In his final address as president of the Metropolitan Washington Savings and Loan League Wednesday evening, William F. Sinclair did his best to spark a ray of hope for his colleagues after acknowledging a "severe stress" within the industry.
To be sure, the savings and loan industry is in near shambles. However, several associations are solvent and strong, Sinclair reminded a small gathering of S&L officials and guests at the league's "annual meeting." What's more, he said, those S&Ls will survive the crisis of the '80s.
Despite his upbeat, though brief remarks, Sinclair received a surprisingly lukewarm response from those present.
In fact, the "annual meeting," which was restructured this year as a reception and cocktail party, was only slightly livelier than a wake. Fewer than 200 persons attended, compared with more than 300 at traditional annual meetings held in the past at The Homestead, a Hot Springs, Va., resort.
"We hope you will plan to be present and help us retain some of the esprit de corps which has been prevalent at previous annual meetings," the league's office said in a letter of invitation.
Little of that was retained, however. Gallows humor highlighted the conversations of most groups scattered about the ballroom of the Hotel Washington. President-elect Robert A. Barton Jr. evoked the biggest laugh of the evening when he welcomed the gathering to "the Homestead Room of the Hotel Washington."
In one group, an S&L official vowed that, despite nerve-jarring losses, his association will survive the financial storm that has struck the industry.
Elsewhere, a veteran official spoke wistfully about his 44 years at the same institution and his impending retirement this fall.
Another executive recounted his attempt to restore morale among tellers and other employes below the management level. It's important to assure employes that their well-being is as important to management as profitability, he emphasized.
One official was overheard predicting that continuing heavy losses will prompt even the larger S&Ls to seek mergers.
The merger issue was the subject of much speculation throughout the evening, most of it centered on the fate of Guardian Federal Savings and Loan. Several officials said they were expecting federal regulators to announce a merger partner for the beleaguered Guardian last week.
Some of the same officials insist that the Federal Savings and Loan Insurance Corp. is holding a proposed merger between Perpetual American Savings and Loan and Washington-Lee Savings and Loan hostage, pending an agreement by Perpetual American to take over Guardian.
As one league official put it, the rumored three-way merger would give Perpetual the dominant position in the Middle Atlantic region. "Their market would extend from the North Carolina line to Delaware and Pennsylvania," he noted.
Perpetual American is already the biggest S&L in metropolitan Washington. A merger with Northern Virginia's Washington-Lee would permit it to establish branches throughout that state. The same opportunity would exist if it were permitted to acquire Guardian, which is a Maryland-chartered S&L.
It would be a case of the strong getting stronger--if not immediately, then in an improved economy.
But as Sinclair correctly pointed out, "The new oncoming participants in our business will create intense competition, and only the strong will survive."
It's not a case of seeing the light, Sinclair warned his colleagues in the league. "It's feeling the heat, and it's going to get plenty hot."
He urged league members to use this stage of the economy to "gear up" for a new kind of business. "Don't wait for the market to improve before investigating new marketing trends and opportunities," Sinclair cautioned.
"We must operate faster, smarter and more efficiently than ever before," he said.
In his most optimistic view of the future, Sinclair sees the next generation of S&Ls as "a new institution which will be a one-stop financial supermarket with a menu of automatic teller machines, remote service units, overdraft privileges, billpayer, credit and debit cards, all types of loans . . . financial counseling and trust services."
He said that, with current deregulation, S&Ls can compete in the '80s. But, he added, "They must manage for profits and use the available management tools."
"Peering analytically into the future now can provide the keys to strategies that will enhance--perhaps even ensure--our being competitive and successful," Sinclair concluded.