WITH EACH PASSING quarter, credit card bankers nationwide turn deeper shades of green -- as in envy -- over First Chicago Corp.'s seemingly limitless growth in earnings.
That performance has turned a spotlight on Scott P. Marks, executive vice president of First Chicago, chairman of its credit card bank, and, by common consent, one of the industry's most dynamic leaders.
Credit card fee income at FCC National Bank, the company's Delaware-based card-issuing unit, totaled $164 million in the second quarter. That was 11.6% more than in the first quarter and 40.2% better than in last year's second quarter.
Total income of the credit card bank is not disclosed, but it contributed substantially to the $504 million in noninterest income and $169 million net income First Chicago Corp. reported for the second quarter. The latter figure was up from 35 million in the 1992 quarter.
Analysts attach great significance to fees, since interest yields are not what they used to be. They attribute the success of First Chicago's burgeoning First Card program, in part, to the $30 million spent on marketing in 1992.
Card outstandings were $8.9 billion at midyear, up 19% from mid-1992. A ranking by RAM Research Corp. of Frederick, Md., put First Chicago fifth in the business by that measure. The bank also sold $1 billion of receivables into the securitization market in the second quarter.
Analysts and other observers seem to fall over each other to lavish praise on First Card and its 47-year-old executive in charge.
"Scott Marks is a very capable leader who has his arms around the business," said Donald J. Auriemma, president of a card consulting firm in Westbury, N.Y.
"You only have 12 or 15 competitors who really make a difference in the credit card business," said PaineWebber analyst Lawrence W. Cohn. "First Chicago is one of them."
How did First Chicago -- historically not regarded as possessing great flair or creativity get to the top of the credit card game? According to Mr. Marks, it was a combination of broad vision and attention to detail.
"We are in a business where success doesn't come from just one thing," he said in an interview. "We have been increasing our investment in credit cards over the past several years."
A native of Georgia, Mr. Marks joined First Chicago in 1983. Previously, he was a senior vice president at American Express Co., where he oversaw marketing and sales of travelers checks and cards throughout Canada. Before that, he was a consultant at a number of companies, including Arthur D. Little Inc.
He joined First Chicago's credit card team in 1986. Mr. Cohn pointed out that First Chicago was ahead of the competition in moving to a variable-rate pricing formula and that it could afford to forgo annual fees while others were trying to resist what became an inexorable trend.
Despite short-term profit pressures, First Chicago was in a stronger position to meet competition.
Another far-reaching step was the move of the credit card division to Delaware in 1987. Mr. Marks led the relocation, letting the bank escape Illinois' restrictions on variable-rate accounts.
With the freedom available in Delaware, FCC National Bank led the industry into the variable-pricing era.
First Chicago was also a leader in the airline card movement, issuing the United Airlines Mileage Plus card. That program has grown 25% this year.
In 1991, First Chicago brought in 1.5 million new accounts.
In 1992, that number grew to 2.1 million, and Mr. Marks predicted 2.2 million new accounts would be opened this car.
Accounts at the end of July totaled 9.7 million.
And growth is expected to continue as 1993 spending on marketing will probably exceed the $30 million spent last year, a First Chicago spokeswoman said.
Among the approaches that have worked well are pre-approved solicitations and an emphasis on gold cards, which appeal to higher-income consumers who tend to be more profitable to card issuers.
As a result, First Chicago has become the leading issuer of Visa gold cards and the No. 3 issuer of gold MasterCards.
"We are targeting a credit-worthy customer who also tends to spend more," said Mr. Marks.
In fact, First Chicago is widely viewed as a banking industry pioneer -- following American Telephone & Telegraph Co.'s lead -- with no-annual-fee gold cards.
Reflecting on the last couple of years, Mr. Marks contended that FCC National Bank has been able to grow so aggressively because the parent holding, company believes in the card business and is willing to invest accordingly.
"Coming out of the recession," he said, "our credit card losses were lower than those of our competitors, who were forced to slow their growth." He is predicting 15% growth in outstandings this year, which would bring the unit to about $9.6 billion.
Meanwhile, the bank has been employing profitability analysis and micromarketing tools that Mr. Marks said have contributed to stellar earnings.
First Chicago assigns to each cardholder a score from one to 10, which indicates the return on each account.
Other banks use similar techniques, growth and bottom-line success result from the orchestration of many strategic components.
"While First Chicago has a lot of claims to fame, it is not doing anything particularly dramatic," said Mr. Auriemma, the card consultant. "It has managed to grow in a very tough environment by quietly plugging along with its no-fee gold cards."
