Va.-It's easy to miss Signet Banking Corp.'s corporate office building. The only sign identifying its headquarters is a modest logo stenciled over the doorway.

Inside, well-worn magenta carpeting and fingerprint-smeared glass doors lead to the elevators. Save for the odd hum of an automated teller machine in a corner of the lobby, there is little to hint of a regional banking company.

The $12 billion-asset Signet's understated premises are emblematic of a corporate strategy that has little place for traditional bricks and mortar. The management team is steering Signet down a course that uses data base, direct mail, telephone, and electronic initiatives to reach out to retail and commercial customers nationwide.

"We believe direct mail, along with the telephone, represent the two strongest remote delivery platforms you can have," said T. Gaylon Layfield 3d, president and chief operating officer. "Given customer preferences and technology, the brick-and-mortar delivery channel is not a necessary element of growth for the future."

In the midst of a massive restructuring that will lead to the shuttering of 20% of its branch offices, Signet nonetheless wants to keep its mid- Atlantic operation growing through a scaled-down branch network in Virginia, Maryland, and the District of Columbia, which account for more than 75% of total revenue.

But Malcolm S. McDonald, chairman and chief executive officer, is trying to get Signet to a point at which more than 50% of revenue comes through sales to retail and commercial customers outside the region.

"Our strategies are designed to lead us to become a customer-focused, information-based, national financial services company," he said. "The growth in the national markets will be faster than the growth in the mid- Atlantic markets."

Signet is hardly the only bank with coast-to-coast aspirations. With interstate banking authority, rampant consolidation, and increasing competition, national growth has become a front-burner issue for many regional banking companies.

NationsBank Corp., for example, has been on a breakneck acquisition pace in recent years, effectively buying its way across the country.

Barnett Banks Inc., on the other hand, has pulled back from out-of-state operations in favor of purchases of consumer finance ventures. First Union Corp. is one of many major banking companies pushing for national growth through the capital markets and capital management business.

But Signet stands apart from the crowd. While similar-sized competitors strive to remain independent by buying and building branches, Signet is selling and closing them.

And as competitors roll out expensive advertising campaigns, Signet prefers to spend its marketing money on millions of direct mail pieces.

John W. Coffey, an analyst at Robinson-Humphrey Co., gives Signet credit for not taking the beaten path.

"The nationwide mail-out and data mining strategy is fairly unique," he said. "No one is really relying on that to the extent that Signet is."

But he is skeptical about the ultimate outcome.

"Most investors are adopting a wait-and-see attitude," he said. "There is a significant challenge ahead."

To win over analysts, Signet must find a way to boost earnings. Though top-line revenue growth has been strong, earnings trends have lagged those of the competition.

Excluding a $35 million fraud-related loss and gains from Signet's onetime credit card cash cow-Capital One Financial Corp., which the company spun off in 1995-Signet reported a mere 6% gain in net income in 1996 over 1995. Earnings per share grew just 4%.

The 1996 return on assets of 1.10% and return on equity of 14.35% were below par.

Signet attributes its earnings troubles to an inefficient structure that needed to be retooled for the national growth strategy.

The company expects to boost returns substantially after completing the streamlining and reorganization now under way, which management estimates will save $58 million annually.

If all goes as planned, Signet will show a return on equity of 17% to 20% and a 15% jump in earnings per share by the end of 1998, Mr. McDonald said.

R. Harold Schroeder of Keefe, Bruyette & Woods Inc. applauded the cost- trimming, but he, like other analysts, said he is doubtful about the strategy.

He sees the shedding of branches as eroding the value of the company's longstanding Virginia franchise. Moreover, Signet's "fairly unproven national strategy" makes it a less attractive candidate for investors than many other regional banking companies, Mr. Schroeder wrote in a recent report.

Signet's management is undeterred. Best known for the loan-by-check product it started pushing nationally three years ago, and for trying to build on data base techniques pioneered by the credit card unit, Signet is now mailing out millions of direct mail pieces a year and selling a slew of retail products, including home equity loans, student loans, and a money market account with above-average returns.

The going has been slow, but encouraging.

The deposit account has attracted more than $550 million in the past year, said Mr. Layfield.

The student loan portfolio has $1.1 billion of managed assets.

After cleaning up a nasty loss experience with loan-by-check offers mailed out in 1994, Signet now has $950 million of outstandings with a tolerable 4.5% loss ratio in that portfolio, said Mr. Layfield.

The company is also pushing for more national business on the commercial side. Teams of "industry specialists" are traveling the country building relationships. A media-communications group has brought in about $550 million of loans, about half from outside the mid-Atlantic region.

And Signet's $1 billion equipment leasing portfolio consists largely of customers from outside its geographical footprint, according to bank officials.

"We've made a lot of progress," said Mr. Layfield.

The key to making it all work is a sophisticated information system that captures not only customer response patterns but also data about income, geography, and other demographics.

The restructuring program calls for an additional $41 million of technology that will further Signet's ability to gain access to that information easily and merge it into other business-line data bases such as trust and mortgage, said Mr. McDonald.

When a customer in California, for instance, calls in about a product offering received in the mail, a Signet customer service representative now must thumb through large manuals to find a reference for the particular solicitation. After the changes are adopted, the information will be available at the touch of a computer key.

"It takes a lot of infrastructure-building and a lot of learning to do this," said Mr. Layfield. "This is a major undertaking."

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