One of the nation's most successful bankers has returned to Indiana.
After four years spent spearheading the turnaround of deeply troubled City National Bank in Charleston, W.Va., Jerry Francis took the helm at Kokomobased First National Bank & Trust Feb. 9.
Francis is best known locally from his days as president of People's Bank Corp. He left Indianapolis in 2001 after Fifth Third Bancorp bought People's for $228 million. But his name is recognized across the nation thanks to the work he did at City National.
When he started there, the West Virginia bank was nursing a $38.4 million loss in 2000. Its share price had dipped to nearly $5. Under Francis, the bank returned to profitability, booking a $46.6 million profit in 2004. Shareholders responded, sending City National's stock north of $33 a share.
The remarkable turnaround earned Francis accolades from his bank industry peers. The American Banker magazine named him its 2002 Community Banker of the Year. City National ranked 14th on the Washington, D.C.-based American Bankers Association's 2004 Top Performer List.
ABA ranks bank performance based on average return on equity. City National posted average ROE of 24.5 percent in 2004.
On Jan. 26, Francis stepped down from day-to-day management at City National, saying his work was done. Francis remains City National's chairman, while his former CFO Charles R. "Skip" Hageboeck has become City National's new CEO.
Hageboeck was part of a team of former People's executives Francis brought to West Virginia.
"It was an extraordinary turnaround," Hageboeck said. "Jerry led that, and he did it quite well. I'm sure any other situation he's involved in will turn around equally well."
With $1.5 billion in assets, 89 employees and 27 branches, First National is in vastly better shape than City National had been. Francis said he had more than a passing interest in returning to the Indianapolis market. He spent the last four years commuting here to visit his fiancÃ©e.
"That's quite long enough, I think," he said.
Francis said he liked the fact that First National is closely held by the Hasten family, which eliminates the high cost of auditing driven by the Sarbanes-Oxley Act. Francis said First National's current situation is similar to People's when he took over: a solid but underperforming bank ripe for increased efficiency.
"What we are hoping to do here is realize its full potential," Francis said.
To grow First National, which is central Indiana's 18th-largest bank, according to IBJ's 2005 Book of Lists, Francis plans a back-to-basics community banking approach. He wants to emphasize topnotch customer service, improved credit quality and a review of First National's marketing strategy.
Although the bank is best known for operating in smaller markets outside the city, like Kokomo and Richmond, Francis said he has no qualms about taking on the big players of central Indiana. His expansion strategy for First National is aimed directly at Indianapolis.
"At the end of the day, it comes down to branch by branch," he said. "The bank that does the best job with all those core fundamental issues is going to be the winner. And that's not an issue of large or small. It's about being good at what you do."
Former Fifth Third Bank of Central Indiana CEO Mike Alley got to know Francis during Peoples' transition to Fifth Third. Alley, now CEO of Carmel-based custom entertainment system installer Electronic Evolutions, said First National's long-term strategy may be to maximize its value in preparation for sale to a larger bank.
"I'm sure what [the Hasten family] has in mind is for Jerry to come in and enhance the efficiency and profitability of the institution," Alley said. "Improved performance [would] position it to be a stronger acquisition candidate. That's speculation, but it could be very reasonable considering the heavy ownership the Hasten family has."
Jerry Francis, left, is the new CEO of First National Bank and Trust. John O'Donnell is taking over as president. Francis led a dramatic bank turnaround in West Virginia.