An Ohio community banking company is getting into the old-line business of private banking in a newfangled way.
Mid Am Inc. of Bowling Green chartered a new national bank last week to serve wealthy clients. But instead of launching its own trust administration business or hiring a stable of in-house money managers, the bank is relying on outsiders to provide those services.
"We simply went out and hired the best," said David R. Francisco, president of $2.2 billion-asset Mid Am Inc. "It's the first time in my career I can honestly look at clients and say, 'Nobody can do it better.'"
Cleveland-based Mid Am Private Trust is structured to resemble family offices, which are set up by wealthy families to oversee the management of all aspects of their personal finances. The unit, initially targeting clients with at least $500,000 to invest, is offering five common trust funds and five commingled funds managed by seven different money management firms.
The new entity is headed by Donald Southwick, who had been running one of Mid Am's community banks, AmeriFirst Bank. Its formation is part of a larger plan at Mid Am to get out of costly businesses and enter more profitable ones.
"Like everybody else we're trying to avoid commodity business and focus on fee-generating business," Mr. Francisco said.
Mid Am bought a mortgage company last month. Last year it agreed to sell $100 million in Ohio retail deposits to Star Banc Corp. after buying a string of debt collection agencies. In 1995, it acquired an Ohio brokerage.
Mid Am's total noninterest income increased 59%, to $16.1 million, in 1996.
Mr. Francisco hopes that by retaining well-known money managers, Mid Am will get a jump-start in the wealth management business.
The managers it is working with are: Equitable Asset Management, Atlanta; HGK Asset Management, New York; Income Research and Management, Boston; Invista Capital Management, Des Moines; Peachtree Asset Management, Atlanta; Thomson Horstmann & Bryant, Saddle Brook, N.J.; and Trinity Investment Management Corp., Boston.