How Downturn Changed a Banker's Life

IPSWICH, Mass. -- A year ago, T. Lincoln Morison oversaw $10 billion of loans to giant companies. Today, he keeps tabs on $70 million lent to plumbers, boutique owners, and restaurateurs.

The 50-year-old banker used to wine and dine high-ticket clients like Prime Computers and Time Warner at pricey Boston restaurants. Now customers frequently stride into his office unannounced.

Life Turned Upside Down

Like many other New England bankers, Mr. Morison has seen his life turned upside down by the region's banking crisis.

Last August he was pressured to resign as head of Bank of Boston's troubled commercial lending division, which has 1,100 employees. Now he is chairman and chief executive of First National Bank of Ipswich, a suburban Boston institution with 81 employees and $110 million in assets.

In many respects the job is a comedown for Mr. Morison -- involving a big cut in pay and prestige. But unlike thousands of other bankers in the region thrown out of work, Mr. Morison has managed to land on his feet.

"Look at it this way: I'm a bank chairman now," Mr. Morison said in a recent interview. "That's saying something." In some ways, the turn of events has been a blessing in disguise, he said. But under his new image as an earnest small-town banker lie bitter memories.

"The last couple of years were not fun," the banker said. In his final Bank of Boston days, the pressure to fix loan problems mounted. "The whole thing was very stressful."

"He was in a tough spot," said Nancy Bush, an analyst for Brown Brothers Harriman in New York.

Bearing Responsibility

Mr. Morison was well known and highly regarded in lending circles. He tackled his job with energy and imagination and executed aggressive lending policies that were strongly endorsed by the Boston bank, analysts say.

"If he's angry, he's got every right to be," Ms. Bush said. Though Mr. Morison was "not the cause of all the problems," he must bear some responsibility for those that developed on his watch, she said.

The Unraveling

Mr. Morison acknowledges some mistakes. "We were much too aggressive at the end of the cycle," he said -- the years after the stock market crash of 1987, when he led the bank into several large highly leveraged transactions.

The unraveling began in July 1989, when within 10 days Bank of Boston suspended or withdrew three commitments to provide financing for leveraged buyouts. By the following year, 6.7% of the bank's $4.2 billion in HLT loans were not accruing interest.

Many former colleagues remember him as a popular officer who became a fish out of water in the economic downturn. "He was the perfect banker for the late '70s and the '80s," said a former colleague. "He was a player, and during his tenure, there was none better. But he wouldn't like the current environment. He's better off at the First of Ipswich."

The Art of Lending

Known as Lin, Mr. Morison joined Bank of Boston in 1965. A tall, athletic man who still plays golf with several Bank of Boston officers, he became a leader during the bank's expansionary times.

In a statement on Mr. Morison's departure, chairman Ira Stepanian called him a "mentor to many of our current lending officers."

Indeed, most of the bank's lenders took Mr. Morison's seminar on the art of lending aggressively. One officer who heard the drill recalls his approach:

"He tried to get us to think like the treasurer of a corporation. He wanted us to stand in their shoes and see when they would need to build equity or issue more debt."

As a result, Mr. Morison's charges were expected to know the financial condition of many area companies and make calls on them at the appropriate time.

A Lifeline from Ipswich

When the regional economy tanked, Mr. Morison knew his days were numbered. It was during this stressful period that he first came into contact with the First National Bank of Ipswich.

Vacationing at a ski resort with his wife, Mr. Morison said he was approached by Ipswich's chairman. Over drinks by a fire, the chairman said he was ready to retire and inquired whether Mr. Morison would be interested in replacing him. He said the directors were looking for a top-ranked banker to see First National through the tough days ahead.

Mr. Morison declined the invitation. But eight weeks after leaving Bank of Boston, he said, he "began turning on the jets. "I even looked in New York."

Finally, he put in a call to First of Ipswich -- and discovered that the top job was his, if he wanted it.

The job involved a big pay cut, Mr. Morison said, but he declined to elaborate.

|There's a Lot to Do Here'

"I consider myself the lucky one," he beamed. "It may be that I've found a job that suits me perfectly. After all, there's a lot to do here."

Last year, the bank's small loan portfolio began accruing problem credits that led to a loss of $1.2 million. In the first quarter, the bank omitted its dividend to shareholders.

Mr. Morison's solution for the mounting real estate loan problems are similar to his former employer's: tighten lending standards and build reserves.

"You can see trouble a lot earlier here, because you know everyone one," he said, comparing the situation to Bank of Boston's. "That's the best thing about this job: It's immediate."

Checking His List

Still an early riser, he is the first to arrive at the five-branch bank, at 7 a.m. After his eight-minute drive from home, he hops out of his Audi 90 and unlocks the door.

Instead of hitting the phones and pumping chief financial officers for new business, Mr. Morison kicks off the day by examining an "early warning" list of loan customers who have begun to bounce checks. He spends his evenings visiting Rotary clubs and dining in restaurants that are borrow money from First National Bank of Ipswich.

Bank of Boston's Battle

Meanwhile, his old employer is facing the toughest battle of its 200-year history.

"In addition to our corporate woes," said Richard Clark, the senior credit officer for New England at Bank of Boston, "we're seeing the second half of the downward spiral. The first half was due to real estate stupidity. The second has real estate woes compounded with layoffs in the high-tech industries [and] the banking and finance companies."

With no upturn in sight, many more bankers face choices similar to those of Lin Morison.

What if Terrence Murray, chairman of Fleet/Norstar Financial Group Inc., called to offer him a post at the freshly acquired units of Bank of New England?

"I've thought of that," Mr. Morison said. "But I have plenty of challenges right here."

But after those, he added with a smile, "who knows?"

PHOTO : T. LINCOLN MORISON, former Bank of Boston star, heads tiny First National of Ipswich, Mass.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.