The mortgage banking industry faces serious challenges and, as CFO of one of the nation's largest mortgage banking companies, Denise C. Sawyer plans to constructively deal with each of them head-on.

"The market is changing and we no longer have the refinancing volumes that we used to have," Sawyer told Mortgage Marketplace. "That means we need to do a better job in every area to compete with the competition."

A large part of NationsBank Mortgage's strategies involves furthering growth through acquisitions, and Sawyer is a pro. Before joining NationsBank Mortgage, a subsidiary of NationsBank Corp. headquartered in Charlotte, N.C., she was executive vice president of NationsBank of Texas in Dallas. Before moving to Texas, five years ago, she worked on the financial team at the headquarters in Charlotte.

During her tenure on the financial executive team of NationsBank's Texas operations as controller, she was involved in several acquisitions within the state.

The acquisition of First Republic Bank from the Federal Deposit Insurance Corp. placed NationsBank in the state of Texas, and Sawyer was a part of the team.

From 1988 through 1992, NationsBank made 15 small-bank acquisitions through the Resolution Trust Corp. and the FDIC which placed them in several states in the Southeastern United States.

As NationsBank branched out, Sawyer was a part of the number-crunching team in the acquisitions. Part of the secret of successful acquisitions is the research and planning, Sawyer contends.

"We have a really good strategic planning area and they bring in the control people and the financial people needed to research and dose a deal," she said.

During the acquisition processes, Sawyer spent her time working on analyzing the bank's financial statements and reviewing its accounting and auditing systems.

Some of the biggest challenges facing the industry in the current interest rate environment is learning how to find new business niches and more efficient ways to run current operations, she said.

"The mortgage banking industry has not been a highly organized industry, and some of the other financial services industries are ahead of us," Sawyer said. "We are not on the leading edge of computer technology, for instance."

Sawyer contends that the industry has to find technologies that will do things more efficiently and at a reduced cost.

"We are trying to develop systems that will do this for us and that will allow us to better position ourselves in the marketplace," she said.

NationsBank Mortgage Corp. is looking into how to improve its processing systems for better efficiency and looking to develop computer programs that will give automatic credit appraisals, more efficient underwriting and credit scoring systems.

Another part of the NationsBank philosophy is to branch out into new markets and this is part of the philosophy of NationsBank Mortgage Corp. "Not only do we need to do a better job to compete, but it is also part of the NationsBank culture to continue its acquisition efforts," she said.

When seeking a profitable acquisition, Sawyer says that there are several things to look for to ensure success.

The entities should be a good fit and the products should add benefits to the overall package of services. "You have to look at an acquisition for entry into new markets, new products, or other resources," Sawyer said.

Once the acquisition process begins, Sawyer and a team of financial analysts review things like the institution's underwriting and credit quality standards.

"In due diligence, we also review their accounting and auditing systems and also their compliance systems," she said.

With the impending growth at NationsBank Mortgage Corp., downsizing is not expected to be an issue.

With NationsBank Mortgage's plans for expansion and systems changes, Sawyer says, they are likely to need highly trained people.

"We are trying to structure our company for change," she said. "So much in the industry is changing and there is a need to stay on top, especially as we move toward nationwide banking."

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