Thomas R. Ricketts

Standard Federal Bank spent most of the 1980s cleaning up its balance sheet, swimming upstream against a current in the [...]

September 1 1994 by Joseph Mccarthy


Standard Federal Bank spent most of the 1980s cleaning up its balance sheet, swimming upstream against a current in the thrift industry of insolvencies and corruption. One result: The savings institution survived to become a big fish in a fairly big pool-an area consisting of Michigan, and parts of Indiana and Ohio.

The secret to success for $11.2 billion-asset Standard Federal-the Midwest‘s largest thrift and the seventh-largest nationwide-is a focus on generating residential mortgages. Loan closings increased more than 20 percent last year to $4.3 billion, helping drive net income to a company record $115.6 million, up 20.1 percent from the year-earlier period.

“Profitability begins with a singular purpose,” says Tom Ricketts, 63, chairman, president, and chief executive of Troy, MI-based Standard Federal. “The alternative is to try everything and do nothing well. Besides, a residential mortgage is the safest loan known to man.”

Standard Federal leverages relationships with real estate brokers and builders, thus boosting loan volume. “Many buyers take the advice of the realtor on whom to approach for a mortgage,” Ricketts says. Service supported by technology is the key to satisfying small and large customers, he adds. “A realtor wants to know whether you’re bankable. Our computer systems tell them that faster than anyone else’s.”

Practically all of the bank’s ancillary income sources-including such lucrative fee generators as home-equity loans, credit cards, checking accounts, and automated teller machines-are tied to home mortgages. “We have the paperwork for free checking and an equity line prepared at closing-all you have to do is sign,” says Ricketts.

Such “bundling” helped the bank to increase deposits last year, bucking an industrywide outflow caused by low interest rates. Acquisitions-18 of them since Ricketts took over as CEO in 1974 also have accelerated growth.   

“You can build branches, but that takes a fortune and a lot of time,” Ricketts says. “It’s much nicer to find a business that’s already developed.”