With earnings sagging, Hogan Systems Inc., a major developer of core banking software, recently appointed its fourth chief executive in less than two years.
Late last month, the company appointed Michael H. Anderson president and chief executive officer, succeeding Gregor G. Peterson, Hogan's largest investor, who assumed the post in July 1991, after his predecessor, Patric J. Jerge, resigned.
Mr. Jerge, in turn, had only held post since Aug. 10, 1990, after Gary Fiedler, Mr. Jerge's predecessor, left to become Equimark Corp.'s chairman.
"None of us would take pride in that kind of turnover," said William O. Hunt, chairman.
A revolving door in the executive suite could make a vendor's customers nervous. But in Hogan's case, bankers are taking the trouble in stride.
"The fact that Hogan has a long-term relationship with IBM gives us confidence," said John Brecht, president of the First of America Corp.'s operations unit in Kalamazoo, Mich. "Absent that, there's no question we'd have major concerns."
Hogan is one of the most important software suppliers in the financial industry. Sixteen of the country's 50 largest banks, including Bank of America, Citibank, Chase Manhattan, and First National Bank of Chicago, rely on Hogan for IBM mainframe-based programs for deposit, loan, customer information, and profitability analysis.
The company's software is used in some 20,000 bank branches worldwide. IBM owns nearly 5% of Hogan and prefers the company's software for its bank systems.
But, in recent years, Hogan's financial performance has been unsteady. In the year ended March 31, Hogan reported net income of $1.9 million on revenues of $56 million, down from $4.1 million on revenues of $44 million 1991, but better than the $2.0 million loss on revenues of $35 million in 1990.
The instability in the executive suite was caused primarily by Mr. Jerge's abrupt departure.
Mr. Jerge, now president of Product 4 Inc., St, Louis, a start-up branch automation software vendor, said he left making some serious lapses in judgment at the company while he was in the midst of a divorce.
Leader for the Long Haul
Mr. Peterson then assumed the post temporarily until a long-term replacement could be found. Now, Hogan officials say they've found their long-term leader in Mr. Anderson.
"We felt he was just right guy to achieve what we wanted to do," Mr. Hunt said.
Previously, Mr. Anderson was executive president of NEC Technologies in Boxborough, Mass. He has also worked at Nixdorf Computer Corp. and International Business Machines Corp.
Mr. Anderson said one of his top priorities will be to revitalize Hogan's software license sales and royalty income, which fell from $15 million in 1990 to $6.7 million in fiscal 1992.
Those business lines were hurt by the recession and by the restructuring of a marketing agreement with IBM in 1990. Mr. Anderson said he wants to find ways to help IBM sell Hogan software more effectively.