A Repairman for the U.S. League

Robert McMahan, vice chairman of the U.S. League of Savings Institutions, says the trade organization is in "disrepair" and must pull itself up by the bootstraps.

Mr. McMahan, chairman and chief executive of Decatur Federal Savings and Loan Association in Decatur, Ga., is adamant that there is a need for thrifts. But he knows firsthand the problems they face. His own $2.7 billion-asset thrift lost $899,000 after a $9.6 million writedown for commercial real estate.

A native of Tennessee, Mr. McMahan, 51, joined Decatur Federal in 1969 as a $600-a-month teller after quitting a finance company. In 1989, he became chairman and chief executive.

He discusses his views on the industry and the league with Washington Bureau reporter Bill Atkinson.

American Banker: Why did you take the vice chairman position? Robert McMahan: I never thought about being on the chair. I got a call out of the clear blue. I agreed to do it because I think the league has been in disrepair. The industry has been in disrepair. I think I can help bring some of it back together. AB: What do you mean by disrepair? RM: It's in disrepair by the fact that you've ... got people leaving. It's sort of helter-skelter. Anytime you go through a dramatic change, I don't care what business you are in ... you've got to pick it up by the bootstraps and go forward. AB: What is your role? RM: The league has been going through a downsizing. When you downsize ... you are going to raise concerns about lost services. My role is going to be this year to listen to our membership and make sure we are providing services where they are needed. AB: How does your thrift make money these days? RM: We are a large single-family originator, both in our own network and our mortgage company network. We take those loans and we sell all of our fixed-rate product, primarily to Fannie Mae and Freddie Mac. We always retain servicing. AB: Are earnings hard to come by in Atlanta? RM: This year we'll end up writing off about $17 million in reserves. Commercial lending is a fiasco in the Atlanta market-place. If it wasn't for Blimpie's and dry cleaners, every shopping center would be empty. Our core income is good. In the fourth quarter, analysts are projecting we will earn 75 to 85 cents. AB: With all of the negative publicity about thrifts, do you have a problem telling people you're an S&L executive? RM: I'm a dyed-in-the-wool savings and loan person. I'm not ashamed of it. If you are ashamed of what you are doing, you damned well ought not be doing it. AB: How have you countered the negative publicity? RM: We tagged ourselves as the family bank, and we used Hal Holbrook ... in our advertising. People know who we are now.

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