Nobody ever said it would be easy to blend the street-smart culture of a mortgage banking firm with the staid ways of a commercial bank. Arthur D. Ringwald should know. As head of residential lending at BankAmerica Corp., Mr. Ringwald has guided the second-largest U.S. bank onto the mortgage acquisition trail. In March 1994, the San Francisco company bought United Mortgage Corp., Minneapolis, for more than $100 million. Then BankAmerica expanded its reach to the East Coast, buying Arbor National Mortgage, Westbury, N.Y., for about $118 million. The deals helped push BankAmerica's servicing portfolio to $64.7 billion by yearend. Mr. Ringwald, 49, joined BankAmerica in December 1993, after a four-year stint at Sears Mortgage Corp. He recently talked with American Banker about the challenges of making the acquisitions work.

Q.: What are the issues surrounding acquisitions?

RINGWALD: The acquisition issue that a number of us face is: How do you integrate the mentality of entrepreneurial people into the more managerial culture of a bank?

I think that we feel good about our acquisitions. One of the acid tests of that is that we have virtually no turnover, because we have been very attentive to their product.

We brought portfolio ARM products out there. They will now be competitive in all interest rate cycles.

Q.: How about an example of the difficulties in integrating a mortgage bank?

RINGWALD: Some of this may sound silly, but it used to be that if a mortgage banker wanted to buy a box at the Chicago Bulls stadium, he didn't have to talk to somebody about that. Or if he wanted to fly his top loan officer to Florida for a weekend and rent a yacht and a limo and all that stuff.

The banks wouldn't agree with that approach. We have a more structured approach - yes, there should be sales incentives, and yes, there should be awards and all that stuff, but there are ... rational, reasonable checks around that.

I think the nonregulated entities do not focus nearly enough effort and time on compliance issues. For example, you have to issue the good-faith estimate within three days of receiving the completed application. We monitor that very, very carefully.

Or take bank audits. If you've never seen an auditor for five years, and a normal audit group shows up - and there are two or three people who spend a week in your branch - you might consider that an infringement on your turf.

Q.: How important are compensation issues?

RINGWALD: My sense is our compensation is very competitive.

You know, people say big banks don't want to pay; it's sort of the wisdom on the street. I have not found that.

What I would say is this: In the (mortgage) business, I think there has historically been a movement to paying for pure production. I would say that banks are more sophisticated; they compensate not only for pure production, but for the quality of production.

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