With Its Newly Acquired Affiliates Performing Poorly, BankAmerica Is Counting on Luke Helms: Mr. Fix-It

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Mr. Fix-It

SAN FRANCISCO -- Over the last five years, BankAmerica Corp. has carried out a great expansion drive, positioning itself for the emerging era of nationwide banking.

Bursting out from its core markets in California and Washington State, the nation's second-largest bank company has built a retail empire that stretches from Hawaii to Texas.

But the new units have been a drag on earnings so far. Collectively, they are BankAmerica's weakest business segment.

Last year, the new affiliates lost $45 million as a group, pulled down by $71 million of red ink in Texas. In this year's first quarter, they broke into the black - just barely - earning $2 million.

Luke S. Helms' job is to fix that.

Brought to San Francisco headquarters from Seattle last year, where he headed BankAmerica's hugely profitable Seafirst unit, the 50-year-old vice chairman manages the company's sprawling retail operations.

At BankAmerica, where retail authority has long been divided, he is the first executive to oversee the entire network, now consisting of 1,926 offices in 10 western states, including branches of the old-line subsidiaries and newly established interstate affiliates.

Don't Tell Him 'No'

At Seafirst, Mr. Helms "built a sales culture that is positive and upbeat," recalled a former colleague. "He's a just-do-it sort of person - he just refuses to hear 'no.'"

Mr. Helms, a sandy-haired, round-faced Texan, is gregarious in manner and youthful in energy and appearance, with all the exuberance of a super salesman. He is tackling the challenge of turning around the new banks with the same irrepressible optimism he brought to making Seafirst a marketing standout.

A nonstop talker, his speech is peppered with words like "fabulous" and "monumental." He calls BankAmerica's lead California bank, where branches average a hefty $65 million in deposits, "the best retail franchise I have ever seen." He shows almost as much enthusiasm for even the weakest links in the company's retail chain.

After months spent on organizational issues, he now says he is focused on the thing he obviously loves most - selling.

1994: No Distractions

"Nineteen Ninety-Four is the first year we are able to concentrate on the markets with no mergers, consolidations or systems conversions to distract us," he explained during an interview at BankAmerica's headquarters.

About the new banks, he vowed: "We're going to make a lot of money soon."

That is no easy task. "The interstate bank network is going to take a lot of remedial work," said R. Jay Tejera, Seattle-based analyst for Dain Bosworth.

Today, the interstate group consists of 645 branches in eight states. It holds approximately $28 billion in assets, about 15% of BankAmerica's total of $197.2 billion in assets.

BankAmerica assembled the network largely through the purchase of thrift branches, often the debris of failed institutions sold by the federal Resolution Trust Corp.

BankAmerica frequently got poor physical plants and secondrate locations. Many of its acquisitions were branch-and-deposit deals providing few earning assets. Worse yet, management and staff of the acquired institutions often didn't know how to operate a commercial bank.

Tough Way to Expand

Banks have had the most success buying thrifts when they could fold the branches into existing networks. But BankAmerica bought savings institutions as a relatively cheap way to expand its territory.

"It's a difficult way to enter new markets," noted Mark Alpert, analyst with Alex, Brown & Sons.

The varying pedigree of the operations BankAmerica inherited complicated the integration task. In addition to thrifts, BankAmerica acquired units from Security Pacific Corp. in places like Arizona, Alaska and Idaho.

And, in some cases, BankAmerica bought commercial banks, notably in Nevada where it took over the state's largest independent financial institution. …