Commercial Federal Corp. says it is undergoing a cultural revolution.
The $13 billion-asset Omaha thrift company has infused its management with senior executives from outside, reduced its balance sheet by selling underperforming assets, and overhauled its technology platform as it restructures for a shift from the thrift business to commercial lending.
Since last summer, it has also begun a push to create a sales culture through a program called Promoting Rapid Improvement to Delivering Excellence, or Pride, for short. The program was begun by David Fisher, the chief financial officer who came to Commercial Federal last summer from Grand Rapids, Mich.-based Old Kent Financial Corp.
The company has 18 initiatives inspired by the Pride program, including the technology upgrading, Mr. Fisher said in a telephone interview. We are trying to be diligent and know where we are going, he said. Pride, we hope, is in all phases of the business. It is a whole thought process.
At the companys annual shareholder meeting this week, executives insisted that Commercial Federal is turning the corner and becoming a very different company from the one that struggled 18 months ago with declining earnings and an impatient investment community eager to see it sold.
William Fitzgerald, chief executive officer, said at the meeting Tuesday that he feels comfortable with analysts expectation of $1.75 earnings per share this year. Commercial Federal is not the same company it was one year ago, he said. We have sharpened our focus.
The company plans to buy back five million shares to help boost capital. We are poised for a solid financial performance, Mr. Fitzgerald said. We have molded a new culture, which includes improving earnings and developing commercial lending, he said.
Changing the culture from thrift to commercial bank will be a challenge, said Paul Miller, an analyst at Friedman Billings Ramsey & Co. You have to be more of an outwardly salesman type in those branches, he said. It is a different mindset.
The hiring last month of Michigan National Corp.s Robert J. Hutchinson to be president and chief operating officer is the first step in changing the thrift culture, Mr. Miller said. They have hired the right people. Their challenge is to get it done, he said.
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