EDITOR'S NOTE: For Banks, Customers Are Still the Bottom Line

Soaring profits, merger activity, and attendant rises in stock prices have made "shareholder value" one of hottest topics in banking circles.

In the name of improving banks' appeal to investors and potential merger partners, chief executive officers across the country have reassessed, reengineered, and reinvented their institutions, cutting staff and investing in new technologies along the way.

As important as stock performance is to banks, some in the industry fear that market success could grow to be viewed as an end unto itself - something pursued to the detriment of a bank's long-term interests.

David E.A. Carson, chief executive of People's Bank in Connecticut and the subject of this month's cover story, is among those warning against such an approach to banking.

"There's a need to strike a balance between the responsibility to shareholders and the responsibility to the public and to customers," Mr. Carson said during a recent interview at the bank's headquarters.

His $7.2 billion-asset institution was on the brink of disaster in 1991, with a stock price that had dipped to below $2 per share.

Since then, the bank and its stock price both have bounced back, and Mr. Carson attributes the recovery, in large part, to a focus on giving customers the services they want most.

"When the customers get what they need, the rest will follow," Mr. Carson said.

The People's Bank story appears on page 4A. As always, let us know what you think.

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