Boatmen's Builds an Empire - in Memphis

St. Louis-based Boatmen's Bancshares is busy turning Memphis into the home of its thriving mortgage business.

The acquisition of Memphis-based National Mortgage in February and Worthen Banking Corp. in March increased Boatmen's servicing business to $18 billion, putting the Missouri-based bank among the top 30 mortgage servicers in the United States.

Boatmen's has spent the months since then in assimilation mode - moving most of its mortgage operations to National's headquarters in Memphis, restructuring employee compensation, and streamlining technology.

National has been given the lead position when it comes to mortgage policies. That's only fitting, given National's $13 billion in mortgage loans and 45 years of experience.

The timing couldn't be better, analysts say."Companies are either getting into the mortgage business in a big way or getting out," said Joel K. Gomberg, an analyst at Duff & Phelps Investment Research, "and Boatmen's is committed."

Acquisition of more servicing volume - $13.1 billion from National, $1.7 billion from Worthen - has helped Boatmen's stabilize earnings in the cyclical mortgage market.

"National complements Boatmen's," says Joseph A. Stieven, director of financial institution research for Stifel Nicolaus. "With their extensive retail system, it makes sense to have a strong mortgage system." Stifel Nicolaus has rated Boatmen's stock a good long-term buy.

Executive personnel turnover has been minimal in the National takeover, with National's former president and chief executive, Joel Katz, remaining along with Mark Wender, chief operating officer. Sam Margolin, 85, National's chairman and a founder, stepped down after an illness.

"We felt from the start that we had all the people necessary to run the mortgage company," said William Carson, chairman of Boatmen's new mortgage division in Memphis, Boatmen's National Mortgage Inc.

Mr. Carson previously served as president and chief executive of Boatmen's $4.4 billion mortgage division in St. Louis.

Only portfolio loan processing remains in St. Louis. The St. Louis mortgage staff has been cut in half, to 50 employees, with most of the ousted workers placed in other divisions within the bank, Mr. Carson said.

Boatmen's has also changed employee compensation and supervision in the mortgage division. "Conceptually, if you touch mortgages now, you work for the mortgage company," said Mr. Carson. "Sales, processing, and underwriting employees who were working for the bank before are now working for the mortgage company."

This restructuring has also involved a revised pay scale, with more emphasis on commissions for sales people and market managers, to reflect a "more traditional mortgage banking pay structure."

Technological improvement is focused on continuing a National project to revise the front-end operations. Boatmen's and Arthur Andersen, Chicago, are working on streamlining origination through post-closing operations. Mr. Carson is reluctant to discuss the strategic details, but he said the front-end operations would involve a PC-based system.

Boatmen's is just beginning to test-market the process in the Albuquerque, N.M., area and will be bringing it to St. Louis in November. The system is to be in place throughout Boatmen's territory in late 1996.

The company plans to have $1.75 billion in originations in 1995, including both wholesale and retail loans- the kind of slow, steady growth analysts generally applaud.

"Boatmans is like a football team that gets four yards each time, then gets their fourth down," said Mr. Stieven. "Sometimes boring banking is better."

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