July, 1979.
Elected at Fargo
George W. Schwartz, president of
First National Bank of Fargo,
announced the election of John W.
Pierson to the position of executive
vice president and director at First
National Bank of Fargo, an affiliate
of Northwest Bancorporation.

Promoted at First National
First National Bank of Casper
recently promoted Lynda Coyne,
Elenor Jeffres, Cathy Sears and Nina
Woodard to the position of vice
president, Henry A. Hitch, presi­
dent has announced.
Lynda Coyne has worked in the
operations area of the bank since
joining First National in 1959. Ms.
Coyne was named manager of
bookkeeping in 1976 and in 1978 was
Federal Reserve Bank of St. Louis

Mr. Pierson’s new position respon­
sibilities include loan administration
and marketing administration.
Mr. Pierson began his banking
career in 1965 as a management
trainee at Northwestern Bank of
Lewistown, Mont. He held a variety
of positions at the Lewistown Bank,
primarily in the commercial and real
estate loan departments, transferring
to the Northwestern National Bank
of Great Falls, Mont., in October,
1972. Mr. Pierson joined the First
National Bank of Mason City in
April, 1976 as vice president and was
elected senior vice president in April,
Mr. Pierson holds a BA degree in
economics from St. Olaf College in
Northfield, Minn. He is also a
graduate of the Pacific Coast School
of Banking.
Mr. Schwartz also announced the
election of Wil Schumacher to vice
president in charge of business
development and the appointments
of Jay Eisenbeis to assistant vice
president in charge of real estate and
Paul Gentzkow to commercial loan

promoted to assistant vice president.
Elenor Jeffres has been with P’irst
National for 20 years. She has worked
in various capacities. In 1976 she was
named assistant comptroller and
assistant vice president in 1979. Ahe
attended Park Business School in
Denver, Colo.
Cathy Sears joined the bank as
bookkeeper in the trust department
in 1970. She was named trust
operations officer in 1977 and also has







T hom as have
been named vice
Ms. Marinich
joined the bank
in 1952. In 1975
she was named
loan officer and
a s s is ta n t vice
p r e s i d e n t in
1977. She is a
graduate of Colo­
rado State University.
Ms. Rose has been with First
National for 15 years. In 1976 she was
named assistant marketing officer
and assistant vice president in 1978.
Ms. Rose attended Casper College. In
1977 she graduated from bank
m arketing school held at the
University of Colorado in Boulder.
Mr. Thomas joined First National
in 1970 as a computor operator. He
has also served as assistant vice
N o rth w e s te rn B an ker, D e c e m b e r, 1980



J. J. O’Dell, pres., Brighton
D. A. Childears, exec, mgr., Denver

Voters Reject Statewide Branching
OLORADO voters resoundingly
defeated a statewide branching
proposal in the general election last
month by a vote of 76% opposed to
24% in favor.
On a national basis, it was the first
time in nearly 20 years that a
statewide public referendum has been
held on the branching issue.
The last time was in 1958, when
Missouri voters also turned down a
similar branching proposal by nearly
the identical Colorado margin.
With nearly all Colorado precincts
counted, Proposition Five, as it was
known, was defeated 847,846 to
The fight over “Proposition Five”
was bitter and “emotional” and
proved to be the most expensive
political campaign ever waged in the
state on a ballot issue.
Each side spent more than $1
million for high powered advertising
and promotion programs carried for
weeks on radio, TV and in
Leading the anti-branching fight
was the Independent Bankers
Association of Colorado, which had
organized Coloradans for Competi­
tive Banking as its campaign vehicle.
The proponents had been led by the
Convenient Banking Association,
which had set up Citizens for
Convenience Banking.
The Colorado Bankers Association
had remained nuetral on the ballot
Frank Brainerd Promoted
The board of Colorado National
Bank of Denver recently announced
that Frank J. Brainerd has been
named senior vice president and legal
counsel. Mr. Brainerd is also
currently a senior vice president and
legal counsel of Colorado National
Bankshares. Inc. the holding com­
pany .
N o rth w e s te rn B an ker, D e c e m b e r,
Federal Reserve Bank of St. Louis


Mr. Brainerd, a graduate of Trinity
College and Harvard Law School,
joined Colorado National Bank in
1957 and served as a tru s t
administrator and commercial loan
officer. In 1963, he was elected vice
president and in 1976 was named
legal counsel.
In 1979, he was promoted to senior
vice president and legal counsel of
Colorado National Bankshares, Inc.
In his position he serves as head
administrator of the legal depart­
ments of Colorado National Bankshares, Inc. and Colorado National

Appointed at United Bank
United Bank of Denver is pleased
to announce the appontment of
Raymond C. Jones to the position of
commercial banking officer.
Mr. Jones joined UBD in
November, 1979 as a commercial
banking representative. He is a
graduate of Drexel U niversity,
Philadelphia, Pa., with a BS degree
in finance.
Staff Realignment
At Central Bank of Denver
The Central Bank of Denver board
recently promoted seven employes to
positions as assistant vice presidents
and elected six others to positions as
Promoted to assistant vice presi­
dent positions were: Steve J.
Kostiuk, David A. Lisowski, Philip
C. Lyon, Stephen A. Nadolny, James
C. Sodey, Alfonso Strock and George
T. Trayer.
Elected to officer positions were:
Susan M. Black, Gregory P. Cooke,
Darlene A. Evans, Emily L. Fohn,
Jeffrey L. Hyde and Frank B.





PLUS System Continues Rapid Expansion


OCKY M ountain BankCard
System and its PLUS System of
shared automated tellers have been
experiencing rapid growth over the
past few months. The PLUS System,
headquartered in Denver, Colo., is
one of the largest interstate shared
ATM networks in the nation offering
both national and regional debit card
With the addition of The Arizona
Bank’s 45 “Simon” ATMs, 176
automated banking facilities are now
operational in seven states. Custo­
mers of banks, thrifts, and credit
unions may now access depository
and credit card accounts at PLUS
System ATMs in Arizona, Colorado,
Kansas, Nebraska, New Mexico,
Wyoming and South Dakota. An
eighth state, Utah, will have PLUS
Centers operational shortly.
D. Dale Browning, president of
RMBCS, announced that Empire
Savings and Midland Savings, both
headquartered in Denver and each
with assets in excess of $1.1 billion,
have joined the system and will begin
issuing both Visa Debit and ATM
proprietary cards shortly. Also
issuing both cards is Home Federal
Savings, Fort Collins, who plan on
installing an ATM shortly.
With the recent addition of 38 other

financial institutions, the PLUS
System serves 180 banks, thrifts or
credit unions with 251 banking
outlets, which include institutions in
California, Oregon, Idaho and
Montana where PLUS ATMs are not
yet in operation. RMBCS performs
the processing for most Visa Debit
issuers in the country and will
support Master Card II, the recently
announced Master Card Debit card.
Mr. Browning also noted that
ATM volume at PLUS Centers has
tripled in the past six months with
650,000 transactions in October, of
which 30 % were foreign in that they
were initiated by a customer of a
financial institution not owning that
specific ATM. Usage of the Visa
Debit card at merchants has shown a
75% increase this year alone.
Mr. Browning added that statistics of credit cards issued by RMBCS
and debit cards processed by them
indicate that the debit cardholder
utilizes his card 22 % more frequently
than the credit cardholder. He also
announced that a minimum of 20
more ATMs will be added to the
PLUS System prior to year’s end.
Other announcements of additional
PLUS System members are expected







to service is
your Source of
strength in

First of Denver is the source you can
depend on
for prom pt decisive answers and
action on your loan participation requests,
for the newest, most comprehensive
cash management systems,
for an availability schedule which sets
the standard in the Rocky Mountain
for highly skilled bankers who make it
their business to anticipate changes in the
agri-business and metro markets that can
affect your bank and customer needs.
And we respect and protect the
integrity of your customer
So consider the Source.
Federal Reserve Bank of St. Louis

1 ‘W * \

think First. First of Denver

N o rth w e s te rn B an ke r, D e c e m b e r, 1980


Colorado N ew s

Arthur Laffer Speaks on Economy
At Central Bank of Denver Seminar
Mr. Laffer’s address to the seminar
as part of their continuing series of
inform ational seminars for the
Denver business and financial
Colorado Bankshares
Announces Agreement
Colorado National Bankshares,
Inc., has announced that it has
reached agreement in principle with
Mountain Banks Limited for the
acquisition of five of the banks owned
by Mountain Banks Limited and
certain real estate used in conjunction
with those banks. Included in the

i i A TAX cut offers the best hope
for an end to inflation and an
improvement in the economy,” said
nationally known economist Arthur
B. Laffer at a seminar sponsored by
Central Bank of Denver recently.
Mr. Laffer, economic advisor to
Republican President-elect Ronald
Reagan, developed the so-called
“Laffer Curve,” based on the
“supply-side” economic theory that
redistributing the tax burden does
not improve the economy. But,
Mr. Laffer points out, cutting taxes
can lead to an increase in revenue by
increasing the incentive for individu­
als to earn more because they will pay
a smaller percentage of taxes on their
‘‘People don’t work to pay taxes, so
redistribution doesn’t work economi­
cally,” Mr. Laffer said. That is why
the economy has expanded and the
standard of living has improved when
incentives have been increased by
Washington or the individual states,
he pointed out.
“There is, simply, no relationship
between the incidence of the tax
structure and the burden of the tax
rate,” he said.
In addition to cutting tax rates,
Mr. Laffer said he believes we must
“control the value of the dollar”
through net quantities. And when we
reach the point where a stable value
can be depended on for an extended
period of time, people will hold on to
their dollars, he said. “If the dollar
was as good as gold, no one would be
holding gold . . . we would be
holding dollars,” he said.
Central Bank of Denver sponsored
N o rth w e s te rn B en ke r, D e c e m b e r.
Federal Reserve Bank of St. Louis


Elected at Billings
A1 Winegardner, president, First
Northwestern National Bank of
Billings, has an­
nounced th a t
Bruce T. Alton,
p r e s i d e n t of
Rocky Mountain
College, has been
elected to the
bank’s board of
Mr. Alton is a
native of Cleve­
land, Ohio and
has received degrees from Ohio
Wesleyan University and Michigan
State University prior to earning a
PhD in higher education from Ohio
State University in 1971. He became
associated with Rocky that year as
dean of students and ass’t professor
in psychology and has served as its
president since 1975.
Named Director at Billings
Arthur Scott Langman, president
of Billings Livestock Commission
Co., has been named director of the
Pioneer Bank in Billings Heights,
according to James R. Scott,

proposed transaction are the First
National Bank of Pueblo, Park
National Bank of Pueblo, Fort
Collins National Bank, Boulder
National Bank and Aurora Mountain
Bank, as well as all of the real estate
owned by the banks and a new 30,000
square foot bank building and
drive-in owned by Mountain Banks
Limited and used by Aurora
Mountain Bank at the Aurora Mall
Shopping Center.
The agreement in principle pro­
vides for a total purchase price of
approximately $40 million subject to
certain adjustments at closing. The
commitment of Colorado National
Bankshares, Inc., is subject to
reaching agreement on a definite
contract and necessary regulatory


Mr. Langman attended Arizona
State University in Tempe, Ariz. and *the University of Wyoming in , _
Laramie, majoring in accounting and
general business. After college, he
became active in the Billings
Livestock Commission Co., a three
generation firm serving the agricul­
tural community since 1934.
Mr. Langman operates a farm 7*
located northeast of Shepherd.

Elected at Great Falls
Judy L. Jackson has been elected ^
cashier of Eastside Bank of Montana,
Great Falls, ac­
cording to an
made by James
R. Eddington,
Mrs. Jackson
has been em­
ployed by Eastside Bank since
1968 and has
been assistan t
cashier since 1978. A former
operations officer, Mrs. Jackson has
filled many positions in the
operations department of he bank.
Federal Reserve Bank of St. Louis


Perform ance
in Today’s
During this period of rapid change in the
financial industry, one objective becomes
more important: the need to be competi­
tive while remaining profitable.
At NBC, high performance is paramount for
ourselves and the banks we serve. That’s
why we’re taking an aggressive approach.
We’ve brought Alex Sheshunoff to Nebraska
to share his insights on the specifics of high
performance banking. Our bankers share his
knowledge and enthusiasm and they offer
profitable guidance in such key areas as
computer services, correspondent ties, elec­
tronic banking, investment and trust man­
agement and much more.
High performance isn’t just something we talk
about at NBC. It is something we work for
every day. And th at’s what it takes to be
Call us. Our enthusiasm for the future is

Jim Nissen, President


National Bank of Commerce
The Bank with the Plus

NBC Center, 13th & O St., Lincoln, NE 68508
Telephone (402) 472-4321, WATS 800-742-7317

N o rth w e s te rn B an ke r. D e c e m b e r,
Federal Reserve Bank of St. Louis


and will head up the project of
establishing a new detached facility
for Five Points Bank in the southwest
area of Grand Island.
Mr. Luebs was with the Overland
National Bank for the past 15 years
where he was senior vice president.
He is a graduate of Nebraska
Wesleyan and the University of
Nebraska College of Law.
North Platte Bank Sold
Two central Nebraska bankers
have purchased the controlling
interest in McDonald State Bank of
North Platte, which has been serving
the area for more than 100 years. J.Y.
Castle, chairman of the board,
announced that the bank would be
sold to Dale Stine of North Loup and
his son Greg of Ord. The sale is
conditioned on federal regulatory
approval, Mr. Castle said.
No staff changes are anticipated as
a result of the transaction. However,
Mr. Castle and G.W. Taylor,
president of the bank, will retire and
the Stines will provide local
management of the institution.
Named at Wisner
Gary Bellar has been named to the
board of directors of the Citizens
National Bank of Wisner, according
to Paul Briardy, president of the
bank. Mr. Bellar is engaged in cattle
feeding and farming operations in the
Wisner area.
Elected at David City
James N. Norton has been elected
to the board of directors of the First
National Bank of David City. Mr.
Norton has practiced law in David
City for 19 years. He is a graduate of
the University of Nebraska College of
Elected to Neligh Board
Frank Morrison has been elected to
serve on the board of directors of the
National Bank of Neligh. Mr.
Morrison, a University of Nebraska
at Lincoln graduate, farms and raises
livestock on a farm west of Neligh.
Promoted at Grand Island
The board of directors for the
Overland National Bank of Grand
Island has announced the appoint­
ment of three officers to positions of
expanded responsibility.
Federal Reserve Bank of St. Louis

Larry McCoig has been elected vice
president of consumer services and
will assume a position on the senior
management committee. Mr.
McCoig has been with the bank since
1973, most recently serving as
manager of the consumer loan
Karen Niedfeldt, an assistant vice
president who has been with the bank
since 1959, will be responsible for
establishing a credit analysis depart­
ment. Mrs. Niedfeldt will also
assume commercial and agricultural
lending responsibilities.
Bill Scheve, vice president, will
assume commercial account responsi­
bilities in addition to being manager
of the agricultural services depart­
ment. Mr. Scheve has been with
Overland National since 1976.
Named at Bellevue
John D. Hoffmaster has been
named executive vice president and
chief operating officer of the First
National Bank of Bellevue, according
to an announcement by the board.
Prior to his appointment at the
board, Mr. Hoffmaster was a vice
president of commercial loans at the
Ralston Bank. Mr. Hoffmaster is a
1970 graduate of the University of
Nebraska at Lincoln and a 1980
graduate of the Colorado Graduate
School of Banking. He has worked as
a bank examiner for the State of
Nebraska’s Department of Banking.

Services Grow
Three more Nebraska banks have
signed contracts with the Omaha
National Bank to offer the Bank-InIn-A-Billfold electronic banking
service to their customers, according
to John D. Woods, board chairman
and chief executive officer.
The three are the American
National Bank of Omaha, Commer­
cial National Bank of Grand Island
and the Gering National Bank. These
banks bring to nine the number of
financial institutions affiliated with
the Bank-In-A-Billfold system, Mr.
Woods said.
In addition to Omaha National,
other banks offering Bank-In-A-Billfold are Ames Bank, First National of
Bellevue, Omaha S tate Bank,
RalstonBank and Southwest Bank.
Bank-In-A-Billfold is an electronic
banking service which allows cus­
tomers to make deposits and
withdrawals from their checking and
savings accounts at retail store
term inals and autom ated teller
Commercial National and Gering
National are currently offering the
service to their customers. American
National will begin issuing Bank-InA-Billfold cards early in 1981, said
Robert L. Zabawa, president of
American National.

Gesina Steil Dies
Named at Grand Island
Services were held for Gesina Steil,
Norman B. Bahr has been named a
who passed away recently. Mrs.
director of the First National Bank of
Grand Island. He is the president of Steil was employed at the First
Krause Roofing and Sheet Metal Co. National Bank, Scribner, in August,
of Grand Island. He is a graduate of 1912, remaining there until 1962,
the University of Nebraska with a BS when she continued her banking
career with the Scribner Bank. She
degree in engineering.
retired Sept. 1,1972, after 60 years in
banking. She received the longevity
Five Points Names E.V.P.
service award of the Nebraska
Jon F. Luebs has been named Banker’s Association, was listed in
executive vice president of Five “Who’s Who’’ in 1967 and was a
Points Bank of Grand Island. He will member of the National Association
be involved in commercial lending of Bank Women.
N o rth w e s te rn B an ker, D e c e m b e r, 1980


Edward A. Kohout, president of
the Northwestern National Bank, at
the board of di­
rectors’ meeting
announced the
election of John
Behrmann as
vice president
of commercial
Mr. Behrmann
graduated from
Benedictine Col­
lege in Atchison,
Kansas, with a BA degree and from
the University of Notre Dame with a
master’s degree in business admini­
stration. He also is a graduate of the
Graduate School of Banking in
Norman, Okla.
Mr. Behrmann started his banking
career in Detroit, Mich., as a credit
trainee, from there to a bank in

Miami, Fla., as assistant vice
president in the metropolitan bank­
ing division. The last three years were
with the First West Side Bank as vice
president of commercial loans.



The Omaha National Bank an­
nounced an employe transportation
program aimed at conserving energy
that will include employe discounts
on MAT bus tickets and subsidized
parking for carpoolers.
Omaha National employes are
offered a 25% discount on MAT
multi-ride tickets, said John D.
Woods, Omaha National board
chairman. The bank will pick up the
difference between the regular MAT
price and the employe discount.
“To my knowledge Omaha Natinal
is the first Omaha area firm to
subsidize MAT bus tickets for their
employes,’’ said Jerry Erdman,

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For Complete
Credit Insurance
Service . . .

executive director of Metro Area
Transit. “Certainly they are the first
major Omaha employer to offer
discounts. This represents a most
significant step to encourage the use
of mass transit.’’
A recent survey of bank employes
found that about 200 of the firm’s 725
employes now ride the bus to and
from work, Mr. Woods said. “We
look at the discount as a positive way
to encourage more of our people to
take advantage of mass transit and as
an incentive for current bus
customers to continue using the
Mr. Erdman said he knows of
about 100 companies in cities around
the country—including Kansas City,
Chicago, Los Angeles and Dallas—
that are now subsidizing bus fares for
Mr. Woods said the bank also has
leased employe parking space in the
17th Street parking garage. Employe
carpoolers will be given priority in
signing up for about 75 spaces in the
garage with the monthly rental fee
subsidized by the bank. That
program also begins December 1.
Mr. Woods said the combined
subsidies for bus fare discounts and
garage parking will cost the bank
about$25,000 a year. “We look upon
our transportation program not only
as an important new employe benefit,
but also as our firm’s contribution to
the cause of energy conservation.
* * *
The American Institute of Bank­
ing’s Omaha chapter has announced
that several area banks will be
participating in the “Dress a Doll’’
project. The dolls are being
distributed from the Goodfellows in
Council Bluffs and the Salvation
Army in Omaha. Each bank will
dress their doll(s) and the charities
will then give them away at
Christmas to needy children.

Call Toll Free in Nebraska
800-742-7335 or call collect

Steve W. Sutton
Vice President

Bank Programs for Group •
Individual Life • Accident & Sickness



W here BENEFIT is more than a m iddle name
Lincoln, N eb raska 68508

N o rth w e s te rn B an ke r, D e c e m b e r,
Federal Reserve Bank of St. Louis




The National Association of Bank
Women met recently at the Kiewit
Plaza Club Cloud Room. “Stir What
You’ve Got’’ was the topic of Dona
Lauritsen, featured speaker for the
evening. Ms. Lauritsen is with Peter
DeVries & Associates, the sponsor of
the Dale Carnegie courses in
Nebraska and Western Iowa. She is a
certified instructor for that company
in the “Effective Speaking and
Human Relations’’ course, “Custo­
mer Relations’’ course and the
“Personnel Development’’ course.

Jim Flodine, Dor Ostrand, Ralph Peterson, Bob Brown, George McFadden, Merv Aegerter.

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banking to our efficiency experts.
These superb profes­
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first n a tio n a l b a n k

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Federal Reserve Bank of St. Louis

In Nebraska call us toll free at 800-642-9907. Outside Nebraska call us toll free at
800-228-9633. Member FDIC.

Association, and Omaha Federal
Savings & Loan Association, re­
quires approval by the Federal Home
Loan Bank Board and is expected to
be completed by July 1, 1981.
The merged association is to be
named American Charter Federal
Savings & Loan, with headquarters
in Lincoln and more than 40 offices in

The National Bank of Commerce
has announced plans to construct the
largest auto-bank in Lincoln with
seven drive-in lanes at the corner of
66th & 0 Streets in the new East Park
Plaza Shopping Center.
James F. Nissen, president of
National Bank of Commerce said the
decision to construct the facility was
reached after exhaustive study of
NBC’s existing and potential cus­
tomers, taking into account thenneeds and the variety of alternatives
available to serve them efficiently,
economically and conveniently.
This proposed facility, he said, will
employ the latest technology in
electronic banking as well as provide
maximum convenience for customers
who can remain in their cars and
conduct their banking business with
a minimum of delay, day or night.
As part of the decision to construct
the facility at 66th & 0, which will be
known as NBC East Park, Mr.
Nissen said present state banking law
requires that NBC close its Patio
office at 10th & 0 Streets. He
emphasized the closure of the Patio
would not be done without providing
for the needs of the customers served
by that facility.

The Patio, he said, will also be
equipped with the latest electronic
banking equipm ent so routine
banking transactions, deposits and
withdrawals, can continue to be
carried out at the same location. An
automatic teller machine with card
operated night depository will be
located at the Patio in the very near
future. Shortly after that, he said, a
fully automated drive-up teller would
be installed.
In addition, the Rampark drive-up
and walk-in banking facility located
only three blocks away is now being
remodelled to equip it to handle
banking transactions in a most
efficient and convenient manner.
Current plans are to have the 66th
& 0 office open in early 1981.
* * *
Three federally chartered savings
and loan associations said they plan
to merge into an association with
assets of more then $1 billion, which
would be the state’s second largest
financial institution.
The plan by State Federal Savings
& Loan A ssociation, Beatrice;
Nebraska Federal Savings & Loan

me teitmwFs nd? east pmk ofeke
mvmbsv 14, i m

ARCHITECT’S drawing of National Bank of Commerce’s new auto-bank with seven drive-in

N o rth w e s te rn B en ke r, D e c e m b e r,
Federal Reserve Bank of St. Louis




Charles J. Burmeister, president of
First Mid America, has announced
the election of
Michael J. Rea­
dy to vice president/real estate
departm ent of
th e
L in c o ln
b a se d in v e s t­
ment firm. The
election will be­
come effective
pending regula­
tory approval. Mr. Ready assumed
responsibilities for all the firm’s real
estate related activities on September
15, 1980, when he joined First Mid
Mr. Ready is a member of the
Society of Real Estate Appraisers
and is a licensed real estate broker
and member of the Lincoln Board of
Realtors. He has served as president
of the Nebraska Society of Real
Estate Appraisers, immediate past
president of the Nebraska Mortgage
Association and is a former member
of the board of directors of the
Lincoln Home Builders Association.
Prior to joining First Mid America,
Mr. Ready was vice president/manager of the commercial loan depart­
ment of Commercial Federal Savings
& Loan Association of Omaha. His
affiliation with Commercial Federal
Savings & Loan Association of
Omaha. His affiliation with Commer­
cial Federal began in 1975 with
the merger of Union Loan & Savings,
of which he was senior vice president.
* * *

TenMain Center Renamed
CharterBank Center
The 20-story TenMain Center
building at 920 Main in downtown
Ransas City has been renamed
CharterBank Center. The building
was purchased last month by First
National Corporation, the parent
company of 23 Missouri banks.


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Vice President

Vice President



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Assistant Vice President

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Correspondent Bank Officer

Correspondent Bank Officer


Correspondent Bank Officer

13th & M Sts. • P.O. Box 81008 • Lincoln, NE 68501
Phone: (800) 742-7462
Member, F.D.I.C.
Federal Reserve Bank of St. Louis

N o rth w e s te rn B an ke r. D e c e m b e r, 1980


Nebraska N ew s

Ogallala Bank Celebrates Grand Opening

THE First National Bank of Ogallala recently celebrated the grand opening of its new headquarters with an open house and many prizes.

linking the 47-space custom er >
parking lot with the bank.
Entry for the drive-in facility on
Located on the southwest corner of the east side of the structure is off *
headquarters was held recently. More
than 150 prizes were given away, East 2nd and East “A” Streets, the East 2nd Street. Drive-in traffic exits ^
including three “Big Red” football two-story brick structure features onto East “B” Street. There are four
weekends, two 10-speed bicycles, 50 sloping cedar shingleroofing, spa­ lanes for non-commercial customers,
dinner steaks, 50 boneless hams and cious customer walkways and dual in addition to a lane for commercial
entrances. The main entrance is accounts.
50 $5 savings accounts.
located at the southwest corner of the
There is approximately 11,420
On display during the open house block. There is also an entrance on the
were the b an k ’s new savings northeast corner of the building square feet of space on the main floor
with another 9,620 square feet of area
on the second floor, including
~ \ approximately 4,200 square feet of
tenant rental space.
The main floor houses the -—
semi-circular teller stations which are
easily accessible from both the main
entrance and the parking lot, * /
commercial and instalment loan
departments, bookkeeping depart­
ment, safe deposit boxes, drive-in
facilities and 11 offices and the
F is c a l A g e n ts
M u n ic ip a l B o n d s
conference rooms which wrap around
a spacious receptionist and secretari­
L is te d a n d U n lis te d S e c u ritie s
C o rp o ra te B o n d s
al work area.
In addition to the tenant space, the
In v e s tm e n t B a n k in a
G o v e rn m e n t
floor includes an employe
A gency Bonds
lounge and mechanical facilities for
the bank.
The James E. Simon Co. of North
Municipal Bond Department 100 Continental Building
was general contractor and the '
19th & Douglas Omaha, Nebraska 68102
Enersen Partners of Lincoln
Call collect 402-444-1900
were architects.
Bank president is C.R. Hilderbrand
and chairman of the board is
M em ber N ew York Stock Excha nge tnc
house for the new 21,000 square
foot First National Bank of Ogallala

premiums-a variety of solid brass

Serving the M idwest...


First Mid America
and other Principal Stock and Com mo dit y Exchanges


Omaha • Lincoln • Columbus • Grand Island • Hastings • Atlantic •
Cedar Rapids • Des Moines • Fort Dodge • Marshalltown • Chicago •
Kansas City • Wichita


N o rth w e s te rn B an ker, D e c e m b e r,
Federal Reserve Bank of St. Louis




"Accepted Sale Registers by Bank
Clerks Everywhere"
Tor i n f o r m a t i o n write

O akland, Iowa


Let our Vice President of
Investments, Dwaine Stinger,
or Investment Officer Roma
Kroll show you how their
experience can help you get
fast action in handling Federal
funds transactions, money
transfers, security purchases
and sales.

Gaiy Stevenson
Vice President

Doug Schmidt



Correspondent Officer

Choose one of our services or as many as you need:
You get an accurate, efficient system for
obtaining the best availability of your funds to
help increase the profitability of your bank.
You get a full range of loan services including
overline and liquidity loans, assistance with your
ag loans, commercial loans and others.
You get a total program for both Master
Charge and Visa that includes card issuing,
processing, corporate cards, account servicing
and assistance with m erchant calls. And you get
the geographic advantages of being closer to
your Bank Card Center.

You get an entire departm ent of Trust professionals
to assist you in meeting your client’s needs.
You get the speed and efficiency of the Banks
of Iowa computers, plus the most successful
EFTS/Instant Access processor in the territory.
You get our guarantee that whether you need a
specific service, or just an idea or two, First
National is always ready to help.

First National Bank in

MEMBER FDIC • 712-277-1500 • Sioux City, Iowa 51101 • A ‘BANKS OF IOWA’ BANK
Federal Reserve Bank of St. Louis

N o rth w e s te rn B an ke r, D e c e m b e r, 1980


Roger Arwood, Don Carmody, Ben Eilders and Don Jordahl

Let us take a m om ent tram the holiday
festivities to send you our best wishes for a
happy holiday season and a prosperous


If you plan to be in Des Moines — for
some Christmas shopping or any other
reason — be sure to stop in and say hello,
Well be pleased to see you.

“«T ru st
Des Moines’ largest locally owned, independent bank

Seventh and Locust / Des Moines, Iowa 50304 / Member, FDIC

Correspondent Banking, Second Floor, Ruan Center

N o rth w e s te rn B an ke r, D e c e m b e r,
Federal Reserve Bank of St. Louis



IBA Creates Two Special Task Forces
Bankers Association presi­
dent Edw ard L. Tubbs of
aquoketa has announced the

Clarkson Joins ABA
Iowa Bankers Association execu­
tive vice president Neil Milner has
announced the
appointment of
Tom Clarkson as
IBA vice presi­
dent, marketing
and government
Mr. Clarkson
succeeds Mark
Douglas, who re­
cently left the
IBA to assume a
similar position with the New Mexico
Bankers Association.
Mr. Clarkson had served as
director of college relations for the
Des Moines Area Community College
since 1976. Prior to joining DMACC,
he had directed the public relations
function for Hutchinson (Kansas)
Community Junior College and
Sterling College in Sterling, Kan.
In 1976, at age 31, he became the
youngest mayor in the history of
Hutchinson, a city of 42,000 people.
He currently serves on the Carlisle
Planning and Zoning Council and
does extensive professional consul­
ting work for business and education­
al agencies.
Mr. Clarkson began organizational
work at the association immediately.

Rollie Sverdahl, Waterloo;
Dick Buxton, Indianola;
Keith Campbell, Sheldon;
membership of two special task forces Herman Kilpper, Des Moines;
created to study key banking Ken Myers, Des Moines;
industry issues.
Gordon Mennen, LeMars;
Mr. Tubbs, chairman of the Mel Kupka, Traer;
Maquoketa State Bank, had an­ Jim Slavens, Davenport;
nounced at the I BA’s 94th Annual Holmes Foster, Cedar Rapids, and
Convention in September that a Ron Fenton, Marshalltown, (IBA
Structure Task Force and a Capital Board Liaison).
Adequacy Task Force would be
created during his term.
Capital Adequacy Task Force:
Each of the groups will deal with a
specific issue affecting banks across Les Olson, chairman, Sioux City;
the country, and expects to pursue Paul Dunlap, Des Moines;
new developments in these respective Tom Huston, Supt. of Banking;
areas, analyzing and formulating Stan Smith, Rock Rapids;
A1 Duroe, Jesup;
Iowa banking industry positions.
The Capital Adequacy Task Force Rand Petersen, Harlan;
is expected to study all regulations Bob Brenton, Des Moines, and
pertaining to bank capital reserve Tom Dunlap, Slater.
requirements, including capital re­
quirement inequities among banks O. Jay Tomson New Fed Director
due to geographical locations, size of
institutions, holding company own­
Jay Tomson, president, Citi- From 1966 to 1970, he served as vice
ership and state or national bank
■ zens National Bank, Charles president/operations for Bankers
Trust Company, Des Moines. From
The Structure Task Force will City, has been
1970 to 1974, he was executive vice
focus on a soon-to-be-published elected to the
of Marquette National
White House paper outlining recom­
mendations on financial institution
In 1974, Mr. Tomson purchased
structure, with particular emphasis of the Federal
Citizens National Bank, Charles
on federal legislation limiting bank
where he serves as president
holding company acquisitions. This
today. He is also chairman of the
group is also expected to be term begins in
Kanabec State Bank, Mora, Minne­
somewhat flexible in its focus, Jan u ary , 1981,
sota, where he owns controlling
dealing with current legislative and
period of three
regulatory issues as they arise.
Mr. Tomson is a past president of
The Iowa Bankers Association is years. Class A
Iowa Independent Bankers and a
one of the Iowa’s largest trade
member of the executive
associations, representing the inter­
ests of the state’s commercial Tomson succeeds John F. Spies, committee of the ABA’s commercial
president, Iowa Trust and Savings lending division. Currently, he is
banking institutions.
chairman of Group III of the Iowa
Task Force membership list Bank, Emmetsburg.
A graduate of St. Olaf College, Bankers Association and president of
Northfield, Minnesota, Mr. Tomson the Iowa Transfer System. He also
has had a distinguished banking serves as a current member of the
Structure Task Force:
career. Starting as an assistant ABA’s Committee for Bank Opera­
Earl Underbrink, chairman, Ft. national banking examiner in Minne­ tions and Automation. He is a
apolis in 1958, he advanced to an graduate of the Iowa Agricultural
John Chrystal, Coon Rapids;
examiner of the Federal Reserve Credit School and the Stonier
Bruce Meriwether, Dubuque;
Bank of Chicago from 1960 to 1965. Graduate School of Banking.

Federal Reserve Bank of St. Louis

N o rth w e s te rn B an ke r, D e c e m b e r, 1980


Io w a N ew s

Gateway State Bank Opens in Clinton

INTERIOR of new Gateway State Bank in Clinton, la., preserves the “ homey” flavor of 76-year old hotel marble lobby. New drive-up office
is pictured with front of bank building at right.

EARLY 3,000 people visited the
new headquarters of Gateway
State Bank in Clinton during two

move the charter and change the

open houses when that bank officially
opened its new offices in that city.
Gateway State Bank previously was
known as Goose Lake Savings Bank,
located 13 miles from Clinton.
Permission was obtained from the
state superintendent of banking to

The bank in Clinton is located on
the ground floor of a five-story
historical structure erected in 1904
by business interests and operated
for many years as The Lafayette
Hotel. It has been converted to a
condominium with 93 apartments,


f o




t e


t e


o s io



^H / ^



" W

H * » * *
2 S g ?
i3, 9)î3A-465'

N o rth w e s te rn B an ker, D e c e m b e r,
Federal Reserve Bank of St. Louis


with the bank owning the first floor,
basement storage and the roof,
according to Robert C. Wede,
president. In addition, title was
obtained to a half-block of adjoining
land on which Gateway State has
constructed its new drive-in bank.
At the first open house, 215
bankers and their wives toured the
new facility which incorporates the
elegance of the marble floors and
walls into the main bank lobby. The
Community room, or “Oak Room’’ as
it has always been called by local
residents, has been refurbished and
continues to feature its huge marble
fireplace and oak panelled walls. Mr.
Wede said the bank architect and
contractor crew restored and pre­
served all other unusual features of
the old building, as well.
The general public open house
attracted 2,700 people. The bank
contributed 50 cents per individual
that registered to the church of their
choice and then drew six grand prize
winners for these prizes: one Weber
gas grill, 100 gallons of gasoline, 1
Berkline Wall Away Recliner, 100
gallons of gasoline, two Goodyear
snow tires and one Toro S-200
Electric Start Snowblower.
Mr. Wede continues to make his
home in Goose Lake and manage the
original bank office there. Cashier
Roger Reilly is manager of the new
headquarters office in Clinton. Other
officers there are Robert F. Kabrick,
vice president-loans, and Carole
Eberhart, assistant cashier. Wayne
Williams, vice president, continues
to manage the office in Charlotte, a
nearby community. Gateway State
Bank has $10,500,000 deposits, Mr.
Wede stated.

W e've got
dent Banking
in the bag.

W hether you need over-line loan
participation, help w ith collec­
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folios, you can depend on getting it from Am erican
T rust, y o u r full-service correspondent bank.
You can also count on Bernie M iller, our co r­
respondent banker, for a full range of Federal
Reserve System services: inexpensive
and easy procurem ent of currency
and silver, direct deposits of Federal
checks through an A utom atic

Clearing House, and dom estic and
foreign wire transfer of funds.
In addition, our Trust D epartm ent backs up
Bernie w ith trust services to enable you to establish
your ow n bank pension plan, profit-sharing plan
and a w ealth of other inflation-fighting program s.
You m ay even wish to offer these same services to
y our ow n custom ers. To find out how easily you
can provide m ore services, call Bernie today at


Trust Cr Savings Danl^

The Danl^qf Opportunity
Town Clock Plaza Dubuque, Iowa 52001
Phone: 319/582-1841
M em ber F.D.I.C. & F.R.S.
Federal Reserve Bank of St. Louis

"More banks are
offering their customers
more services
thanks to the help
they're getting from
American Trust. ''


ance coverages designed for the
security package; the characteristics
of the underlying mortgages, and the
investor yields.
To received a free copy of the book­
let, contact: MGIC Mortgage Mar­
keting Corporation, MGIC Plaza,
NEW booklet describing the in­ P.O. Box 488, Milwaukee, Wis.
vestment opportunity of mort­ 53201.
gage-backed pass-through certifi­
cates pooled from multiple mortgage
HE Mosler Safe Company an­
lenders is available from MGIC
nounces its new American Dual
Mortgage Marketing Corporation, or Depository. The American Dual pro­
“Maggie Mae.”
vides U.L. listed security against
Entitled “Maggie Mae: Investing fishing and trapping, and protects
Profitably and Safely in Mortgage against improper use by depositors.
Pass-Through Certificates,” the 10- Listed by Underwriters’ Labora­
page booklet charts the process of tories, Inc., Mosler’s new depository
pooling mortgages through “con­ has a convenient single bag and
duit” organizations.
envelope hopper with a clearly ident­
Patterned after Ginnie Mae certif­ ified “deposit” handle. The hopper
icates, Maggie Mae securities gather has jam-proof, cycle controlled ram
mortgages from multiple mortgage ejection and interlocking ribs.
lenders into pools of $25 million or
The American Dual Depository has
more. The investor receives a double- an illuminated “depository” sign
A rated security with the high current which is visible day and night, and its
return of mortgage rates but without stainless steel construction provides
the burden of monitoring individual easy maintenance. Its compact de­
sign saves space and allows for in­
The booklet details how the mort­ stallation in thinner walls, the use of
gage pools are assembled; the insur­ minimum chute lengths and larger re-


What’s New





For Northwestern’s

An Affiliate òf Northwest Bano

N o rth w e s te rn B an ke r, D e c e m b e r,
Federal Reserve Bank of St. Louis


ceiving safes in first floor installa­
Charles H. Beck Retires
Charles H. Beck, executive vice
president and cashier of the Iowa
State Bank, Morning Sun, has
retired after 40 years in banking.
Over 500 area residents attended
an open house in Mr. Beck’s honor.
He continues to live in Morning Sun.


“The Drovers Difference”
starts here.

wes on"meTop

I tUANl 7 $

fLOCR you can't
• • •


P R E S ID E N T .
W hen you co rresp o n d with
D rovers you have a direct
line to the full senior m an­
agem ent team . Starting with
P resident F rank B auder,
Sr. Executive Vice P resi­
d ent Jim C arm ody, and
Executive Vice President
Bob C orey.
T hey’re backed up by
som e of the best c o rre s­
p o ndent b ankers in the
business. People like
Jo h n C rotty, M ax Roy,
Andy R um ents and
K athy H ardy.


U r ft

D rovers people a r e “The D rovers
D ifference.” T hey’re the reaso n
the b an k ’s co rresp o n d en t
acco u n ts have just about doubled
in un d er two years.
So if you’re looking for m ore
service with your services . . .
Put us to the test! J u st pick
up the phone and call Frank,
Jim, Bob, Jo h n , M ax, Andy
or Kathy.
You deserve “The
D rovers D ifference.”

Member Federal Reserve System

Drovers Bank of Chicago
47th Street & Ashland Avenue, C hicago, IL 60609
Federal Reserve Bank of St. Louis

(312) 927-7000

N o rth w e s te rn B an ker, D e c e m b e r, 1980


Io w a N ew s

W ere interested in making
profitable investments.
For you.

t Security Bank we’re peoL pie with an interest in
your success. People you can
turn to for investment service
and all your correspondent
banking needs.
Security people are expe­
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Start corresponding with
Security. For investment serv­
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Security Correspondent Bankers
Top to Bottom
Jim Hongslo
Steve Hatz
Ken Roeder
Wilma Weeks
Jim Young

Western Iowa’s Largest

7 1 2 / 277-6554


© 1980 Security National Bank

N o rth w e s te rn B an ke r, D e c e m b e r,
Federal Reserve Bank of St. Louis


Iowa Bank Changes
The following changes took place in
Iowa state chartered banks recently:
Common stock at Goose Lake
Bank increased from
$100,000 to $185,900 by means of a
sale of 859 shares at $698.50 per
Common stock at Kiron State
Bank increased from $150,000 to
$300,000 by means of sale of 1,000
shares at $300 per share.
Common stock at Templeton
Savings Bank increased by transfer
of $75,000 from undivided profits by
means of stock dividend to total of
$150,000 from $75,000.
Also, an application was received
from the Dubuque Bank & Trust Co.
to establish a bank office at Peosta.

Elected at Sioux City
Timothy J. Coughlon has been
elected senior vice president of lend­
ing for North.
western Nation­
al Bank of Sioux
City. Northwest­
ern P re s id e n t
Evans announ­
ced the selection
of Mr. Coughlon
for the newlycreated position
designed to coor­
dinate bank loan activities in all
categories—instalment, commercial
and real estate.
Mr. Coughlon comes to Sioux City
from Minneapolis where he has been a
member of the loan administration
division of Northwestern Bancorporation, with which the local bank is
affiliated. Mr. Coughlon has been
associated with the Banco organiza­
tion since his graduation from the
University of South Dakota, first at
Mason City, and subsequently at
Billings, Mont.

Named at Rockwell City
Joe E . Hutchinson has been named
president of the Union State Bank of
Rockwell City. Mr. Hutchinson is
presently senior vice president of the
Laurens State Bank, where he has
been employed for 13 years. Mr.
Hutchinson replaces Byron Martz,
who becomes co-chairman of the
board of directors.

Tough words when
they com e from one of
your best people.
But Iowa Bankers
Insurance & Services
(IBIS) can help you m ake
it hard for good employees
to leave.
With a com plete port­
folio of top-flight employee
insurance plans tailorm ade for Iowa Bankers.
Two Health Plans
with options to add Dental

and Vision Care. High
limits Group Life Coverage
with options for Short
and Long Term Disability
— and now, Retired
Lives Reserve!
The kind of banker
benefit package that will

cost your people a lot in
peace of mind and money
to walk away from.
And the kind that
will m ake it easy for pro­
spective employees to
say “1 quit!” to their
present employers.
Like to know m ore?
Call Margie Schaefer or
Millie Uding toll free
1-800-532-1423. They’ll
quit whatever they are
doing to help.

4 3 0 Liberty Building, D es Moines, Iowa 5 0 3 0 8

Providing insurance protection just to banks
Federal Reserve Bank of St. Louis

graduated from Western Iowa Tech
with an associate degree in accoun­
Dean Conrad has been elected
assistant cashier. Mr. Conrad is a
graduate of Iowa State University,
Ames, with a major in agricultural
business. For the past two years, he
has been an agricultural loan officer
at the First National Bank of
Worthington, Minn.

Kenneth M. Myers, president and
chief executive officer, announced the
following officer changes at Central
N ational Bancshares: Anne C.
Larson has been elected assistant
controller, Marcene Twidt has been
elected assistant auditor and Charles
W. Newman has been promoted to
financial information officer.
Ms. Larson was born in Fort
Dodge, attended Iowa Central
Community College in Fort Dodge,
graduated from Drake University in
Des Moines with a BSBA degree in
May, 1977, an MBA degree from
Drake in August, 1980 and passed
the Certified Public Accountant
examination in November, 1978. She
previously was employed as an
auditor with Arthur Young & Co.,
Des Moines and with Wilbur R. Rose,
CPA, Des Moines.
Ms. Twidt was born in Adair,
graduated from Iowa State Universi­
ty, Ames, with a BS in Industrial
Administration with an accounting
major and passed the Certified
Internal Auditor examination in
May, 1980. She previously was
employed as an internal auditor with
a Des Moines bank holding company.
Mr. Newman was born in Clarion,
attended Iowa Central Community
College, Fort Dodge, and received a
BS degree in Industrial Administra­
tion from Iowa State University,
Ames, in May, 1975. He previously
was employed as an accountant with

the holding company’s Fort Dodge
subsidiary, Union Trust & Savings
Bank and joined Bancshares in
October, 1979, as m anagement
accountant in the Financial Informa­
tion division of the company.
Elected at Remson
The following personnel changes
have been announced at the First
Trust and Savings Bank in Remson:
Thomas J. Bohnenkamp has been
elected vice president of the board.
Mr. Bohnenkamp has been g director
of the bank since 1965, and is engaged
in farming.
David Augustine joined the staff
as an officer trainee. Mr. Augustine

Promoted at Marshalltown
Paul Lindaman, assistant cashier
at Commercial S tate Bank of
Marshalltown, has been promoted to
loan officer at the mall office of the
bank, according to George Taylor,
president. Mr. Lindman attended
Buena Vista College, Storm Lake,
and graduated in 1977 with a degree
in business administration. He has
worked at Farmer’s Savings Bank,
Grundy Center, and joined the
Commercial State Bank in 1977.
Appointed President
Harold J . Abdo has been appointed
president of Security State Trust and
Savings Bank of Bettendorf, William
J. Callahan, chairman of the board,
has announced. Mr. Abdo, formerly
executive vice president, has been
with Security State since 1973. A
former bank examiner with the
Federal Deposit Insurance Corp.,
Mr. Abdo is a graduate of the
University of Northern Iowa.

Security Holds Grand Opening in Sioux City

THE Security National Bank of Sioux City recently held the grand opening festivities for its
new Morningside Branch. The week long celebration included a ribbon cutting ceremony
which was attended by various city and bank officials. A 20-foot ribbon made out of $2 bills
was presented toTerry Mack, theexecutivedirectorof Junior Achievement, by Lois Boone,
Morningside branch manager. The new $600,000, 3,800 square feet facility offers a full
range of financial services, including five drive-up lanes, a Security 24 money machine,
night depository and safe-deposit boxes.

N o rth w e s te rn B an ker, D e c e m b e r,
Federal Reserve Bank of St. Louis



uNo Santa Claus!
Thank God, he lives,
and he lives
thousand years from now,
Virginia, nay,
ten times ten thousand
years from now,
he will continue
to make glad the heart
of childhood’.’

—Francis P. Church, from an
editorial "Is There a Santa
Claus?” first published in
The New York Sun,
September 21, 1897 in reply
to an inquiry from
Virginia O’Hanlon.

Central National Bank & Trust Com pany
Federal Reserve Bank of St. Louis

N o rth w e s te rn B an ke r, D e c e m b e r, 1980


Io w a New s

Over 200 Attend Correspondent Conference

OVER 200 BANKERS attended a one-day correspondent conference held by Central National Bank and Trust Company, Des Moines,
recently. Shown at left are: W.D. “Bill” Bunten, sr. exec, v.p.; Raymond G. Johnston, pres., and Kenneth M. Myers, chmn., all from host
bank. At right are: Larry Glass, sr. computer services officer, and Eddie Wolf, sr. vice pres./head of correspondent dept., both of whom
participated in the program. Topics addressed included Regulation D, Fed pricing, N.O.W. accounts, and bank computer processing. Mr.
Myers addresed the challenges facing banks in the 80’s, and his comments appear in the feature section of this issue

Menges Named President
James L. Menges has been
appointed president and chief
executive officer of First National
Bank of Clinton, effective January 1.
The announcement was made by
Hawkeye Bancorporation.
Mr. Menges currently is president



4015 Alexandra Drive
Waterloo, Iowa 50702
Phone 310/234-6641
Ask for Dick or Jerry

N o rth
e s te rn B an ker, D e c e m b e r,
Federal Reserve Bank of St. Louis


of American State Bank of Mason
City, a Hawkeye Bancorporation
affiliate. He has held that post the
last six years. Earlier he had been
employed 17 years as vice president
and cashier of Jasper County Savings
Bank in Newton.
A Grinnell native, Mr. Menges
attended the University of Iowa and

is a graduate of the Graduate School
of Banking in Madison, Wis.
It also was announced that George
Meyer, First National vice president,
will succeed Mr. Menges in the
Mason City bank. He joined First
National in September, 1978. Prior to
that he had been vice president of the
Council Bluffs Savings Bank. He
assumes the new post January 1.


Kirk Gross Co. has an outstanding
record for designing and/or remodeling
financial institutions in Iowa. At last
count, more than 130 since January,
1971! Best part of this unequaled
record is that so many are repeat,
satisfied customers. We take the
responsibility and worry of building or
remodeling off your shoulders and put
it in the professional hands of our
designers and planners. And you get a
Turn Key program. If you’re thinking
about a new facility, but you haven’t
talked to Kirk Gross Co., do it now. Our
old friends do it every day!

Acorn Printing Co................................................. 58,68
American National Bank, Chicago ......................... 44
American National Bank, St. Paul .......................... 43
American Trust &Savings Bank, Dubuque ........... 67
Banco Financial/Lease Northwest ......................... 39
BankersTrustCompany, Des Moines ..................... 64
Carroll, McEntee&McGInley .................................... 9
Central National Bank &Trust, Des Moines ........... 73
Chilton Corporation ................................................. 7
Continental Bank, Chicago .................................... 11
Control-o-Fax ......................................................... 66
Dean Witter Reynolds, Omaha ................................ 16
Deluxe Check Printers, Inc.......................................... 3
Denver National Bank ............................................. 55
Drovers Bank of Chicago ........................................ 69
First MidAmericaInc................................................. 62
First National Bank, Denver .................................... 53
First National Bank, Lincoln .................................. 61
First National Bank, Minneapolis ..................... 36-37
First National Bank, Omaha .................................... 59
First National Bank, Saint Paul .............................. 18
First National Bank, Saint Paul (Bonds) ................. 75
First National Bank, Sioux City .............................. 63
Gross Co., Kirk ....................................................... 74
Harris Bank, Chicago ............................................. 15
Iowa Bankers Insurance &Services ......................... 71
lowa-Des Moines National Bank ............................ 76
Kooker, E.F. Associates .......................................... 72
Lincoln Benefit Life Ins. Co....................................... 58
Marquette National Bank, Minneapolis ............. 40-41
Merchants National Bank, Cedar Rapids ............... 2
Midland National Bank, Minneapolis ..................... 35
National Bank of Commerce, Lincoln ..................... 56
Northwestern National Bank, Minneapolis ........... 32
Northwestern Nat’l. Bk., Sioux City ........................ 68
Security National Bank, Sioux City ........................ 70
United Bank of Denver ............................................. 17
United States National Bank, Omaha ................... 4-5
VanWagenenCo., G. D.............................................. 8

^ •v '

You’re looking at 36
ways to sim plify your
investment choices.
If you’re looking for the right in­
vestm en t in a rapidly changing
market, talk to the people at First
Bank Saint Paul.
Our Investment Services Group
has 36 full-time professionals ready
to help you with the most sophisti­
cated tools available.
They will be able to show you the
largest inventory of municipal bonds
in this region, plus a wide variety of
government securities, repurchase
agreements, commercial paper and
other money market items. Then help
you ta ilo r a program to fit your
specific investment objectives.
We can also provide safe-keeping
for all securities and give you a
monthly computer report on your
portfolio’s performance.
For more information, call the In­
vestment Services Group at First
Bank Saint Paul, 291-5659. One of our
Investment Counselors will be glad to
talk with you about your investment

First Bank
Saint Paul
Investment Services Group
The First National Bank of Saint Paul
332 Minnesota Street
Saint Paul, Minnesota (612) 291-5659

A Full Service Bank
Federal Reserve Bank of St. Louis

Member FDIC

Barb Estey
Investment Officer

Lynn Horak
Group Vice President
Investment Services

Charlotte Heaberlin
Money Market Specialist

Rita Pirrello
Money Market Specialist

Dick Pedersen
Vice President & Manager
Funds M anagement Services

Of course, we have always offered funds
management and investment services. But
we think our new approach — a separate,
full time department — will be of even
greater benefit to banks and corporations
trying to cope with today’s fast-changing money markets.

The Iowa-Des Moines now has a FUNDS
with experts working full time to help you
make the most of your money in short
term investments.
These people combine know-how with
up-to-the-minute money market information
to handle Fed Funds, Repurchase Agree­
ments, Commercial Paper, Negotiable CD’s,
Bankers Acceptances and other money
market investments.

Give us a call — you’ll get a lot of help f
your money.


M r




Y ou can g e t a lo t o f help for your m oney.
7th & Walnut, Des Moines, Iowa 50304 (515) 245-3131 or toll-free (800) 362-2514

1980 lo ^-D e s Moines National Bank
Federal Reserve Bank of St. Louis

Member FDIC

An Affiliate of Northwest Bancorporation