After nearly three years at the helm of FleetBoston Financial Corp.'s once-ailing mortgage unit, A. William Schenck is leaving to join an Internet company in Silicon Valley.
Mr. Schenck, 57, joined Fleet Mortgage as chief executive in late 1997 and is credited with turning around the Columbia, S.C., company, once considered a chronic underperformer. He is to become CEO of I-Escrow Inc. of San Mateo, Calif., which supplies online escrow services for auction sites like eBay.
His successor is Michael J. Torke, 49, president of Fleet Mortgage, who has been with the company for 22 years, since it was headquartered in Milwaukee.
In 1996 and 1997 Fleet Mortgage suffered high executive turnover and lackluster results. Speculation abounded that its parent, then called Fleet Financial Group, would sell the company.
When Mr. Schenck came on board in December 1997, Fleet Mortgage "was struggling," said H. Jay Sarles, vice chairman of FleetBoston. "We were still able to make a little bit of money but not a lot. The operating environment wasn't as good as it should be."
Mr. Schenck installed a new management team and game plan that focused on cutting costs, improving the company's outdated technology, using more sophisticated hedging strategies, and retaining servicing customers. He stayed in the post considerably longer than several predecessors; from 1994 through 1997 Fleet Mortgage had five CEOs.
Mr. Sarles said Fleet Mortgage's earnings jumped to $80 million last year, from about $25 million to $30 million in 1996 and 1997. He said he expects earnings from the unit this year to be "similar" to last year's.
Comparing this year to 1997, Mr. Schenck said, is an apples-to-apples comparison because in the current environment most loans are for purchasing rather than refinancing, as was true then.
Morale appears to have improved. According to Mr. Schenck, annualized turnover has fallen from 30% in 1997 to "the low teens" this year.
It hasn't always been so pleasant. Last May, a shake-up in the loan production division saw the departures of Thomas C. Palmer, who had headed production, and several other managers. Fleet divided its production unit into three parts, creating separate third-party and retail origination units and aligning the consumer-direct channel with the servicing division.
Mr. Schenck said that Mr. Torke's promotion to the top spot is consistent with Fleet Mortgage's new policy of promoting from within rather than recruiting from outside. The heads of the three new production divisions were also internal promotions.
Before joining Fleet Mortgage, Mr. Schenck was vice chairman of Great Western Financial Corp. in Chatsworth, Calif. Before that he was executive vice president of consumer and small-business banking at PNC Bank in Pittsburgh, where he worked for 25 years.