STEVENS POINT, Wis. - John C. Seramur leads a visitor past the artificial fireplace and potted plants in his sixth-floor office to a bank of windows overlooking Main Street, and points down to a featureless one- story building below.
"That's where we started 30 years ago with 600 square feet," he says with pride. "We've come a long way since then."
A burly man, whose amiable face is framed by broad wire-rimmed glasses, Mr. Seramur deserves to gloat a bit.
In 1965, First Financial Corp. opened its tiny office with less than $1 million and the dream of financing a building boom in this central Wisconsin town.
Nine months later, young Mr. Seramur joined the firm as a loan trainee. A year after that, he was president. "We only had three people at the time," says senior vice president Kenneth Csinicsek.
Today, the 52-year-old Mr. Seramur is chief executive of a $5.1 billion- asset entity that has emerged as Wisconsin's largest thrift holding company and one of the industry's top performers.
Credit goes largely to Mr. Seramur, who is described by observers as a hands-on manager who likes to run the show himself.
"There are a lot of nice old people in the thrift business, but John's not one of them," says Wayne Bopp, an analyst for Stifel, Nicolaus & Co. in St. Louis. "He's a tough guy. He sets high standards and he achieves them."
With 124 branches in Wisconsin and Illinois, First Financial boasts one of the industry's best records for asset quality, with nonperformers making up just 0.55% of the total.
Return on assets for 1994 stood at a respectable 0.97%, despite what officials call an "embarrassing" writeoff for some investments gone bad. Return on average equity for 1994 has been estimated at 18.37%.
Perhaps more impressive is First Financial's net interest margin, which has hovered near 3.4% for the past several years, and, thanks to a $900 million consumer loan portfolio, is expected to rise if the present climate of rate hikes continues.
Company officials point to an emphasis on credit cards (it has issued 250,000 of them), education loans, and home equity lines as a key differentiator between First Financial and most other thrifts.
"We don't try to make commercial loans," says Mr. Seramur. "We focus strictly on family."
Most of that business is in Wisconsin, a state with unusually high asset quality in consumer loans.
Those loans "perform very nicely for us as interest rates go up," he adds. "Our margins are not only holding, they're actually increasing."
Also fueling First Financial's rise has been a hearty appetite for acquisitions. The company has doubled in size since 1990, and is about 12 times bigger than it was in 1980. Its latest purchase, a $71.7 million deal for FirstRock Bancorp, a $400 million-asset thrift based in Rockford, Ill., won approval from the Office of Thrift Supervision in late December. It is expected to be completed by March.
Analysts say that FirstRock is a good strategic move for First Financial, adding six branches to its presence in northern Illinois and more than $1 billion in mortgage servicing to its portfolio.
"Their servicing portfolio will double, and they will be able to consolidate some of the operations and get good economies of scale," Mr. Bopp says.
Shrewd acquisitions, with an eye to back-office consolidation opportunities, has helped First Financial cut its efficiency ratio steadily, to 53% last year.
The company boasts that its average customer uses three separate services, while its focus on consumer lending helps it achieve a net interest margin that is typically 100 basis points higher than an institution had before being acquired.
The result is pumped-up earnings, which analysts expect to be about $47 million, or $1.85 per share, for 1994.
Those figures would have been higher if not for an ill-fated stab at investing in high-yield securities backed by adjustable-rate mortgages.
In 1992, its balance sheet full of cash from recent acquisitions, First Financial purchased $1.3 billion in California-based securities. A short time later, the servicer of the backing loans, Guardian Savings and Loan, was seized by the Resolution Trust Corp.
The RTC took over the servicing role, and according to Mr. Seramur, failed miserably at it.
The move, which observers say was out of character for the normally conservative investor, cost First Financial $6 million in second-quarter chargeoffs.
"We're very embarrassed," says Mr. Seramur. "We chased the higher yields, which is something that we never do, and we got caught. We learned a lesson."
So much so that, at a Piper Jaffray Inc. investor conference right after the chargeoff was announced, Mr. Seramur's display of contrition "nearly brought the audience to tears, he was so forthright about his disappointment in what had happened," recalls Bill Ryan, a Piper Jaffray analyst.
That misadventure may be responsible, in part, for the company's low stock price. But analysts say it was an isolated blemish on the record of the staid thrift, and most have a strong "buy" recommendation on it.
Share prices have hovered in the $14 range over the past several months. But Mr. Bopp at Stifel, Nicolaus predicts it will rise to about $20 by year's end.
Another depressant on the price is Wall Street's perception, fueled by a 20% ownership by insiders, that First Financial "is a buyer, not a seller," according to Mr. Bopp.
Piper Jaffray's Mr. Ryan says that, eventually, he expects First Financial to be an acquisition target. Among the leading potential candidates is Keycorp, which follows a strategy similar to that employed by the Wisconsin thrift.
The truth is that, aside from an earnings performance that ranked 13th on Fortune magazine's list of top 500 service companies, not much about First Financial is flashy.
"A real plain-Jane shop," is how Mr. Bopp describes it.
With the exception of a large franchise it picked up through acquisitions in the Milwaukee area, it has shunned the big cities, choosing instead to focus on conservative midwestern towns like Peoria, Ill., and its home base of Stevens Point, a sleepy college town of 23,000 nestled comfortably in the middle of birch, pine, and oak forests.
Stevens Point may seem an unlikely headquarters site for an institution of First Financial's size. But Mr. Seramur insists that nothing could be further from the truth.
In the 1980s, the company contemplated moving to Milwaukee, about three hours southeast, but opted to stay where living costs were lower and cheap college labor was readily available.
Since then, technology has flourished, making location even less important. As evidence, Mr. Seramur tells the story of First Financial's 1992 acquisition of United Federal Bank, a $900 million-asset Galesburg, Ill., thrift owned by Westinghouse Corp.
The entire deal, including a $55 million financing package, was completed by phone and fax, without anyone from First Financial ever leaving Stevens Point.
Says Mr. Seramur: "Anybody who says that you've got to be in a big city to be successful is wrong."
Mr. Engen is a freelance writer based in Minneapolis.