Smart Money

Bob McCormick's flair for innovation has made his company a model in an industry that's as stodgy as they come.

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If appearances were all that mattered, Oklahoma's 23d-largest commercial bank would be much like any other small-town bank. On the street level, where the teller lines are, a dozen or so employees sit at dark wooden desks, stapling papers together and talking with customers looking for car loans or new checking accounts. Upstairs, in the commercial-lending department, the owner of a dress shop or hardware store might be dropping by to deliver a check or chat with a lending officer. Even the bank's boardroom, where a stately portrait hangs on walnut paneling, looks about as unusual as a Holiday Inn.

All of which gives a visitor the impression of an elaborately constructed stage set, complete with well-dressed men and women sent down from central casting and told to act like bankers. It is hard to imagine, in other words, how Stillwater National Bank & Trust Co. can be what it is and still look quite so ordinary.

Certainly the numbers by which banks are measured give quite a different impression. On 1984 assets of $165.9 million, for example, Stillwater National earned $2 million -- at least 20% more than most U.S. banks its size. Those assets have quadrupled over the past decade, yet the bank's loan losses have remained low. A banker examining its balance sheet would spot something else right away: where most banks depend largely on interest income, Stillwater National earned a hefty 80% of its profits from fees, implying a level of operation a lot of banks haven't discovered yet. Once a sleepy, second-fiddle bank in a dusty Oklahoma town, it has made itself into the preeminent bank of a growing regional center -- and it has done so through maneuvers as astute as those of any big-city financier.

Go-go banks, to be srue, are nothing new in Oklahoma. From Oklahoma National Bank to Penn Square Bank, high-riding moneylenders have risen and fallen with the fortunes of the oil business. But that only makes Stillwater National all the more remarkable. The bank has one picture of an oil rig on an upstairs wall. That is about as close as it has come to the industry.

So what's the secret? "We're not trying to be everything to everybody," says Bob McCormick, a trim 50-year-old who has engineered the bank's remarkable growth. "But over the years, I guess we've done some pretty creative things for a little county-seat bank in Oklahoma."

A decade ago, admits McCormick's counterpart at the number-two bank in the town of Stillwater, "we were the biggest bank in town. But we haven't grown the way they have." Part of the reason, he says, is that they have "chosen a different strategy." But there's another factor, too.

"Bob McCormick," the banker adds, "is a very sharp guy."

When Bob McCormick was growing up in Oklahoma City during the 1940s and '50s, nobody took him for the banking type. His maternal grandfather had dabbled in real estate and in oil and gas, with mixed success. His father, a hard-charging wholesale paper salesman, was so bothered by his boy's careless attitude that he packed him off, at age 16, to military school. Young Bob, explains a friend from that era, wasn't exactly lazy, "he just didn't do any more than he had to do."

"I saw him as a perfect salesman," the friend adds, "running a Chevy dealership. Definitely not a bank."

It took McCormick five years to get through the University of Oklahoma, where, he claims, he majored in finance and parties. It took him only four years to get through the Marines. By then he had a wife and three sons, and after a brief stint selling insurance, he jumped at an entry-level position with Fidelity Bank, in Oklahoma City. His eight years there would be his only on-the-job training for heading up Stillwater National -- but he remembers the lessons some two decades later.

As a trainee, he was shuffled through a series of jobs. He worked as a teller, then with the credit department, where he was supposed to make sure that loan applications were supported with all the right documents. Ambitious, he dug out back issues of bank lending journals and studied the proper procedures for making loans. But the bank was growing rapidly, and a lot of his peers weren't going by the book; instead they were "shooting from the hip" and generating a lot of problem loans. Among the hip-shooters: Bill P. "Beep" Jennings, who later became the chairman of Penn Square.

So McCormick wasn't surprised when Fidelity reported big losses in 1963 and '64. But despite the losses, he was impressed with some of the bank's positive aspects. Fidelity's president, Grady Harris, seemed to have a knack for making customers feel at ease. "After a session with Grady," McCormick says now, "they'd want to do business with his bank."

The contact with Stillwater National came in 1970. A commercial bank with $22 million in assets, it was controlled and managed by the Berry family, whose patriarch, James Berry, was a longtime lieutenant governor of Oklahoma. Now James's 49-year-old son Frank, who had been heading the bank, was dead of a massive stroke, and a cousin of the family put the Berrys in touch with McCormick, by then a clean-cut and confident man of 35. The Berrys figured he was just the type of fellow they wanted to manage their small-town bank. They weren't, after all, asking much. He wasn't expected to overtake the number-one local bank, which commanded some 57% of the market; he was only supposed to keep things sound. As George Berry, Frank's older brother, comments, "We didn't want him doing anything too racy."

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