Commercial Federal Corp., which a year ago came under fire from investors pressuring for sale, is near the end of a restructuring and says it is ready to face the world again.

The Omaha thrift company is close to selling 37 unprofitable branches and has already shed assets from its mortgage and leasing operations. It reconfigured its senior management by hiring executives from outside, and last week it surprised Wall Street with better-than-expected earnings.

Now the company is intent on proving to investors and analysts that it can make it on its own.

"It is time to turn the company's focus from being internal to being more outside- and customer-focused," chief financial officer David Fisher said in an interview last week. "That is the transition."

There has been speculation that Commercial Federal is trying to make itself attractive to a buyer. But William A. Fitzgerald, chairman of the $13 billion-asset company, said in a conference call last week that there was no such strategy.

"We're all feeling good that we've now got in place the right people, the right sizing, with the branches to really deliver and pick up the markets we're in," he said.

Commercial Federal still has some convincing to do. First-quarter profits, though better than expected, fell 16% from the same period last year, to $22.2 million. This year's results included $1.3 million in severance benefits. But, Mr. Fisher said, at least the "momentum is in the other direction."

Profits declined for most of last year after the Federal Reserve started raising interest rates. In August the company revised its reporting schedule to be in line with the calendar quarter, releasing earnings for a six-month adjustment period, which ended Sept. 30, of 33 cents a share. At the end of the fourth quarter Commercial Federal reported a per-share loss of 88 cents.

Mr. Fisher said that the company is confident it can meet analysts' consensus of $1.75 earnings per share in 2001.

Investors and analysts on Wall Street have taken notice of the changes. Commercial Federal's biggest, most outspokenly critical shareholder, Franklin Financial Advisors, even agreed not to nominate a director at the annual meeting in May.

"It is a much cleaner institution than a year ago," said Paul Miller, an analyst at Friedman, Billings, Ramsey & Co. "They have the ship turned and going in the right direction."

The company has consolidated 12 Commercial Federal Bank branches and offered 37 for sale. Since mid-March it has found buyers for 30 of the branches, most of which are in rural areas of Kansas, Missouri, and Iowa.

Commercial Federal did not reveal terms of the deals, which await federal and state approval and are scheduled to close this year. But Mr. Fisher said the prices are "at least at or slightly higher than my original projection." The buyers are small state banks that plan to continue providing full retail services.

The company also sold the assets of Liberty Leasing Co. in February and about $1 billion of mortgage loans in the first quarter, which reduced earnings in the period, Mr. Fisher said.

Mr. Fitzgerald said that 130 to 150 jobs were cut in the restructuring.

Senior-level changes are also meant to send a message that Commercial Federal is putting its problems behind it.

Last month the company hired Robert J. Hutchinson as president and chief operating officer. Mr. Hutchinson, 53, was senior vice president of retail banking at Michigan National Corp., which ABN Amro North America bought last month from National Australia Bank. Earlier he was a retail marketing executive at the old Manufacturers Hanover Corp. in New York.

At Commercial Federal, Mr. Hutchinson succeeded James A. Laphen, who left last July to become chief operating officer of First Federal Lincoln Bank in Lincoln, Neb..

Mr. Hutchinson will be in charge of sales and service, said Mr. Fisher, who himself joined Commercial Federal just last June. A spokesman said Mr. Hutchinson was moving his family from Michigan and was unavailable for comment.


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