Tapping into the “gray” market should help...

Tapping into the “gray” market should help independent banks maintain their profitability as they face difficult times ahead, according to a dozen executives who participated in a seminar put on by Gerry Findley, a Brea-based financial institutions consultant.

“Some banks have been using older workers--retired people--and the banks are getting more stable and less costly employees because they are all part-timers who get few or no fringe benefits,” said Findley, who publishes the Findley Reports on California Banks.

Findley, a banking guru who has devised a set of criteria to identify “premier” performing banks, presided over the four-day meeting last week aboard the Mississippi Queen as it paddled its way from New Orleans to Natchez, Miss., and back again.

The bankers--all from premier-performing organizations--told Findley that they were under great pressure to maintain profitability because taxes are going up, good loans are getting difficult to make and their interest income--the spread between what they earn on loans and investments and what they pay out on deposits and borrowings--is getting smaller.

Findley, long an advocate of reducing noninterest expenses, said the bankers were cutting back on branch expansions and dumping higher-salaried positions but still needed to find more ways to reduce costs.

He said the bankers agreed that the “pocketbook principle,” which states that top managers with significant ownership of company stock tend to work harder, is one way to ensure better performance.

But when one executive talked about the stability of his part-time help, other bankers liked the idea, Findley said. As a group, the elderly have been overlooked or discriminated against when it comes to employment, but the bankers decided that they would start exploring the use of elderly people as part-time employees, he said, adding:

“It’s something banks are going to be paying attention to.”

--Compiled by James S. Granelli, Times Staff Writer