HOME FEDERAL Savings Bank of Rome could have been another causalty of the S&L disaster, but a private bailout saved the floundering Georgia thrift, and new management has shored things up.

The thrift has posted steady gains in income and capital, while decreasing overhead expenses by 7% since 1990.

To continue Home Federal's recovery and conquer new markets, management has embarked on a technological overhaul. It contracted with Unisys Corp. for data processing operations, hoping to cut costs and increase business.

Although the $185 million-asset thrift, which was grossly undercapitalized in 1989 due to bad loans and a changing regulatory environment, looked like a candidate for the Resolution Trust Corp., things changed in 1990 when Home Federal put its stock up for sale.

The 71-year-old- thrift was purchased by a hometown firm, State Mutual Insurance Co.

Today, Home Federal is second in total assets and deposits in Floyd County, behind Trust Company Bank of Northwest Georgia.

That's amidst some stiff competition, including affiliates of NationsBank Corp., AmSouth Bancorp., and First Union Corp.

The thrift also has shown strong return-on-assets growth. In 1991, the ROA was 0.33%. That figure grew to 0.55% in 1992 and 0.66% last year.

Home Federal lost $1.5 million in 1990; by 1993, it was earning $1.2 million. In the same time period, it went from a capital deficit of $2.8 million to positive capital of $11.1 million. In 1990, when State Mutual acquired the struggling thrift -- putting iup $8.5 million to meet minimum capital requirements -- it brought in a new management team.

Gregory C. Wilkes, a successful banker in Rome for more than a decade, replaced Home Federal's retiring president, 70-year-old William B. Primm. Mr. Wilkes was also named chief executive.

Mr. Wilkes' first focus was putting more emphasis on retail and commercial lending, catering to the needs of the wealthy community 50 miles north of Atlanta.

Mr. Wilkes, now 46, also brought a new, fresh philosophy to the thrift, which had been known primarily as a mortgage lender.

"It's gotten very competitive for us here in Floyd County," said Mr. Wilkes. "The regional banks have beefed up their mortgage activities. Although we continue to be the leading mortgage lender in the county, we had to change our attitude to be successful."

Presently, the two-branch thrift has $100 million in mortgage loans and $35 million in other loans. The commercial real estate portion of Home Federal's portfolio increased from $8.7 million in 1990 to $18.7 million in 1993.

While only 2.34% of the thrift's loan portfolio in 1993 was made up of commercial loans, management is actively pursuing growth in this area.

To streamline operations and become more competitive, Mr. Wilkes, with the aid of his vice president of operations, Bruce Peace, converted the bank's data processing system to Unisys' Global Financial Systems, going live this February.

"We had been looking for a way to develop more of a commercial banking-based data processing operation and save money in the long run," said Mr. Wilkes.

"We can customize this software, tailoring it to our needs. "We're trying to react to the market and provide competitive products," said Mr. Peace. "With Unisys, we have more control of our destiny."

By replacing Fiserv Inc. outsourcing with Unisys' commercial banking package, the bank will increase its data processing costs from $350,000 to about $410,000 this year, said vice president and treasurer Bryan Kelley. Much of the extra expense is due to the software purchase and conversion costs.

But, said Mr. Kelley, "We knew if we spent the money, it'd pay big dividends from the growth that the new system allows."

Mr. Wilkes hopes to eventually see a savings of 30% to 50% of costs as the commercial banking package helps to increase sales.

According to Unisys project manager Jack Adley, the Global Financial Systems is a totally integrated banking system that supplies all the applications processes -- such as time and demand deposits and installment, mortgage, and commercial loans -- as well as an umbrella customer information system, which ties all account information together for combined statements and yearend reporting. In the Global Financial Systems platform, which has been on the market since 1986, all the applications interface into a general ledger package.

"By typing in a name, the salespeople can see the total relationship a customer has with the bank," said Joel Knight, director of retail banking for Unisys' united systems division in Norcross, Ga. "It gives them the opportunity to see who their most valuable customers are."

At the present time, Unisys provides facility management services, processing Home Federal's applications on Unisys V Series hardware in Bakersfield, Calif., but statements and special forms are printed at the 80-employee thrift. The goal is to convert to an in-house system in three years.

Delaying in-house coversion and a high-cost hardware purchase suits the budget of Home Federal, which is still lagging in earnings performance. Much of its large portfolio of problem loans has been charged off, restructured, or paid out, but a few remain on the books.

According to Mr. Wilkes, when State Mutual took it over in 1990, Home Federal had outstanding charges of $4 million in goodwill, which was set up on a seven-year amortization schedule. Because of that and the big expense of cleaning up the portfolio, the bank had virtually no earnings in 1990.

"It's clearly a turnaround; I don't think there's any question about that," said Bert Ely, a financial institutions consultant in Alexandria, Va. "They're not a fast-growing institution; the challenge to them, if they're going to become more like a commercial bank, is to manage that change intelligently."

With the financial data moving in the right direction, Mr. Wilkes and his management team have had more time to introduce additional products and services. In the past three years, the bank has introduced five different credit card products, including a floating rate adjustable card; retail and commercial checking, including noninterest-bearing accounts; and a full range of equity line products.

He concluded: "We've gone from nowhere to somewhere. We're still not where we want to be, but this is exciting for us."

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