Life’s Lessons Learned #51: Credit Department

I was now the second graduate of the “LCFNB Management Training Program”. The first, Don Derstler, was a lending officer in the Mortgage Department, and I was placed in the Credit Department, where I would train to replace Charlie Bender. Charlie was then to be promoted to a Commercial Loan Officer.

The Credit Department was a small three-person department (often supplemented by a management trainee). The department had several responsibilities: (1) maintenance of files for each active commercial loan customer, (2) storage of closed commercial loan customer’s files, (3) preparation of applications for all lines of credit to be approved by either the bank’s Loan Committee or the bank’s Board of Directors, (4) working with the lending officer, make a recommendation to the committee/board, (5) responding to all external and internal reference requests for the bank’s commercial customers, and (6) the training of the bank’s management trainees in both financial statement analysis, and the bank’s commercial loan policies and procedures.

My new department was located in the rear on the main floor of LCFNB’s Main Office at 23 East King Street. As you entered the bank from King Street there was a small, all glass-walled, vestibule with two night teller windows on the left and a locked door on the right. The locked door led up a flight of stairs to a small room with a window that overlooked the main banking floor (some sort of security room, that I never saw put to use). From the vestibule you entered the main banking floor. There was a line of teller windows on the left front, at the end of which, were the head teller’s window, and a note (loan) teller’s window. At the far end of the teller line was the bank’s main cash vault, which was not accessible to the general public. One little side note here: inside the main cash vault the bank kept a $10,000 bill. I was told that this was the highest denomination bill ever printed. Our $10,000 bill had the picture of Salmon Chase on the front. Some Internet research has shown nine different $10,000 bill designs over history. Bills of this denomination were officially discontinued in 1969.


On the right side of the main floor front was the “platform”. Here were located the branch manager, several commercial loan officers, and a couple of secretaries/new account clerks. Midway through the first floor there was the safe deposit box vault (on the left), an elevator to the upper floors (in the middle), an open hallway to executive offices, and a flight of stairs to the second floor balcony where there was an exit to a rear parking lot.

The Credit Department was located in the first two offices in the row of executive offices. Judy Sherts, the Credit Department filing clerk, occupied the first office. This room was filled with filing cabinets that held the bank’s commercial loan files. Joann Blank, the Credit Department secretary, sat outside of the second of the two offices, where Charlie and I had our desks. The remaining offices in this area housed two Vice-Presidents, two Executive Vice-Presidents, the President, and the Chairman of the Board of the Bank. Both the President and the Chairman had personal secretaries. Finally, in the back of this area was the bank’s Board Room.

At first I was responsible for answering external letter and phone inquiries about the bank’s customers. I was embarrassed to learn that my writing skills were not quite up to established standards, but I quickly developed an acceptable set of boilerplate responses. I was also called upon to make inquiries of other banks on behalf of our lending officers. I remember one particular case where one of our commercial lending officers suspected that one of his loan applicants was not listing all of his dealings. The Bank I had to call was a small bank in northern Lancaster County (Denver National Bank). Since it was a small, one-office, bank I asked the person who answered the phone if I might speak with the bank’s President. He replied, “Speaking.” I then asked if he would check to see if he possibly had our applicant as a customer. He answered back, “No, he doesn’t bank here.” I then followed with the suggestion that it might be only a checking account. His reply, “We only have one customer with that last name, and it isn’t him.” As an aside to this story, several years later a friend arranged for a blind date for me with a woman, who I discovered on the date, was that bank President’s daughter. However, I also learned that the small town bank President’s daughter was also the ex-wife of the then United Press International (UPI) White House correspondent.

After a few months in the Credit Department I was sent to Philadelphia to work and train under the wing of the man in charge of the First Pennsylvania Bank’s Credit Department, Wally Klosterman (sp?). While I do not remember exactly how long I was with First PA, it was a life changing experience, and will be the subject of my next blog entry.

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