Magazine article American Banker

Missouri Turnaround Formula: Fix Things One Step at a Time

Magazine article American Banker

Missouri Turnaround Formula: Fix Things One Step at a Time

Article excerpt

James A. Saitz's philosophy for cleaning up a troubled bank is simple: solve problems one step at a time, and don't ignore the rest of the business.

"Even if you take a small step in the right direction, you're going to eventually get to the end goals," he said.

Mr. Saitz, 45, should know. Most recently, he has employed his strategy at Missouri Slate Bank, St. Louis, which at its worst had $2.2 million in nonperforming loans. He previously labored over loan problems at the city's former Landmark Bank.

Cleanup management can't be overwhelmed by the enormity of a bank's problems, said Missouri State's president and chief executive. Mr. Saitz encourages "success on a day-to-day basis" on the road to recovery.

His work is paying off at Missouri State, which like many banks suffered from, an economic downturn not long ago. He has slashed nonperforming loans to $477,000 at June 30 from $1.2 million last September.

By yearend, he counts on cutting them much further and predicts return on assets of 1%. This after Missouri State experienced operating losses for the last three calendar years averaging $750,000, he said.

Management can't ignore the rest of its business during a bank's resurrection, he said. "You have a tendency to concentrate on the problem issues alone, and the good, quality relationships you have leave," he said. "It's a balancing act."

Missouri State has heeded this lesson: Since the end of the year, its deposit base is up 23%, loans are up 22% and total assets have increased 35%, Mr. …

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