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Vol. 3 No. 83 Des Moines, Iowa December 2, 1974 Guidelines for Evaluating Bank Stocks Should bank stocks be consid ered growth vehicles? George L. Hacker, senior vice president and director of Blythe, Eastman Dillon & Co., Incorpo rated, addressed a meeting of the Association of Registered Bank Holding Companies in Chicago recently on this vital subject. Here are his comments: “ Bank stocks are equity securi ties and the general rules of analysis to determine grow th stocks apply equally to bank stocks. Moreover, the concept of book value is secondary to earning power, and one should use the income statement rather than the balance sheet as a test o f profitability and as the basis for forecasting prices. “ Also, a company’s anticipated earnings greatly influence the market price.” Mr. Hacker explained that the concept of paying premium multi ples for companies able to achieve above-average growth is not new to industrial securities. And those characteristics common to industri al securities commanding premium multiples are: 1. Dominate the market 2. Control over pricing 3. Readily understood concept of growth 4. A b o v e -a v e r a g e e a rn in g s growth 5. Consistent earnings growth 6. Superior management 7. Minimal capital requirements In applying these characteristics to bank stocks, Mr. Hacker says, “ items 1 and 2 are most difficult for any bank to achieve. Given the nature of the banking business, the regulatory authorities prevent any one bank from dominating the industry. While a bank cannot be price dominant, in our opinion, there are price leaders developing as well as innovators.” He mentioned consistency of quarterly results as an important factor in the marketplace, for it reflects that the managem ent knows how to control earnings. “ Those banks which are able to provide for future growth of equity through internally generated funds are very much at an advantage. This can be arrived at by obtaining a high return on assets and a concomitant lowering of the payout ratio.” He concluded that no bank can fulfill all of these requirements, but that those banks coming closest will obtain the most institutional support and have the highest P /E s in the industry. He emphasized the need of management to communicate prob lems to the investment community to indicate that they are aware of their problems and are keeping on top of them. “ Better information will have to be developed about the scheduled maturities of certificates of depos its, stability of categories of deposits at various stages of the economic cycle, and cash flow available from the asset structure. “ In this scenario, we believe the banks classified as market leaders will move with the industrial market stalwarts. Banks which are “ fallen angels” or those trying to earn their wings may move up initially, but a waiting period will develop wherein the marketplace will take a ‘ show me’ attitude.” Comptroller Sends New Regulation to Register Comptroller of the Currency James E. Smith recently sent to the Federal Register a new regulation, requiring every director or principal officer of a national bank to maintain at his bank a current (Turn to back page,'please) CALL ON THE “PERFORMANCE TEAM ” where common transactions are handled uncomm only well. IIIIÜHII 1 FIRST NATIONAL LINCOLN 13th & M Street • Lincoln, Nebraska 68501 • Member, F.D.I.C. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NATIONAL BANK in S iou x C ity Gary Stevenson, Vice President Doug VanMeeteren, Correspondent Rep. Improve your bottom line with our Correspondent Services from First National where your customers are our concern, too. Together; w e have a lot to share Iowa News CORNING: Mr. and Mrs. Ivan Heaton, president, Bank of Brooks, observed their Golden Wedding Anniversary this past week. DECORAH: Funeral services were held recently for Olaf J. Hanson, retired D ecorah banker. M r. Hanson retired in 1967 after having been associated with Security Trust and Savings for 30 years. DES M O IN E S: Don Rainer, assistant vice president and ag rep for Bankers Trust Company, is recuperating at home following several weeks of hospital treatment for leg blood clots. He will be at home—920 Green St., Adel, la. 50003—for another two or three weeks. L A M O N T : C onstruction began recently on an addition to the Farmers State Bank. MAQUOKETA: Peter Bezanson, president of the Jackson State Bank and Trust Co., has been named chairman. He succeeds Judge Arthur Janssen who re signed. WEST BRANCH: The officers and directors of the West Branch State Bank will hold an open house in their new banking quarters on Monday, Dec. 9, from 5:30 until 8 p.m., according to L. C. Rummells, bank president. W EBSTER CITY: Mary Ellen Wilcox has joined the Farmers National Bank. Nebraska News BELLEVUE: James P. Barker, a Bank of Bellevue employee since 1971, has been promoted to vice president of the loan department. He previously was assistant vice president, loan department. BRAIN ARD: Open house was held November 30 by the Bank of Brainard in its newly remodeled quarters. EAGLE: Formal open house will be held in the newly-chartered Eagle State Bank on December 6. The bank opened for business in early November. G R A N D IS L A N D : The F irst National Bank has announced the promotion of Earl Merritt to manager of the Conestoga Mall Motor Bank. K E A R N E Y : H arold O ldfather, POSITION A V A ILA B LE SERVICE WITH NO SMILE. All our computer knows how to do is work. Quickly. Efficiently. But no smile. Bill Rickert and Ken Young are the ones who smile. Especially when they’re showing somebody how our straightfaced computer works. Call Bill or Ken today. St Need experienced loan officer, prefer ably farm background; make customer calls. Bank of $5-$10MM deposits. Write Box TLI, c / o NORTHW ESTERN BANKER, 306 15th Street, Des Moines, Iowa 50309. Waterloo OMAHA: Donald J. Murphy, president of Northwestern National Bank, has announced the election of Edward A. Kohout, senior vice president, to the bank’s board. Six other promotions were also an nounced: Paul A. Mauer, assistant vice president, promoted to vice president; John J. K rajicek, personal banking officer, to assis tant vice president, and Mary B. Brown, trust operations officer, to assistant vice president and trust officer. New officers elected are Thomas O. Schirber, instalment banking officer; John R. Miller, personal banking officer and Carol Stump, operations officer. W. Beryle Lantz joined the bank as an agricultural representative. Minnesota News AUSTIN: William L. Weidner has been named vice president and director of the Sterling State Bank. He will also retain his present position as cashier of the bank. Mr. Weidner has been with the bank since November of 1970. M ARSH ALL: Western State Bank has increased its capital stock from $600,000 to $900,000 by stock dividend. MINNEAPOLIS: Adrian O. McLellan has been elected executive vice president and a director of First Bank System. Mr. McLellan will resign his post as president and trust officer of First National Bank in Great Falls, Mont., to assume his new responsibilities for admini stration of the 85 bank group. No Were in our new home at Seventh and Walnut. Stop in and visit us soon. Iowa-Des M oines National Bank M 1-800-772-2015 Digitized for National FRASER Bank of https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis chairman of the First National Bank, announces the election of Richard M. Fritz as president and director, effective January 1. Mr. Fritz currently is vice president marketing at National Bank of Commerce, Lincoln. Previously, he held a sim ilar position with H awkeye B ancorporation , Des Moines-based, multi-bank holding company. First National, Kearney, is affiliated with National Bank of Commerce. Dwayne Smith MEMBER FEDERAL DEPOSIT INSURANCE CORPORATION *-4 fr * 4 $&■ r**i -MoiwiyWisje IS the bank-oriented newsletter that talks money matters and develops "bankwise" customers IS a marketing tool that helps sell, resell, and crosssell the full service bank IS an exclusive service that may be fed into a "bank package" to help maintain momentum IS a personalized medium of communication — wheth er your VIP list is 100 or 100,000 you make the final selection fr - h fr* »n s T 'Y YX one fr fr Market Test — The 200 Way fr ■< •V A J* To help your bank evaluate MoneyWise in your market area just fo r the cost of postage return this coupon, write, or phone. 4 •* * fr ' 4 Please send us samples of MoneyWise and information concerning The 200 Way Market Test program. I understand there is no obligation. Mfr -4 Name & T itle -------------------------------------------------------------------- $h Bank Name__________________________________________ Tow n_____________________ State__________Z i p ------------ 4r4 4 4 BANKV« ! L 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis i y Champaign” f 61820 Earl F. Crouse, President (217) 356-1339 ■0 + > 0 -H." A) A'-Aî Y/T T'f' Hfl BankVertisÏngI 4 V C O M P A N Y !.^ !/ 13 0 0 Hagan St. Champaign, IL 6 1 8 2 0 'b Y> YrY; U m MV ■V. ^ 0 # > K K- M 0 M 00 0 0 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 5 Ben Eilders. Senior Vice President wants to build a solid correspondent banking relationship with you. I B a n k e rs T ru st 6th & Locust/ Des Moines, Iowa 50309 Use our toll free WATS line: 800-362-1688 > successor at Great Falls has yet been named. M O R R IS : Citizens Bank has increased its capital stock from $200,000 to $250,000 by stock dividend. ST. PAUL: Commercial State Bank has increased its capital stock from $900,000 to $1,002,000 by sale of new stock. Illinois News TV CHICAGO: Samuel Wm. Sax, chairman and chief executive officer of Exchange National Bank, has announced the election of the follow in g four bank officers: Thomas P. Marrazzo, vice presi dent, department of the comptrol ler; Michael J. Mascheri, assistant vice president, loan review depart ment; John J. Farrell, assistant cashier, department of the cashier, and John D. Hill, assistant cashier, executive department. North Dakota News BISMARCK: The Industrial Com mission has appointed John W. Fay, assistant vice president of the Bank of North Dakota, as acting head of the securities department of the bank. Mr. Fay joined the bank in January of 1972 and was in charge of the agriculture loan department. V-« A A -Jk * -4 MOORHEAD: Roger N. Tjosaas has been appointed assistant vice president in the instalment loan A good correspondent bank relationship is still built by good people. Yours and ours. Terry Martin Vice President https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis department of the American State Bank. Timothy J. Powers has been named assistant cashier and instalment loan officer. South Dakota News ABERDEEN: The following two promotions have been announced by C. P. (Buck) Moore, president of the First National Bank: L. Rick Kolkman, elected personal banking officer, and Michael E. Swanton, promoted to marketing officer. MITCHELL: The Mitchell Nation al Bank, by stockholder action, recently increased its common capital stock to $1 million from $400,000, by stock dividend. The surplus account also was increased to $1 million. The bank also elected two men to new positions: Don Bowar, auditor, and John Patton, assistant cashier. Colorado News DENVER: United Banks of Colo rado, Inc., has announced that the names of two recently acquired banks have been changed. The former Broomfield Bank is now United Bank of Broomfield and the form er First State Bank o f Fountain in now United Bank of Fountain. DENVER: W. Richard Scarlett has been elected president and chief executive officer of Cherry Creek National Bank, replacing Weldon B. Hamilton, who has become chairman. Munro L. Lyeth, who Call me toll free . . . 800 332-5991 GIVE TO CHRISTMAS SEALS. ITS A MATTER O F LIFE AN D BREATH. Fight Lung Disease ■ Fight emphysema, tuberculosis, air pollution Space contributed by the publisher as a public service. was chairman, has become honora ry chairman. DENVER: Wendy Dewitt Wimbush has been appointed research and planning officer for Affiliated Bankshares of Colorado, Inc. Most recently Ms. Wimbush was manag er of marketing coordination with the Harris Bank in Chicago. DENVER: Central Bank & Trust Co. has announced the election of two officers as executive vice presidents and the formation of a five-member executive manage- BETTER TALK TO A DROVERS MAN FRED C U M M IN G S B E R N IE M ILLER ED R IE T Z RAY FENCL - At The Most Experienced Agricultural Financial Center In Chicago. P H O N E (312) 927-7000 Merchants A National Bank 151 C edar Rapids. Iowa 52401 A B A N K S O F IO W A 'B A N K THE DROVERS NATIONAL BANK OF CHICAGO 47th and Ashland Ave. Chicago, III. 60609 Member F.D.I.C. 6 Tw o of our men on your side at ment committee for the bank. Named executive vice presidents are Joseph R. Lincoln, former senior vice president and resident counsel, and George G. Patterson, form er vice president, human resources division. The two men join Don Hoffman, president; Max Brooks, chairman, and R. J. Nelson, executive vice president, to make up the executive management committee. M aybe you should take afresh look at things. Call and ask for Gene, Ed or Jim in our Banks and Bankers Division. Comptroller....................................... (Continued from Page 1) written statement of the director’s or o ffic e r’ s business interests outside the bank and of any relationships between those inter ests and the bank. These state ments will be available for review by the Comptroller’s national bank examiners and by the bank’s directors, senior loan officers, auditors and attorneys. W AN T ADS R a te s 35 c e n t s per word per insertion. Minimum: 12 words POSITION A V A ILA B LE Northern Wyoming area; experienced, m otivated ag. loan representative. Salary open. Send complete resume. Write Box PAW, c/o NORTHWEST ERN BANKER, 306 15th St., Des Moines, Iowa 50309. POSITION A V A IL A B L E Eastern Iowa bank has opening for farm loan officer. Prefer agri-banking experi ence. Write Box DJI, c /o NORTH WESTERN BANKER, 306 15th Street, Des Moines, Iowa 50309. 712277-6517 SERVING PROFESSIONALLY Security National Bank 6th & Pierce Street, Sioux City, Iowa Downtown • Mormngs'cif; • Lof.-ds Member F D I C When you need a little help call us on our toll free wats number 8 0 0 -3 6 2 -1 6 1 5 Banking, Financial & Business Personnel Iowa and Nationwide CAPITAL PERSONNEL SERVICE 20 4 Securities Bldg. 5 1 5 — 283-2545 Des Moines, Iowa 5 0 30 9 POSITION A V A IL A B L E Insurance man to operate and manage bank insurance agency in northwest Iowa. Write Box KCC, c /o NORTH WESTERN BANKER, 306 15th Street, Des Moines, Iowa 50309. FOR SALE Bell and Howell Microfilm Recorder and E n dorser— 1972—Model D irector-I, Series 505A. Excellent condition. Write Box 428, North Platte, Nebr., or call (308) 532-3800. BE YOUR A R E A ’S LEADING AG BANK. Doane’s Farming For Profit can fill a gap in your marketing program. Send this exclusive ag newsletter to the best farmers in your area. For a free 6month sample subscription, write: D. R. G o rr, D O A N E , D ept. 702, 8900 Manchester Road, St. Louis, Mo. 63144. POSITION W A N T E D Second person in $12MM bank desires new position as managing officer or 2nd person with future of moving up to managing officer. 20 years experience in all phases of lending, operations and insurance. Resume upon request. Write Box GOR, c / o NORTHW ESTERN BANKER, 306 15th Street, Des Moines, Iowa 50309. Ready To Sell Your Majority Bank Stock? W rite or Call; J. Mason Henry, President CHARLES E. W ALTERS C O ., INC. P. O. Box 1313, Omaha, Nebr. 68101 Phone: (402) 553-6400 We Serve Banks and Bankers from Minnesota to Texas, from Iowa to Colorado. For more information, W rite or Call: TOM HAGAN & ASSOCIATES Correspondent Bank Department Central National Bank S-Trust Company DEλ MOINES I515)?43-B181 MEMBER FDlC LOCUST AT SIXTH/FIFTH & GRAND / 35TH & INGERSOLL / WEST DES MOINES Box 12346, N .K .C ., Mo. 64116 (816) 474-6874 “It Takes A Banker To Know One” Vol. 3 No. 83 Northwestern Banker Newsletter is published weekly by the Northwestern Banker Company, 306 Fifteenth Street, Des Moines, Iowa 50309. Subscriptions 25 cents per copy, $6 per year. Second class postage paid at Des Moines, Iowa. Address all Digitized for mail FRASER subscriptions, changes of address (Form 3579) manuscripts, mail items to above address. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis
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