National Bank of Commerce of Birmingham, Ala., scored a big victory recently when it hired 13 disgruntled bond salesmen from neighboring giant AmSouth Bank.
The sales people, most considered top-notch producers, left AmSouth after the $17.1 billion-asset institution announced three weeks ago that it is discontinuing its correspondent-banking bond business.
"This is a very rare opportunity," said John H. Holcomb, president and chief executive of $405 million-asset National Bank of Commerce. "It was once in a lifetime. We were delighted to get this quality of personnel."
Mr. Holcomb added that his bank "did not go out to solicit these folks."
Birmingham-based AmSouth, which has offices in four states, announced May 12 that it had formed an "alliance" with Morgan Keegan & Co., a Memphis-based investment firm, to handle fixed-income securities sales for AmSouth's correspondent banks.
At least five AmSouth bond department employees will become Morgan Keegan employees, AmSouth said. They will continue to work out of AmSouth's building, at least initially, the bank said.
The defections, however, mean that bond services for 200 to 300 community banks are up for grabs. National Bank's new employees are actively working to bring their old accounts with them, their new employer said.
"The response has been very favorable," said William J. Billingsley, senior vice president and head of National Bank's bond department. "We've been very satisfied." AmSouth's decision would not affect its balance sheet, it said.
The exodus from AmSouth more than doubled National Bank's bond unit. Its department had consisted of five salesmen, one trader, and four back-office employees. Gross revenue has been "well into the seven figures," Mr. Holcomb said, and the unit should generate revenue of about 1% of the bank's total assets annually.
"The size of the change is what's unusual," said Mr. Billingsley. "The volume will be astronomically higher than what we're accustomed to doing. Our activity here will be somewhat out of kilter compared to other banks around the country."
National Bank of Commerce, just one-fortieth the size of AmSouth, probably appealed to the AmSouth bond salesmen in part because of the presence of people like Mr. Billingsley, who had worked more than 25 years at AmSouth before moving. At one point, eight of 10 senior management posts at National Bank of Commerce were held by former AmSouth people, Mr. Holcomb said.
National Bank, which is privately held, achieved record earnings in 1994 - $6.1 million, a 15% jump from the previous year. Return on assets increased slightly from 1993, to 1.66%, but return on equity declined a bit, to a still highly respectable 17.88%.
Other 1994 numbers were impressive as well. Nonperforming assets totaled just 0.60% of loans and real estate owned, and the operating efficiency ratio improved from 73% to 68%.
