AKRON, Ohio -- Howard L. Flood has assembled a cluster of high-performing banks and thrifts into $4 billion-asset First Bancorporation of Ohio.

But that's no small feat as this David has held its own against Ohio's mammoth banking companies from Banc One Corp. to National City and Society Corp.

Operating in the shadow of these giants, his array of super community banks is fueling profits at the holding company. The company earned $41.6 million in the first nine months of 1993 - a robust 1.42% annualized return on average assets.

But that doesn't mean Mr. Flood can rest easy.

Low Profile

At a time when his bigger competitors are stamping their logos on credit cards and mutual funds and saturating the media with supporting advertisements, most customers of Mr. Flood's subsidiary banks don't even know Akron-based First Bancorp. exists.

At a time when loan diversification and fee income are top industry priorities, Mr. Flood has nearly 60% of his loan portfolio plowed into realty-related credits, and analysts say he is somewhat behind the curve in developing service revenues.

And Mr. Flood went nearly three years without making an acquisition as larger rivals prevailed at regional bank auctions. He pursued Ohio Bancorp, Youngstown, only to see it fall into the grasp of National City Corp. Negotiations for a bank in Erie, Pa., ended when the target hitched up with Mellon Bank Corp.

Seen as Takeover Target

Take prospects for slow economic growth and First Bancorp.'s digestible size and attractive markets, and what you get is a company destined for the auction block, some analysts contend.

"Looking out five years, I would be surprised if First Bancorp. still has its independence," said Fred Cummings, a banking analyst with McDonald & Co., Cleveland.

In 1991, Mr. Flood got a golden parachute potentially worth more than $1 million if First Bancorp. gets bought out. Just last week, the company's directors concocted a poison pill giving shareholders lucrative options on the stock of any prospective hostile acquirer.

But the executive who occasionally auctions rides in his private Cessna at charity fund-raisers, says he is focused on tweaking the performances of his community banks, and on making acquisitions himself.

Recent Deal

No stranger to thrift acquisitions, Mr. Flood in late September agreed to buy Great Northern Financial Corp., parent of a $384 million-asset thrift based in neighboring Barberton.

Though he will swallow a $5.5 million after-tax charge on a deal worth roughly $50 million, Mr. Flood expects to slash up to three-fourths of the unit's operating expenses, for yearly savings of up to $4.5 million.

He is "very much interested" in going on a shopping spree. On average, he has bought institutions delivering returns on assets of about 0.84% and boosted their returns to 1.20%.

These successful surgeries flow from Mr. Flood's super community banking strategy, in which local charters and identities are preserved and back-office and administrative functions are centralized.

Single Data Center

For example, all the data processing for the roughly 600,000 customer accounts at his company is handled from a single site in Akron. Yet, customers at subsidiaries such as the First National Bank in Massillon and Peoples Savings Bank in Ashtabula, still interact with local directors.

"Our approach is to maximize both employee and management visibility, and the directors' influence in the communities," said Mr. Flood. "This cements customer relationships, which often go back 20 or 30 years."

Where decentralized arrangements often fail, as many rueful bankers attest, is in the maintenance of underwriting standards.

Thomas Theobald, chairman of Continental Bank Corp., once commented that loan officers carry "armed nuclear weapons" - meaning the rapidity with which they can book loans carries inherent dangers.

Problem Assets in Check

But Mr. Flood so far has mastered this aspect of decentralization. At a slender 1.08% of gross loans, his company's low concentration of problem assets is exemplary.

Of course, all these positives don't constitute a guarantee of continued success, and Mr. Flood is at work on several franchise refinements.

The executive concedes that few customers know of First Bancorp., and he says some marketing efforts might be developed if the parent company's name is displayed alongside those of its subsidiaries.

A single television market encompasses the 17 counties in which First Bancorp. operates, he says, and the company is considering how it might blend TV ads and branded proprietary products to boost revenues at subsidiaries.

Separately, Mr. Flood has filed applications to place his thrift subsidiaries under national bank charters. This will free the units from requirements that they maintain outsized concentrations of realty assets.

Dividend Increased

Sending a message about his enthusiastic outlook for First Bancorp., Mr. Flood recently boosted the common dividend and declared a stock split.

Some analysts speculate there is more at work in the company's climbing stock multiple than performance fundamentals, saying takeover speculation might also explain part of the rise.

Many observers, and Mr. Flood himself, say the company's healthy operations and northeastern Ohio locale heighten its visibility as a potential takeover play. His company last week said "encouraging a potential acquirer to negotiate with the board of directors" was its rationale in adopting a poison pill rights offering.

Executives of Detroit-based NBD Bancorp for months have been publicity voicing a desire to boost the company's Ohio operations, and NBD is only one of the powerhouse Midwest banking companies that have the wherewithal to make a move on First Bancorp.

But Mr. Flood emphasized that no talks are in progress

And in an interview a few days before, Mr. Flood said his company's high performance and solid community market shares means "a potential buyer has to consider a very, very, very rich premium," intimating it might be difficult for an acquirer to pull off a deal on favorable terms.

In the short run, that leaves Mr. Flood right where he loves to be, which is running his own show.

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