In recent years, the nation's largest thrifts have succeeded in adopting many of the more profitable features of their commercial bank competitors.

Indeed, several of them, such as TCF Financial Corp. of Minneapolis and Charter One Financial Inc. of Cleveland, have gone a step further and become commercial bank holding companies through charter flips.

But several leading current and former thrift executives wonder aloud whether the rest of the savings and loan industry is reinventing itself fast enough.

"The whole industry hasn't moved very much,'' said Thomas S. Johnson, chairman of Greenpoint Financial Corp., a $15 billion-asset thrift company in New York. "There's been more talk than action.''

Lawrence J. Toal, chief executive of Dime Bancorp, a New York thrift company with $14.2 billion in assets, said he agrees. "Some institutions are moving much too slowly."

Industry statistics support their concerns. While residential mortgages made up about 50% of the total assets at savings institutions as of June 30, consumer and commercial loans accounted for only 5.1% and 2.2%, respectively, of all assets, according to the Federal Deposit Insurance Corp.

The data shows, moreover, that there has been little change over the past year.

Though the efforts of thrifts to become more like commercial banks have been halting, it's clear that most executives see the wisdom of relying less on home lending -- their core business -- and more on banking businesses such as consumer and commercial lending and fee-based businesses such as mutual funds and insurance.

Last year thrift executives who responded to a survey by America's Community Bankers, a trade organization that represents many thrifts, said they expect that commercial lending will account for as much as 5% of the industry's assets in five years, more than double the current level. The respondents also predicted that nonmortgage consumer lending would jump to 7% of assets.

Still, the industry has a long way to go to catch up with some of its trendsetters.

When TCF Financial took on a commercial bank holding company charter two years ago, it symbolized a reinvention strategy that began in the mid-1980s when William A. Cooper became chief executive. Over the past five years, TCF Financial has shifted its asset mix so that residential mortgages have dropped from about half of assets to about 30%, he said. At the same time, the bank's deposit base has also become more like that of a commercial bank, with expensive certificates of deposit being replaced by checking accounts and other demand deposits, Mr. Cooper said.

"Bigger players such as TCF Financial, Washington Mutual, and Charter One are either evolved or in the process of evolving,'' said Mr. Cooper.

The former thrift executive said one key ingredient in transforming a classic thrift into an enterprise more like a commercial bank is to hire talented commercial bankers. "The typical thrift branch manager is a 52-year-old guy who puts his feet up on the desk and is good at opening CD accounts for old ladies,'' Mr. Cooper said. By contrast, he said, commercial bankers tend to be better at courting area businesses.

There are other methods as well, such as pushing into supermarket banking, as TCF has done, or buying up specialty finance businesses, along the lines of Greenpoint and Seattle's Washington Mutual.

"The larger top-performing thrifts are producing high profitability and are making the transition in an orderly way,'' said Kerry Killinger, chief executive officer of Washington Mutual.

Added Mr. Toal of Dime: "We can do everything that a commercial bank can.''

But while few in the thrift industry question the move to embrace commercial banking businesses, executives do sound a warning.

"Institutions need to be prudent about the timing,'' said E. Lee Beard, chief executive of First Federal Bank, a $612 million-asset thrift in Hazleton, Pa. "They shouldn't stretch for the product for the sake of having the product. They should focus on products and services that bring the best return to the bottom line.''

Mr. Killinger added: "You really have to analyze the risks of each new business and determine how they will perform, both in good times and bad. At the top of the cycle, this is the time to be particularly careful.''

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