Small-business banking hotshots are becoming some of the most sought- after executives in the industry, with various lenders jostling for the best talent.
Banks have raided other banks - and other industries - for expertise and plumbed their own organizations to find the right mix of talent to direct their small-business efforts.
The search for skills is a crucial part of big banks' efforts to focus on - and wring more profits out of - the small-business segment. It will continue so long as the banks see the niche as a moneymaker, say industry officials and observers.
"If they don't already have a management group or bankers in place, they are aggressively looking for the right mix," said Dennis Barnette, a partner in the Chicago-based placement firm Heidrick & Struggles. "They are trying to make sure they have the best talent that's available."
One of the easiest ways to get talent is to steal it, and banks have been doing plenty of that.
Take First Union Corp. of Charlotte, N.C. Seeking to invigorate its moribund small-business credit card operation, it last year hired David Benjamin away from First Bank System Inc. of Minneapolis, where Mr. Benjamin masterminded a card product marketed to small companies nationwide. He now is leading First Union down that road.
And in December, First Union nabbed Ellen Lurier from Shawmut Corp. to head its small-business telemarketing force.
"We worked a long time to get her," said Martha Hayes, senior vice president and small-business banking manager for First Union, adding that Ms. Lurier was offered a job by Fleet Financial Group, Boston, after it acquired Shawmut.
In California, Wells Fargo & Co. and its hard-driving sales culture has served as small-business boot camp for several banks. Donald Hance, vice president and manager of small-business banking at Union Bank of California's small-business unit, and Valerie Nicoletti, first vice president of community business banking at Comerica Bank California, are just two veterans that have leveraged their Wells experience to get high- profile small-business positions at other banks.
Ms. Nicoletti "had previously managed salespeople, was familiar with the needs of incentive programs, which was something that many of us on the commercial side didn't have, and she was local," said Margaret Bradshaw, senior vice president of community business banking at Comerica, Santa Cruz. After being hired by Comerica, Ms. Nicoletti raided her former employer for five sales representatives.
For some big banks, small-business lenders with a community banking background are worth their weight in gold. The reason is simple, according to one regional bank official, who asked to remain anonymous: "They treat their customers better than we do."
Larry Kucinick, senior vice president for Boatmen's First National Bank, Kansas City, Mo., said that hiring community bankers helps in acquiring new customers and bolstering the image of Boatmen's in the small-business community.
"We try to get the cream of the crop out here among competitors," he said. "The perception out there is that large banks aren't as user-friendly as small banks." Boatmen's First National is a unit of the St. Louis holding company Boatmen's Bancshares.
A prominent nonbank small-business lender also sang the praises of community bankers.
"We look for individuals with local market knowledge," said Michael Pilot, president of General Electric Capital Corp.'s small-business finance unit. The St. Louis-based unit recently hired about 50 lenders, most of them bankers, to staff its 40 small-business offices across the country.
Community bankers liked the fact that GE provided an escape from the mergermania, Mr. Pilot said.
"The community bankers we hired tended to be individuals that have gone through a significant level of turmoil as banks they have worked for have gone through mergers," he said.
In most cases, however, banks look inside to staff their small-business divisions. For instance, of Barnett Banks' 65-person small-business division, all but one employee are homegrown, said Steven Hickman, director of the group.
At Boatmen's First National Bank, 10 of the 13 small-business officers came from within the bank.
"You have to have continuity out there," Mr. Kucinick said. "That helps build a long-term relationship because the lenders have been out in the community."
Although some banks look to their commercial units for expertise, more pluck people out of retail divisions, observers said.
"There's a linkage between retail and small business," said Charles Wendel, president of New York-based Financial Institutions Consulting. "They both tend to be branch-oriented; small businesses react like consumers; and there's a uniformity of product."
Retail expertise is becoming more important as more institutions start applying traditional consumer-lending credit techniques - such as automated lending processes and credit scoring - to the small-business market.
Joseph Scharfenberger, senior vice president of the post-merger Chase Manhattan Corp.'s commercial and professional banking unit, had a varied career at the old Chase, including stints as a commercial lender, head of its auto lending division, and senior operating officer of its credit card unit.
Mr. Scharfenberger's unit handles businesses with up to $3 million in annual revenues.
"A lot of the competencies and techniques in large product companies are transferrable to the small-business market," he said. As examples, he cited the use of credit scoring; automated loan processing; using a range of delivery systems, such as telephones and direct mail; and a drive toward high-volume processing.
A few banks have been enlisting expertise from outside the industry.
For instance, when KeyCorp last year was looking for someone to head up its small-business leasing unit, it went to AT&T Capital Corp. to hire Patricia Pegg, then a vice president with 22 years of leasing experience.
In creating KeyLease Plus, Ms. Pegg enlisted the tools of credit scoring and automation to streamline what had been a cumbersome process and to lower the minimum lease amount to $5,000, from $25,000.
"They had a huge product gap," Ms. Pegg said. "You could get a small lease transacted but the process involved a lot of pain and agony."
Mr. Hickman of Barnett said retailers with credit card programs could be a hiring pool for risk managers. And Ms. Hayes said that First Union might hire from brokerages to staff its revamped small-business investment operation.
