The New England recession has become Lawrence K. Fish's best friend.
The man who fought valiantly but unsuccessfully to rescue Boston's Bank of New England Corp. two years ago now presides over a much smaller company in neighboring Rhode Island and sees only opportunity.
Mr. Fish, chairman and chief executive of Providence-based Citizens Financial Group, says he is uniquely positioned to pick up banks and thrifts in the region at bargain-basement prices.
Citizens, which has $4.5 billion of assets, has been given the mandate by its parent, Royal Bank of Scotland Group, to more than double its $4.5 billion of assets to $10 billion by the end of 1995. Royal Bank, $60 billion-asset company, bought Citizens in 1988.
Mr. Fish, who took the top posts at the bank in 1992, has been moving aggressively. In the past two months, Citizens announced the purchase of Boston Five Bancorp and New England Savings Bank, a failed Connecticut thrift. The two will add $2.5 billion of assets.
With $3 billion more to go to make his quota, Mr. Fish says he has identified 36 banks in Connecticut and Massachusetts -- with assets between $500 million and $3 billion -- what are receptive to takeover proposals.
Driving the expansion strategy is Mr. Fish's belief Citizens can't get much bigger in its home state.
The company command a 25% share of Rhode Island's deposits and 23% of its commercial loan market, second only to its Providence neighbor Fleet Financial Group.
"We're maxed out in Rhode Island," Mr. Fish said. "We could tread water, but if we want to grow, we need to acquire."
That's refreshing change for the 48-year-old executive, who has spent his recent career trying to resuscitate dying institutions.
Leaving Bank of Boston Corp. in 1988 after being passed over for the presidency, he went to Beverly Hills in an ill-fated effort to clean up the junk bondladen thrift portfolio of Columbia Savings and Loan Association. One year later, he was recruited as chief executive of Bank of New England.
Mr. Fish's risks were minimal. If he had succeeded in Beverly Hills or Boston he would have been crowned a hero. But since the two companies had dug their graves long before Mr. Fish arrived, he was immune to charges of failure.
A Safer Route
When the Citizens offer came, he chose it over richerbut riskier positions at California's faltering HomeFed Corp. and Washington-based First American Bankshsares, which was entangled in the Bank of Credit and Commerce International scandal.
To be sure, Citizens is smaller by half than any other financial institution that Mr. Fish has worked at and it's not followed closely by the media or Wall Street. That may crimp the gregarious executive's operating style.
But friends say Mr. Fish has a penchant for taking the offbeat path and making it work for him.
After graduating from Harvard Business School, Mr. Fish packed his bags not for Wall Street but for India, where he studied Zen Buddhism and yoga in an ashram. He returned to carve out a stellar career at Bank of Boston, culminating with the title of group executive at the relatively tender age of 43.
After Bank of New England was seized, Mr. Fish donated his time to a community center in a poor Boston neighbohood, where he spent one month cleaning bathrooms, scrubbing floors, and serving food in a soup kitchen.
In moving to Citizens, "Larry was driven by two things," said longtime friend Lou Burnett, a principal of Secura-Burnett Partners, a San Francisco executive search and financial consulting firm. "He like the Royal's management team and . . . he [wanted]to be a part of New England. It wasn't money or status, because other banks offered more."
Mr. Fish summed up his move concisely: "I love this part of the country, I love being chief executive, and I wanted a situation that was clean [where] we could grow.
"Now you take those three things . . . and there was only one like it in New England, and I was lucky enough to find it."
Mr. Fish also may be enjoying snubbing his nose at Bank of Boston through the Boston Five purchase. Although he looks back fondly on his 18-year career there, friends say he is still smarting from being passed over for the president's post in 1987.
Task Won't Be Easy
None of this, of course, ensures that he will succeed. Mr. Fish is up against some tough competition, and he dances to the tune of overseas masters. Though Royal Bank has given him free rein to date, overseas masters can be fickle. If the European economy remains sluggish, the Scots could be more controlling down the road.
Meanwhile, neighboring behemoths like Fleet and its $46 billion of assets, Bank of Boston, with $31.5 billion, and Shawmut National Corp., with $25 billion, are scouting the same turf as Citizens. And companies to the south, such as New Jersey's First Fidelity Bancorp. and several New York City-based banks, are eager to expand into southern New England.
Neither the competition nor New England's sluggish economy is bothering Mr. Fish, however. "I don't want to sound cavalier," he said, "but who [in New England] has more money than us."
Can Afford to Be Choosy
He quickly adds that he will not be carried away by his bankroll or ambition. Citizens can walk away from deals that are too expensive because it has no much to choose from, he said.
And though he acknowledges that the economic outlook in New England remains gloomy, he maintains that "banks do just fine if they're careful about the companies they lend money to and stick to their knitting."
Citizens has reported only modest profits in recent years, but has outperformed most of its New England peers. It earned $7.5 million in its fiscal second quarter ending March 31, up 142% from the year earlier quarter, and boasts a 6.9% tangible capital ratio.
Meanwhile, Mr. Fish is putting his personal stamp on the bank's management by recruiting several former associates. They include Citizen's retail banking chief, Mark Formica, and its new head of credit policy, Stgephen Steinour.
But Mr. Fish insists he will not impose an alien culture on the company.
In all of his jobs, he has been a skilled internal communicator, putting a premium on spelling out his strategies to employees. Mr. Fish says he spends 30 minutes a day wandering the halls of the bank's headquarters and operations center.
He calls a branch manager every day, sends employees a weekly newsletter, and sends a letter to each employee of a newly acquired company spelling out his plans.
"We believe that companies can handle enormous amounts of change if they feel they are being told what's going on," he said.