After making his fortune in California as a big-bank efficiency expert, Jerry A. Grundhofer is aiming for growth at a sleek midwestern company.
Mr. Grundhofer, 48, is the new chief executive of Cincinnati-based Star Banc Corp., a post he took only weeks after pulling the rip cord on a $2 million golden parachute from BankAmerica Corp. He had been a vice chairman at the San Francisco behemoth, which last year swallowed his old company, Security Pacific Corp.
Leaping from a giant with $181 billion of assets to a regional with $7.7 billion is not as extreme as it sounds, Mr. Grundhofer said in recent interview. He described himself as a "relentlessly" hands-on manager whose style is best suited to the slender bureaucracy of a smaller company.
People close to Mr. Grundhofer said his move was not surprising. He was chagrined that Security Pacific's credit woes forced it to accept BankAmerica's takeover offer, and he longed to run his own show.
While acknowledging Mr. Grundhofer's sterling credentials, analysts are taking a wait-and-see attitude about whether he can significantly improve an already solid operation.
The ferocious cost-cutting discipline on which he built his reputation can sustain Star Banc but not take it to new heights, they said. (The company is coming off a year-long efficiency crusade that lowered its first-quarter ratio of operating expenses to operating income to a commendable 56.4%.)
"Star already is a fine operation, so it's going to take growth to pique my interest," said Fred Cummings, an analyst with McDonald & Co. in Cleveland.
Mr. Grundhofer said he is up to the challenge. "It is a matter of holding more people accountable for more results, both in sales and expense control," he said, adding that he also would be scouting for acquisitions.
The younger half of a famous banking team - his older brother, John, is chief of Minnesota's First Bank System Inc. -- the new Star Banc executive earned his spurs as a retail branch system specialist. He rose to prominence at Wells Fargo & Co. before moving to Security Pacific.
In the Hot Seat
The Los Angeles native is starting with a clean slate at Star. The bank has exemplary credit quality and capitalization, and it racked up a healthy 1.35% return on assets in the first quarter.
Nevertheless, Mr. Grundhofer is occupying a hot seat.
Oliver W. Waddell, Star Banc's departing chief executive, endured withering criticism on Wall Street last year for rejecting a buyout offer from its Cincinnati rival, Fifth Third Bancorp, one of the nation's highest-performing banks.
Still, Mr. Grundhofer is eager to take up where he predecessor left off in preserving Star Bank's independence. The executive's retirement from BankAmerica lasted only two months. "I don't do well just sitting around," he said.