To a casual observer, Richard F. Chormann fits the old-style banker mold.

Dark-suited and cordial, the chairman, president, and chief executive officer of First of America Bank Corp. is a throwback to an era when bankers spent whole careers at hometown financial institutions. Mr. Chormann, 59, was born, raised, and educated in southern Michigan, and has worked there 38 years for First of America and its predecessors.

But since taking the CEO reins in May 1996 from Daniel R. Smith, Mr. Chormann has shown little inclination to be trapped in the past.

Drawing on three decades of experience with technology, he has prodded the $21.6 billion-asset holding company into restructuring and refocusing to make the most of its opportunities in an era of consolidation. In doing so, say observers, he exemplifies a new breed of banking leader who blends the traditional and modern.

Mr. Chormann is unusual "in being from the old school but having a technology background," said Tony Howard, analyst and director of research for First of Michigan Corp. in Detroit. "But he's part of a trend in which up-and-coming management executives are coming from technology areas."

Mr. Chormann started his career at a First of America predecessor in 1959 and quickly found a niche in the data processing area.

In the early 1960s "we were going from the punch-card equipment to the first transistorized computer-the IBM 1401 series, which replaced the vacuum tubes and so forth," he recalled.

"From a programming systems person to a department manager and then all through my senior management positions, I've always had the responsibility for the data processing function," he said.

In more recent years, the hallmark of Mr. Chormann's leadership has been his dedication to making the bank more efficient.

Mr. Howard said that Kalamazoo-based First of America has made strides in its efficiency ratio. In the early 1990s this measure of how much it costs to generate operating income hovered around 63 cents to the dollar. At the end of last year, the bank had cut the ratio to a "more respectable" 60.2, and Mr. Howard said the number could fall to around 56 in the next few years.

The improvement is largely a function of how First of America has been deploying its technology and staffing dollars. Mr. Chormann exercises tight control over both.

Mr. Chormann said the bank spent between $75 million and $100 million on technology over the last five years. He concedes this is a small amount for an institution of First of America's size, but attributes it to a careful avoidance of the proverbial black holes-technology projects that suck in money and give nothing in return.

He said the bank has eschewed widespread experimentation, opting to focus on a handful of projects that can deliver both short-term payback and sizable potential.

For example, by creating campus smart card programs for eight U.S. colleges, First of America is pioneering in a field that many expect to explode in the next few years. Even if consumers nationwide do not embrace chip cards in the short term, the campus programs still generate decent revenue and give the bank access to a pool of customers with good future prospects.

"Are we making a ton of money on this? No," said Mr. Chormann, who as a director of Visa U.S.A. has a window on advanced card technologies. "But it's putting our name in front of the students, and it's getting us in on the ground floor of something that could take off."

Another area of investment is the bank's call centers. Like most banks, First of America uses the telephone to deliver basic banking services to serve customers more efficiently.

But it takes the management of call centers a step further than many institutions, pushing phone operators to sell products to customers.

About 2% of the million calls the bank handles each month result in sales referrals, Mr. Chormann said. Most of the new-product sales are to customers, which means the call centers are helping the bank achieve one of its primary goals-expanding relationships.

Mr. Chormann acknowledges that all is not perfect in this new corner of the banking delivery system. Like other banks, First of America has discovered some customers overuse the service, driving down their profitability. "It's things like this that throw your plans to move transactions away from the branch out of whack," the CEO said.

"Now we have to go back and price the service so that the people who use it as we intended get it for free, but those who use it 30 times per month pay something for that."

Identifying the right time to begin charging customers for nontraditional service modes is one of the reasons First of America has invested in systems that measure customer and product profitability.

"I think profitability measurement is creating a growing difference in the way that banks develop products," Mr. Chormann said.

"I don't want to say technology is king, but it provides us with the opportunity to know more about our business than we've ever known before."

He said the bank's commercial lending unit also is tied into the profitability system. By linking loan officers' compensation to the income generated by business they bring in, First of America can maximize its sales abilities.

The profitability system "does very good things for us in terms of getting lenders to understand the importance of slight changes in the way they price their loans," Mr. Chormann said.

The talk of enhancing revenue is music to the ears of analysts.

"The bank has made tremendous strides in the last year and a half," said Michael M. Moran, analyst with Roney & Co. in Detroit. "That said, there's still room for improvement-particularly in top-line revenue generation."

Mr. Moran and First of Michigan's Mr. Howard both view First of America as a premier acquisition target.

Mr. Chormann has heard the talk before. Though he would prefer to remain independent, he said the takeover talk does not affect his management of the bank.

"If we strengthen ourselves as much as we can in terms of our financial performance, our shareholders are going to benefit because we'll have good value in the marketplace based on our fundamental performance," he said.

"On the other hand, if someone wants to acquire First of America, we will not have left opportunity on the table for them to benefit from."

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