ST. LOUIS - Norman Tice is sure a bank that can't make money lending to low- and moderate-income customers must be doing something wrong. Mr. Tice runs Boatmen's Bancshares' community development corporation, and with nearly a 17% return on equity, he's clearly doing something right.

"The product line is designed to make money," Mr. Tice said in an interview. "We don't make as much money as other products, but it's got to be profitable."

"Poor people pay their bills just like everybody else," added Clifton Berry, Boatmen's vice president of community relations.

Together, Mr. Tice, 60, and Mr. Berry, 44, head up the $32 billion-asset company's effort to comply with the Community Reinvestment Act.

The company's lead bank, Boatmen's National Bank of St. Louis, has earned three consecutive "outstanding" CRA ratings. Of the 50 Boatmen's banks, regulators have judged half outstanding on CRA exams; the rest hold "satisfactory" ratings.

The most profitable of the bank's CRA products are its "BASIC" mortgages, which are offered to borrowers who earn less than 80% of the median family income in St. Louis and four surrounding counties.

Boatmen's offers both fixed- and variable-rate BASIC mortgages. These loans also offer more flexible underwriting terms, such as a 95% loan-to- value ratio.

After community groups suggested ways to improve Boatmen's CRA performance, the bank made seven modifications to its BASIC mortgage, including scrapping the minimum loan amount, waiving certain application fees, and doubling available seller contributions to 6%.

In 1994, the lead bank made 333 BASIC mortgage loans, out of its 2,986 total mortgages.

Boatmen's St. Louis revamped its community reinvestment program in 1986, pledging to make $50 million available in low- to moderate-income areas. With $300 million of CRA loans under its belt, Boatmen's has exceeded that goal six times over.

"We're ahead of the game, but it's not by coincidence," said Mr. Berry, noting that getting high CRA marks isn't easy.

CRA grades also are difficult to maintain. Achieving an outstanding rating means the bank must build on its leadership status to keep up the rating, said Mr. Berry. And regulators keep raising the bar.

"Over any of those two-year exam periods, had we stayed where we were, we probably would not have gotten an outstanding rating," Mr. Berry said.

At Boatmen's, CRA loans are treated like any other product the bank offers.

"In some periods, the performance of our CRA loans has been as good or better as the performance of our general portfolio," Mr. Berry said. "We're not losing money."

Company culture also influences CRA results, he said.

Ultimately, CRA is the responsibility of the chief executive of each of Boatmen's 50 banks, which are spread across nine states. However, all employees are evaluated in annual performance reviews on how well they meet CRA expectations.

The Boatmen's community development corporation also plays an oversight role, checking up on each bank to make sure CRA goals are being met. The CDC doesn't, however, take a cookie-cutter approach.

"To take some kind of template and overlay it on all of our banks would be inappropriate," Mr. Berry said.

Boatmen's can't standardize its CRA program because the credit needs of St. Louis vary from those of, for example, El Paso, Mr. Tice said.

One Boatmen's program that has won regulators' praise is a depositaccount designed specifically to reach low- to moderate-income people who have never dealt with a bank.

Boatmen's teamed up with a community group, St. Louis Grace Hill Neighborhood Services, to offer the account, which has no minimum balance and no service charge.

The bank also is helping finance Lindell Centre, a 50-unit, short-term residence for people undergoing cancer treatment. Last year, the bank underwrote a $7 million bond issue for the project, which is slated to be completed next month.

Among its many alliances, Boatmen's runs a Neighborhood Partnership Program, which offers up to $15,000 a year to community outreach groups to promote affordable housing in St. Louis. In return for the grants, the groups must report quarterly on how Boatmen's can enhance its CRA program.

Boatmen's also participates in an internship program that gives high school students summer jobs at the bank. This year, Boatmen's will employ 12 students.

With these and other projects going strong, Mr. Tice said, he is confident the bank can retain its top grade even under the new CRA rules adopted last month.

"Our approach to CRA takes care of the spirit of the law as well as the regulation," Mr. Tice said.

But just in case, Mr. Berry said, Boatmen's hired a consultant to test the bank's program under the new rules. The bank came out with an outstanding rating, he said.

While Boatmen's may have compliance in hand, its next challenge may be more competition for CRA loans.

"The market is thin," admitted Mr. Berry. "And it becomes thinner when you have an increase in interest rates like we've had recently. We see CRA as competitive."

Boatmen's success is, in part, tied to the people it has entrusted to carry out its CRA program.

Mr. Tice has been doing community reinvestment lending since 1970. While he began his banking career in 1957 with Boatmen's, Mr. Tice left in 1970 to start a bank serving credit needs that were being ignored by the well- established banks, including Boatmen's.

He took his current job in 1986 when Boatmen's bought his institution, City Bank. In addition to heading the Boatmen's CDC, Mr. Tice also is chief executive of Boatmen's Credit Card Bank and chairman of MasterCard International Inc.

For his part, Mr. Berry began his banking career as a commercial real estate lender in 1979 after graduating from Dartmouth University. He worked at several St. Louis-based institutions, before joining Boatmen's in 1991.

In addition, Mr. Berry has experience where regulators want CRA loans to go; he grew up in a St. Louis housing project.

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