Estate of James Waldo Hendrickson - Page 20




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          secondary market.  In any event, Peoples needed to retain                    
          ownership of the mortgage loans it made, because its supply of               
          funds exceeded the demand for its mortgage loans--selling the                
          mortgages would have further compromised Peoples' net interest               
          margin and earnings.                                                         
                    d.    Loan Monitoring                                              
               Peoples monitored loans using paper ledger cards that were              
          stored in pockets that tracked the day of the month on which each            
          loan was due, so that if the loan was past due, the card would               
          remain in what would become a "past due" pocket instead of being             
          put in a current pocket.                                                     
               Meetings concerning delinquent loans were held by Peoples'              
          loan committee.  Peoples also had watch lists of problem loans as            
          required by the FDIC examiners, but they were not used by Peoples            
          to monitor loans.                                                            
               6.   Fee Income                                                         
               Income from fees can make a significant contribution to the             
          income of a bank.  Banks may earn income or fees from points and             
          origination fees on loans, ATM fees, trust fees, credit card                 
          fees, servicing agreements, and insurance sales.  Peoples                    
          generally charged no points or fees, however, and had only                   
          minimal fee income from its activities.  Peoples did not service             
          loans made by other depository institutions.                                 








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