After spending most of his career building empires, Robert J. Bennett has little time for people who advise him to join a larger kingdom.

Mr. Bennett, 52, has spent the past six years turning a once sleepy thrift in upstate New York - the Onondaga County Savings Bank - into Onbancorp Inc., one of the best-managed, healthiest, and safest banks in the Northeast.

As chairman and chief executive of the Syracuse-based company, Mr. Bennett says he is only halfway toward his goal of building the company into a super community powerhouse.

Potential suitors are nevertheless sizing up Onbanc, as the $3.8 billion-asset company is known, at its current size.

Time Is Not Right

"People have made overtures," concedes Mr. Bennett, who declined to name them. "We're not interested at this point."

Instead, he said, Onbanc will double its size over the next few years. He has made significant, strides toward that goal by negotiating the purchase of Franklin First Financial Corp., a $1.2 billion-asset thrift in northeastern Pennsylvania. He also has his radar out for deals in other small cities in Pennsylvania, upstate New York and even in Canada.

Analysts say it's unlikely that suitors will stop knocking on Mr. Bennett's door anytime soon. "They have an outstanding franchise," says Anthony J. Polini, an analyst at Mabon Securities Corp., New York. "Their takeover appeal is tremendous."

Potential Buyers

He lists superregionals such as Keycorp in nearby Albany, Rhode Island's Fleet Financial Group, New Jersey's First Fidelity Bancorp., and Pittsburgh's PNC Financial Corp. as potential suitors.

Mr. Bennett is aware that his ambitious plans may contain the seeds for a takeover. The bigger and stronger a company gets, he says with the voice of experience, the more attractive it is to acquirers.

He should know. Before joining Onbancorp in 1987, Mr. Bennett spent 12 years at Boatmen's Bancshares. During his tenure at the expansionist St. Louis-based company, he oversaw the integration of 69 separate banks and more than 150 branches in four states. Boatmen's grew from $700 million to $11 billion in assets during his stay.

Today, he says that the best shark repellent is to be the highest-performing bank around. "If anyone wants to pay three times book, we can talk," he quipped.

Startling Makeover

Right now he's brewing shark repellent. He helped transform Onbanc from a $1 billion-asset underperforming savings institution to a successful commercial banking company. The company, which became a bank holding company in 1989, operates the $3.1 billion-asset OnBank and Trust Co. and the $400 million-asset Onbank savings bank.

The two units have 70 offices in and around Syracuse and Albany. OnBanc is No. 1 or No. 2 in share of consumer deposits and commercial accounts in most of its markets - and it is profitable.

In 1992, it earned $28.6 million, four times what it made in 1988, Onbanc's first full year as a publicly-held company. In that same period, Onbanc has doubled its deposit base to $2.2 billion and expanded its loan volume by 55%.

Tradition Cherished

One thing Mr. Bennett has left intact is the company's community banking roots. Onbanc, which traces its origins to 1850, continues to concentrate on consumer banking, especially mortgages and home equity loans. However, it recently made big strides in strengthening its hold on local small and medium-size businesses.

Late last year, Onbanc bought two banks in Albany and Syracuse from Midlantic Corp. For $89.9 million, Mr. Bennett expanded his company's commercial loan portfolio from $70 million to $250 million, while its $80 million of business deposits grew to $280 million.

Strict Loan Standards

Mr. Bennett's big-bank background, however, also makes him extemely sensitive to credit quality. Loan officers steer clear of commercial construction credits and are given strict geographic limits on where they can operate. But in keeping with OnBanc's community banking spirit, Mr. Bennett says that local officers call the shots on 97% of loan decisions.

The discipline has paid off. Nonperforming assets were just 0.91% of total assets, well below the average 3% for banks with assets between $2 billion and $5 billion, according to Keefe, Bruyette & Woods Inc.

Despite his recent acquisition binge, Mr. Bennett is keeping a firm eye on profits. In the first six months of 1993, OnBanc's earning's were up 52% to $18.9 million over the same period last year.

The company's return on equity is a healthy 15.7%, while its return on average assets was 1.0%. Mr. Polini, the Mabon analyst, expects Onbanc's 1993 earnings to be 23% higher than last year's.

Boon to Earnings

Mr. Bennett believes the pending purchase of Franklin First Financial will be as important to earnings as the Midlantic deal. The healthy 22-branch Pennsylvania thrift is being purchased for $138.6 million, or 1.4 times book value.

Onbanc ventured into northeastern Pennsylvania two years ago with a loan production office. It liked Wilkes-Barre, an aging city that was built over anthracite coal mines, because its characteristics were close to those of Syracuse: Lots of small businesses, major transportation routes, stable realty values, and a middle-class population.

Having established a toehold, Mr. Bennett waited for the right opportunity, then moved swiftly to bag Franklin First.

Target Cities in New York

He says he hopes to repeat the pattern in Buffalo, Rochester, and several other New York towns where Onbanc has opened loan offices. He has no desire to be in a large city like Pittsburgh - which is hundreds of miles from Wilkes-Barre - but he has opened a lending office there in the hopes of expanding in the suburbs.

Observers say Mr. Bennett, a Massachusetts native with a degree from Harvard Business School, has imported an aggressive, big-city style to Onbanc. It's refreshing, they say, but some wonder if the executive is moving too fast.

"In some ways they've taken on the tone, style, and operating approach of a larger bank," said Les Dinkin, president of NBW Consulting, a bank marketing consultant in Westport, Conn. "They may have lost some of their edge as a the local hometown bank."

Mr. Bennett counters that Onbanc keeps local management in place as it expands. But he notes that an aggressive acquirer and potential takeover target can't afford to be too laid back.

"We can accommodate the growth and reach our goals," he said.

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