Mercantile Bancorp. has revamped its management structure as part of a cost-cutting drive.

The St. Louis company recently reorganized along three lines of business: consumer lending, commercial lending, and private banking, said chief financial officer John McClure.

The move, the latest in a series of structural shifts at the $36 billion-asset company, will eliminate management levels and thus trim costs, Mr. McClure said. Previously, all banking operations were grouped together, with mortgage lending and private banking as separate units.

The changes stem from a broad plan to eliminate 1,300 jobs, about 11% of the company's staff. Announced in January, the plan aims to add $25 million to annual earnings beginning this year.

Dubbed Profit 2000, the plan includes 11 separate steps to cutting costs. It was prompted by a PricewaterhouseCoopers analysis performed last year.

John P. Dubinsky, who remains chief executive officer of all banking operations, will directly oversee commercial banking. John Elmore, who was chief executive officer of specialty consumer lending, now heads consumer banking, under Mr. Dubinsky. John Q. Arnold, vice chairman, will continue to run the private banking and investments group.

Mr. Dubinsky and Mr. Elmore are leading much of the restructuring program. Mr. Dubinsky was already the No. 2 executive at Mercantile, behind chairman and chief executive officer Thomas H. Jacobsen. The new structure, however, has elevated the status of Mr. Elmore, observers say.

"It doesn't look like anyone got pushed out, but there is a new management structure in place," said Diana Yates, an analyst with A.G. Edwards & Sons Inc.

Mr. McClure, however, said Mr. Elmore's new role does not signify "a change in direction. This is evolutionary."

Mr. Elmore and Mr. Dubinsky both joined Mercantile as the result of acquisitions. Mr. Elmore formerly ran the Lawrence, Kan., bank of Kansas City-based MidAmerican Corp., which Mercantile bought in 1993. Mr. Dubinsky was the chief executive officer of St. Louis-based Mark Twain Bancshares, which Mercantile acquired in 1997.

Mr. McClure said the cost-cutting is proceeding on schedule and that company is also looking to boost revenue. He stressed that increasing the revenue is the company's "most important objective."

As part of the cost plan, the company is standardizing underwriting, processing, and technology for its mortgage lending business, which now falls under consumer banking.

Mercantile also is streamlining customer service, credit and debit card operations, check handling, and financial reporting functions. It is reviewing its advertising and promotions budget. And the company is considering selling some buildings and leasing office space from the new owners.

Ms. Yates of A.G. Edwards said Mercantile has its work cut out for itself. "I think it's all execution now," she said. "I still don't see how they're going to get $25 million out of all this."

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