The advertisements for his consulting firm proclaim Alex Sheshunoff to be "the first and last name in banking."
Rivals may protest, but there is no denying that Alex Sheshunoff Management Services Inc. is a pervasive force in the community bank consulting market.
Though the company has 80 employees, including 25 consultants and nine investment bankers, Mr. Sheshunoff is its dominating force.
"The genius of his company is Alex Sheshunoff's personality," says client William T. McConnell, president of Park National Corp., Newark, Ohio. "It's impossible not to like him."
Sheshunoff Management Services advises 1,700 active clients on everything from boosting revenues to finding merger partners. The company has no affiliation with Sheshunoff Information Services, which, like American Banker, is part of Thomson Financial Services.
Like many customers, John R. Madden, president of First National Bank of LaGrange, Ill., has trouble counting how many times he has used Sheshunoff Management Services.
The consultant's employee compensation plan, loan office integration process, and other strategic planning initiatives have helped the $167 million-asset bank best its rivals. First National's 1997 return on assets was 3.10%, and return on equity hit 31.99%, both double the national averages for commercial banks with $100 to $300 million of assets.
"I'd hate to think how much money we've spent over the years on them, but I'd hate to think how much money we've made-because then he'd want a piece of it," Mr. Madden says of Mr. Sheshunoff.
The firm may be best known, however, for running peer-group meetings that allow bankers to discuss common problems. The sessions, held three times a year at posh resorts like the Inn at Spanish Bay in Pebble Beach, Calif., cost $3,130 but come with a guarantee: absolute satisfaction or your money back.
Mr. Sheshunoff says clients expect results when they are paying top dollar. "One of our biggest challenges is to manage our clients' expectations," he says.
Though never a banker himself, Mr. Sheshunoff, 58, has been listening to bankers for a quarter-century, inviting some to spend a week with him at his summer home in Maine. "He's anxious to know what you know," says Mr. McConnell, who met Mr. Sheshunoff 15 years ago.
Unlike many who work with community bankers, Mr. Sheshunoff does not always take sides against big banks. Of the pending Citicorp/Travelers Group merger he simply says: "It looks great on paper, one-stop shopping. The real challenge is going to be the execution."
Five to 10 megabanks will come to dominate the business, he predicts, but community banks will always be in demand.
"There is a difference between bankers and money salesmen, and right now bankers are being measured as money salesmen," he says. "But what customers end up needing is a banker, someone who is intelligent and compassionate.
"Giving a young woman or a young man a chance doesn't fit into the Fair, Isaac model."
Mr. Sheshunoff says he expects competition to heat up among small banks as the industry consolidates and the gulf between community banks and megabanks widens.
To survive, he says, banks must distinguish themselves. "If community banks all say, 'We're friendly, we're hometown,' then every single bank will be saying the same thing."
Mr. Sheshunoff says community banks should focus on the niches they serve best, such as small-business lending, and promote whatever special products and services they offer.
Personalized customer service will always be important for community banks, even when they are competing with each other, Mr. Sheshunoff says. "All community banks say they have good customer service, but few of them have ever tried to measure it objectively."
Bankers should ask customers to rate their service, and should listen carefully to the responses, he says, because better service will help small banks protect their biggest asset: profitable customers.
Community bankers also need to identify their most profitable customers, such as small-business owners with high cash balances. Through basic account analysis, bankers should develop some general profiles of their best customers, Mr. Sheshunoff advises.
"Everyone has grown up wanting to bank the entire community, but you don't have to do that," he says.
Account managers should study the profiles so they can identify which customers could be sold what other products.
As for the customers who are not making money for the bank, Mr. Sheshunoff advises nudging these people to the competition.
He tailors his advice to banks of all sizes, from $160 million-asset Bank of Smithtown (N.Y.) to $18 billion-asset Union Planters, Memphis.
A. Hartie Spence says he called Sheshunoff Management Services five years ago to get a price quote for a staffing study on the bank he ran, Calcasieu Marine National Bank in Lake Charles, La.
The consultants recommended a complete restructuring, including trimming personnel by 25%.
The advice cost the $800 million-asset bank $1.2 million plus expenses, but the move paid for itself within a year. Mr. Spence says Calcasieu Marine brought in an additional $4 million in revenue and improved its return on assets from 1% to 1.44%.
The bank was so improved after the restructuring that it attracted a cash premium when sold in 1996-in a transaction handled by Sheshunoff investment bankers.
"They were a lot more expensive, but it was a killer deal," Mr. Spence says.
Now chairman and president of $1 billion-asset Hancock Bank of Louisiana in Baton Rouge, Mr. Spence says he still attends Sheshunoff's peer-group meetings.
Mr. Sheshunoff started the business in 1974 with his wife, Gabrielle. They were the first to publish government call report data and compare the performance of competing banks. The consulting business blossomed out of the publishing operation, as banks sought help in beating their rivals.
In 1988, while many of their friends in Texas were going broke, the Sheshunoffs sold their $70 million publishing company, Sheshunoff Information Services, to Thomson Corp.
They moved the remaining consulting business to one of Austin's premier office buildings, next door to the Four Seasons Hotel, where the couple lunch every day at their reserved table. The Sheshunoffs count Lady Bird Johnson and country songwriter Jerry Jeff Walker as friends.
Gabrielle Sheshunoff, a Montreal native and member of the city's deKuyper liquor family, runs the administrative side of the company, a role many bankers never see.
"I don't want to be in the spotlight," she says. "Alex gets along well with the bankers, and I stay here and run the business."
Some former employees describe the couple as difficult to work for because of their demanding nature and attention to detail. "There's a lot of looking over your back," says one former consultant. "They're not very forgiving of mistakes."
In the early 1980s about a half-dozen senior consultants quit the company. One of them, Bob Walters, sued, claiming the Sheshunoffs reneged on a promise to make him an owner of the company. The case was settled out of court.
"Their only incentive is you should all be thrilled that you're working with this guru," says a former employee who asked not to be named.
But even disgruntled former employees praise the Sheshunoffs as innovators in an industry that has gone through significant changes during their careers.
Mr. Sheshunoff says he and his wife are weighing whether to return to publishing now that a noncompete agreement with Thomson has expired.
A new marketing program is being initiated to promote some of the company's lesser-known services, such as technology planning.
"At the end of the day, bankers just want solutions to the challenges they face," Mr. Sheshunoff says.