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Banking Advertising in a Small Town

By J. B. Powell, Columbia, Mo.

Banker’s Magazine, July 1915

Does it pay to advertise a bank in a small town?

James P. Hinton, cashier of the Hannibal National Bank, Hannibal, Mo., believes it does, and he even goes farther and proves that it pays even in a period of financial stringency.

In 1911 the Hannibal National Bank opened a regular savings department and began to advertise it, and as a result in four years $156,000 have been attracted to its savings department.

Previous to this time only one of the banks of Hannibal had made any effort to push a savings department. All four of the banks had, of course, been receiving time deposits by the issuance of time certificates with three per cent, interest.

The bankers of Hannibal were like the bankers of all growing towns—they knew they should have regular savings departments, but hesitated to make the start because of the fear that the cost of operation would eat up all the profits.

Finally, Mr. Hinton decided to take the plunge. He contracted for space in the evening newspaper, the size of the space being five inches double column and the frequency of insertion being every other day throughout the year. Mr. Hinton is no using both papers in Hannibal and since the first insertion of his ad, there has been no let up in the publicity.

In addition to the newspaper publicity, the bank uses a letter system and a booklet and has originated many unique stunts. Two years ago, Mr. Hinton made everybody in Northeast Missouri talk about his bank by offering $1 deposit free to every baby in the community whose parents would register it at the bank. When parents bring their babies to the bank and register their names the bank starts the deposit with $1. This can not be drawn out until the parents have deposited another dollar and left the whole deposit in the bank for one year. The writer was amazed to see how some of these “baby depositors” had added to their accounts, several of them running from $25 to $50.

As to the effect of the advertising on the savings department, I will let Mr. Hinton tell the story himself:

“We opened up our savings department in 1911 and without in any wise interfering with any of our other departments, have accumulated a deposit at the present time of $156,000. Although we pay three per cent interest on all time and savings deposits, as a matter of fact our savings deposits cost us, during 1914, but 2.6 per cent. We reserve the right, of course, to demand notice in the withdrawal of these deposits, but neither the National Bank nor any of the other banks in Hannibal have availed themselves of this privilege.

“We have four general classes of deposits: 1. country banks subject to check on demand; 2. counter customers subject to check on demand; 3. certificates of deposit which when the deposit is made carries a contract for payment at the end of six months or one year; 4. regular savings department deposits.

“We have just about the same number of depositors in our savings department that we have in our commercial department. We have two bookkeepers who have charge of our commercial accounts. The savings bookkeeping requires on an average one and one-half hours each day for one bookkeeper. Of course at the end of each six months’ period there are two or three days when all hands are kept busy figuring interest. We, however, did not make any additions to the force when we put on the savings department. One of our regular bookkeepers took on this work in addition to his other duties.

“And here is the important part of the story:

“During the past two years of depressed business conditions, our savings deposits are the only line of deposits that have shown a continuous growth; the other three lines have all shown a shrinkage.”

There are many other unusual features to be found in the Hannibal National Bank, and most of them can be traced back to the spirit the bank has created largely through its advertising and service ideas. This is the largest bank and does more business than any other in Northeast Missouri. In spite of this fact, it is operated with a much smaller clerical force than any other institution in that section. This is due to a profit-sharing plan that the bank has with its employees. This system has been in force for five years and every clerk who has been with the bank for a certain length of time becomes a member of the profit-sharing system and receives his check semi-annually with the stockholders of the banks. The amount rebated to the employee is in proportion to his salary.

One wonders what kind of training has developed this unusual banking ability in a small city bank cashier. Before Mr. Hinton was appointed cashier of the Hannibal National Bank he had never been in a bank before except as a customer. He was a coal and ice dealer, the owner of the largest coal and ice business of his section. He had attracted the attention of the bank directors through his unusual business ability. He perfected a system of credit ratings for customers of ice and coal business that was adopted by every dealer in his section.

And Mr. Hinton has other activities. He was president of the Missouri Bankers Association and during his term every bank in Missouri was a member of the State Association, a record that has never been equaled. He is chairman of the executive board of the Y.M.C.A. of Missouri. He is a friend of the boys and at one time organized a Sunday school class that contained only boys who had never been to Sunday school in their lives. In the summer he organizes boys’ camps.

All of this latter, of course, is foreign to the banking business; but perhaps it shows why his bank is different from many other banks. It also shows why Mr. Hinton has been offered some of the most attractive banking positions in several large cities, which he has always refused because he prefers to live in a small city.