Firstar Corp. president and chief executive officer Jerry A. Grundhofer has built a reputation as an energetic motivator with a knack for turning around underperforming banks.
The man who directed Firstar's $10 billion deal to buy Mercantile Bancorp. is a "a human sparkplug," according to Michael L. Mayo of Credit Suisse First Boston, which advised Firstar in the transaction.
Mr. Grundhofer, 54, is largely credited with making Firstar, and its predecessor Star Banc Corp., one of the most efficient and well managed banking companies in the nation.
The deal for St. Louis-based Mercantile would put Mr. Grundhofer at the helm of the nation's 16th-largest banking company. Though this comes right on the heels of Star Banc's November purchase of Firstar, Mr. Grundhofer's achievement in acquiring a lagging company and improving its performance appears to have earned Wall Street's confidence.
His success has a lot to do with his management style, according to Lori Appelbaum, an analyst at Goldman, Sachs & Co.
"He visits all the employees; he's very hands-on," Ms. Appelbaum said. "That really builds morale, which translates into better performance."
Observers said Mr. Grundhofer's involvement with day-to-day operations sets him apart as a CEO.
"He's a very high-energy individual who demands a high level of performance from the people who work for him," said Michael L. Granger of Fox-Pitt Kelton Inc.
To keep tabs on his company's performance, Mr. Grundhofer meets with the managers of each business line once a month to talk numbers.
"They have to explain in depth why their business unit is or is not performing well," Mr. Granger said. "It's relatively unusual for a bank CEO to manage that actively."
Mr. Grundhofer and his older brother, John, who runs Minneapolis-based U.S. Bancorp, came a long way to achieve their lofty posts at the top of two of the nation's largest banks. The brothers were raised in a blue- collar neighborhood of Glendale, Calif., where their father tended bar and their mother cleaned houses.
A strong pitching arm won Jerry Grundhofer a baseball scholarship to Los Angeles' Loyola Marymount University. He was graduated from Loyola in 1967 with a history degree.
Mr. Grundhofer started in the banking industry by working summers at Union Bank of Los Angeles. At 35, he was president of Los Angeles' Alliance Bank and went on to become executive vice president of retail banking at Wells Fargo & Co. and later vice chairman of Security Pacific Bank. After helping negotiate Security Pacific's sale to what was then BankAmerica Corp. he became a BankAmerica vice chairman. He joined Star Banc Corp. of Cincinnati in 1993 as chairman and chief executive officer.
