Michigan's mortgage powerhouse, Standard Federal Bank, outlent the California giants last year to become the biggest thrift originator of home loans.

But though its lending success has been remarkable - the $15 billion- asset institution beat out California thrifts up to three times its size - it also may have made itself a far more attractive takeover target for other ambitious institutions.

After all, for all its mortgage prowess, Standard Federal faces the same existential dilemma as other thrifts in the 1990s: How do you make money now that banks, mortgage banks, and the secondary market agencies Fannie Mae and Freddie Mac dominate the home-loan business?

That dilemma, as well as the impending departure of longtime chairman Thomas Ricketts, eventually could drive Standard Fed into the willing arms of a larger commercial bank, analysts believe.

Standard Federal originated $7.5 billion in loans in 1995, a whopping 71% increase over the 1994 level. This volume made it the nation's 11th- largest mortgage originator. It was trailed by $44 billion-asset thrift Great Western Bank, Chatsworth, which made $7.3 billion in home loans, and $50 billion-asset thrift Home Savings Bank, Irwindale, which made $6.5 billion. Great Western ranked 13th, and Home Savings 16th.

Standard Federal pulled off this coup by quickly leveraging its 1993 purchase of a small Michigan thrift, Interfirst Bankcorp, Ann Arbor. Standard Fed expanded Interfirst's wholesale network of mortgage lenders and brokers in time to cash in on last year's fixed-rate boom.

The large California thrifts have tried to pursue a similar strategy, but with weaker results. Like mortgage bankers, Standard Fed sold most of its fixed-rate loans to the secondary market.

By and large, mortgage lending and investment just haven't yielded the 15% return on equity investors demand. Standard Fed's return on equity has averaged 14% in the past few years.

In a bid to bolster earnings, the thrift has for some years tried to mine its customers for more than just mortgages, selling them checking accounts, home equity loans, and other high-yielding products. Like the California thrifts, it is trying to catch up with strong bank rivals - in this case the likes of First Chicago NBD and Detroit's Comerica Inc.

That makes Standard Federal vulnerable to bank acquirers better equipped to dig deeper into the pockets of Standard Federal's mortgage customers, according to analyst Michael A. Moran of Roney & Co., Detroit.

Moreover, the fact that Mr. Ricketts turned 65 in March has led many to see the thrift as a prime takeover target, Mr. Moran said.

"Tom is Standard Federal and Standard Federal is Tom," the analyst said. "Tom lives, eats, and breathes that organization."

In December 1997, Mr. Ricketts will relinquish the day-to-day operation of the thrift and his title as chief executive officer to one of his lieutenants. He will remain chairman of the board.

Investors identify the thrift so closely with Mr. Ricketts that many feel no one can fill his large shoes, Mr. Moran said. Takeover rumors also are fueled by the perception that Mr. Ricketts would be more willing to cash out now than the younger team that would take over.

Analyst Thomas O'Donnell of Smith Barney agreed.

"Until quite recently, Standard was wrongly considered the Rodney Dangerfield of savings and loans - this big, amorphous midwestern company," Mr. O'Donnell said.

He said Mr. Ricketts had turned that perception around, and rightly or wrongly, his impending departure spurs takeover talk among investors.

Mr. Moran said Standard Fed's unchallenged grip on Michigan's homeowners could appeal to banks with a strong presence in the state, such as Comerica, First Chicago NBD, and Michigan National Bank, Farmington Hills.

Alternatively, out-of-state institutions such as NationsBank Corp., Norwest Corp., and BankAmerica Corp. could use Standard Federal to get a foothold in Michigan, Mr. Moran said.

For his part, Mr. Ricketts dismisses such talk as the work of investment bankers trolling for business. "All we can say on that subject is we're going to act in the shareholders' best interests," he said in an interview.

"It's not now a one-man shop, and it's not going to be," he said. "We are loaded with talent."

A 40-year Standard Federal veteran, Mr. Ricketts has the calm, solid air of a prosperous man of action. He has plotted the thrift's rise from a small Detroit home loan lender to a national lender.

President since 1973, and chairman since 1981, Mr. Ricketts methodically acquired small thrifts in other Michigan markets, and then in Indiana, Ohio, and most recently, Chicago. Standard's purchase of $1.9 billion-asset Bell Bancorp. closed this month.

Sitting in his sparsely furnished office, with Troy's new subdivisions and one of metropolitan Detroit's ritziest malls in view, Mr. Ricketts reflected on Standard's history.

The thrift was founded in 1893, and for a long time followed the bread- and-butter formula of taking in CDs and making home loans to "average people," he said.

At the end of the World War II, Mr. Ricketts said, "we were still extremely small. We had just about three offices, but all in the city."

When Detroit's residents began their mass exodus from the city a generation ago, Standard Fed moved its headquarters to the suburbs. Six years ago, it built itself a new home in Troy. The glass, chrome and granite edifice has a state-of-the-art heating system that uses heat from the people and computers in the building to warm the air.

Its stark, modernistic interior is graced with works by such contemporary American artists as Robert Motherwell, Frank Stella, and Andy Warhol. The thrift didn't want the traditional subjects of bank paintings - horses and the like - on its walls, Mr. Ricketts said on a tour of the building.

To keep the building pristine, employees are prohibited from eating - or even sipping a cup of coffee - at their desks. Who wants to do business with someone who has potato chip grease on their hands, Mr. Ricketts asked.

Mr. Ricketts said Standard is likely to remain in the Midwest, where it understands the frugal nature its residents inherited from their European immigrant forebears.

In its 1993 purchase of Interfirst Bankcorp, the Ann Arbor wholesale lender, Standard was not looking just for large volumes of fixed-rate loans to sell to the secondary market; it also sought adjustable-rate mortgages for its portfolio.

Because of relatively low home prices that fall under the loan ceilings of Fannie Mae and Freddie Mac, midwestern homeowners have never been partial to ARMs. Chief financial officer Joseph E. Krul said Interfirst's national network has given Standard Federal access to more of those loans, allowing it to cut back on mortgages with fixed rates of 15 and 30 years.

As of May 31, suchloans made up 40% of Standard Fed's total assets, Mr. Krul said.

At least one analyst thinks Standard Federal's 15- and 30-year holdings, as well 3- and 5-year balloons, render it too vulnerable to rising interest rates.

"Over the last 10 years, interest rates have fallen from 10% to 7%. That has been a big help for a company that had a predominantly fixed-rate asset portfolio," noted analyst Jonathan E. Gray of Sanford C. Bernstein & Co.

"If over the next five years interest rates trend higher, their heavy deployment of fixed-rate assets will be an albatross about their neck," Mr. Gray said.

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