Title: Allen Lastinger, Jr.
Full Citation
Permanent Link: http://ufdc.ufl.edu/UF00005464/00001
 Material Information
Title: Allen Lastinger, Jr.
Series Title: Allen Lastinger, Jr.
Physical Description: Book
 Record Information
Bibliographic ID: UF00005464
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.


This item has the following downloads:

FBL 22 ( PDF )

Full Text

FBL 22
Interviewee: Allen L. Lastinger, Jr.
Interviewer: Julian Pleasants
Date: November 12, 2002

P: This is Julian Pleasants and it's November 12, 2002. I'm with Allen Lastinger at
Crescent Beach, Florida. Tell me when and where you were born.

L: I was born in Atmore, Alabama, on August 16, 1942.

P: Did you spend most of your time growing up in Alabama?

L: No, my father actually was working in Walnut Hill, Florida. He couldn't find a
place to live in Walnut Hill, so they found a place in Atmore, Alabama. I was the
first Lastinger born outside of Florida in my family line since the 1820s. I [have]
regretted that ever since. We moved from Atmore to Gainesville in 1945 when I
was three, so actually I grew up in Gainesville.

P: Talk a little bit about what Gainesville was like when you were growing up.

L: [Laughing] Nothing like it is today. We lived in a rented house on what was
Virginia Avenue, which was near downtown probably a block and a half from the
old Gainesville Post Office. Most of the activities in the 1940s and 1950s were
centered in the downtown area. The courthouse was the center of activity and
the movie theaters, the Lyric, the State, the Florida, the churches [were there as
well]. Everything was downtown. As a kid I used to sell boiled peanuts downtown.
You could cover the whole city in half an hour just walking around downtown
Gainesville. It was a pleasant town. It was a relatively small town then, I don't
know what the population was, but it was a town that we really enjoyed.

P: Your father worked with the Department of Agriculture?

L: He was a soil conservationist with the U.S. Department of Agriculture. His office
was initially in the Lewis Jewelry Company building across the street from what
was J.C. Penney's. He then moved to the Seagle Building into the annex on the
back. In the 1960s, when I was in high school, he got transferred to Green Cove
Springs. But we didn't move the family over there. He commuted back and forth
on the weekends.

P: And your mother was a school teacher?

L: She was a fifth grade school teacher. She started out at Kirby Smith and ended
up at Idyllwild Elementary School. She taught fifth grade all of her career.

P: You grew up in Gainesville and you decided to stay at home and go to University

FBL 22
Page 2

of Florida. Why did you choose to do so? Why not go out of town or go to "that
other institution" in Tallahassee? [Laughing.]

L: Growing up in Gainesville it just seemed natural to continue going to school at
the University of Florida. My uncle was a professor in the College of Education at
FSU and he encouraged me to go there, but I guess I was a Gator and I couldn't
get it out of my system. Plus, there were some financial aspects that were
important. I had two sisters and we didn't have a lot of discretionary income in
the family. It was easier financially for me to stay Gainesville, live at home, and
spend my undergraduate years there.

P: I understand you had several jobs to help pay your way through college.

L: I worked a number of places. I worked at the Gator Sports Shop for several
years. I worked for Malone's Bookstore when it was in existence. I sold drinks at
the Florida football games. I was a busboy at the KD [Kappa Delta sorority]
house. I helped my dad deliver eggs. As he was coming back from Green Cove
Springs he would stop in Keystone Heights and pick up eggs that he would sell to
the fraternity and sorority houses. That really is what helped him get me and my
sisters through college. So yes, we did a lot of odds and ends.

P: A lot of people I've talked to who were successful in business later almost all had
varied experience when they were younger and learned how to work and how a
business is operated. Did you find that that was the case?

L: I never was high enough in the hierarchy to understand how businesses operate.
[Laughing]. I was always kind of a low-level laborer, but it did teach me what I
didn't want to do. I hate to put it in that context. For example, during the summers
in high school I worked on the University of Florida agronomy farm, and the
tobacco field was where the [University Hotel and] Conference Center is now
located. It taught me that I didn't want to be a farm laborer. It taught me I didn't
want to be a dishwasher. It taught me I didn't want to be a retail clerk. It did give
me, and my parents always gave me, the sense that education was important
and hard work was important. I think most of it came from my parents more than
my job experience.

P: What kind of student were you at the university?

L: I was a poor student as an undergraduate. I think I graduated with an overall 2.3
grade point average. [It was] something a little higher than that in the business
school. I couldn't get a job based on my academic credentials, I'll tell you that.

P: What faculty members had a strong influence on you?

FBL 22
Page 3

L: As I mentioned to you earlier, Sam Proctor, although he wasn't in the business
school, was probably the most interesting professor that I had while I was in
school. Maybe the subject was more interesting than accounting or statistics, but
he was very enjoyable and very informative. In the business school, Jim
Richardson was in the finance area then and was very helpful. Most of my
professors I didn't know well because I wasn't a real good student. There was no
professor until graduate school that really had a lifelong impact on me.

P: When you graduated from the University of Florida, you then went to work for
Shell Oil Company. Is that right?

L: I did.

P: What were your goals at that point?

L: The first goal was to get a job because I got married a week after I graduated
and I had enough cash flow to last me about three days. My first priority was to
get a job. Fortunately, I had two interviews. One with Rich's Department Store in
Atlanta and one with Shell Oil Company. They both offered me jobs, but I
accepted the job with Shell because it paid more. We were located in
Jacksonville. My wife got a job there as a school teacher. So we really got off to a
fairly good start. We were making more money between us as we started our
work life than I ever thought possible. We were very fortunate.

P: You didn't stay with them very long.

L: No, I didn't. I left Shell because I got my draft notice and I did not want to be
drafted. This was the time that the Vietnam War was starting. It was 1966. I
graduated in 1965 as an undergraduate; [I] should have graduated in 1964. Then
I went to work for Shell in 1965, got my draft notice, and joined the Navy in 1966.
So I left Jacksonville and went to Pensacola [Florida].

P: Tell me about your Navy career. What did you do and where were you stationed?

L: When I got drafted I joined the Navy with the intent of getting into one of the
officer programs. I initially wanted to get into what they call the Black Shoe Navy,
Boat Navy, and the officer candidate school in Newport, Rhode Island, was full.
Then I asked about other programs and they mentioned the aviation program in
Pensacola, the Brown Shoe Navy. So I applied for that but [I] didn't really want to
fly. At the time I was very reluctant to fly, but they indicated they had another job
in air intelligence that goes through the same program. So I applied for that and
was accepted. I went to Pensacola and stayed there through the early part of my
training. I got my commission there and then went to Aurora, Colorado, Lowry Air
Force Base, for advanced intelligence training. By the way, that was the first time

FBL 22
Page 4

I saw snow. I was twenty-three years old [and had lived] in Florida all my life.

P: Were you working for the Office of Naval Intelligence.?

L: No. I was stationed with a reconnaissance squadron. When I was transferred out
of Aurora, I came to Sanford, Florida, and was stationed with the RA5C
replacement air group, the training squadron there. [I] stayed there until they
closed Sanford and we moved to Albany, which was a SAC [Strategic Air
Command] base. They closed the SAC base and relocated the reconnaissance
squadrons to Albany. I was going to career out there, complete my four year
obligation there, and then some person with my same job description aboard the
[U.S.S.] John F. Kennedy fell down a ladder and hurt his back. So I got a call and
[the Navy] said, "Report to the John F. Kennedy for a nine month deployment to
the Mediterranean in two weeks." I spent my last nine months in the Navy aboard
the John F. Kennedy, which was a great experience by the way.

P: Where were you?

L: The John F. Kennedy was stationed in Norfolk, [Virginia], but we left Norfolk and
we just cruised around the Mediterranean. You've got to remember, this is 1969.
[President] John F. Kennedy was killed only six years earlier. He was revered in
Europe, so this was more of a goodwill tour than a military event. We would go to
Malta, Nice, Corfu, Trieste, and Naples. Every time we would go into port we
would host a goodwill party inviting whoever wanted to come out to the ship to
come out. We had a band and they had food and it was just a party. It was a
pleasant experience while we were in port, but we also did the military
responsibility when we were out of port.

P: It was a much better duty than being in Vietnam?

L: It was. I'd promised Delores, my wife, that we would go to Europe if she would
marry me. So I was able to bring her over to Europe with a bunch of other military
wives. We took some leave and went off into Germany and northern Italy.

P: What ship class was the John F. Kennedy?

L: I don't know. It's still operational today in Jacksonville [Florida]. Sixty-seven was
the carrier number, but I'm not sure what class it was.

P: But it was a big carrier.

L: It was a huge aircraft carrier. It was non-nuclear, but it was a big carrier. [It had]
5,000 men aboard [and was] 1,000 feet long. That type of thing.

FBL 22
Page 5

P: It's amazing. I just went on board one of the new carriers, the Iwo Jima,, and you
could get lost in that ship and couldn't find your way off for two or three hours.

L: It's funny you mention that because I did get lost. I went aboard [the John F.
Kennedy] and I was looking for my roommate. I guess it's traditional, when a new
rookie comes aboard, they kind of pull your chain a little bit. [The person I asked]
said, "He's down at the bowling alley." I said, "Where is the bowling alley?" They
kept giving me directions around the ship. Every time I stopped and asked
somebody where the bowling alley was, they would continue to give me
directions. I finally figured out there was no bowling alley.

P: It certainly could have had one.

L: They're big enough for sure.

P: They had everything else. What was your view about the Vietnam War?

L: I had a supportive view of the war. I wasn't an ideologue about it, I just felt like it
was something that we were doing as a country and I needed to do my share. I
was happy to do my share. During the course of my service I got to the point
where I supported pretty strongly the Vietnam War. When I came back to
graduate school it was upsetting to me to see the protesters around the
university. But I knew it was a very controversial conflict and I could understand
why people would not agree with what we were doing.

P: What do you think about it now? Do you think it was a mistake or the right thing
to do?

L: I think it was probably the right thing to do but we went about it in the wrong way.
It was more of a political war than a military war. As things always seem to
happen, it came out okay. I mean, they're a Communist nation, but that doesn't
appear to be an obstruction to any kind of relationship or economic tie or
goodwill. It's unfortunate we lost so many people, but I think that the politicians
were managing the war rather than the generals.

P: When you leave the Navy, then you decide to go back to Florida and get an MBA
[Masters of Business Administration].

L: I left the Navy and decided to go back to Florida because the economy was in
recession at the time. That was back in 1970. I recognized that my academic
credentials were not stellar. I thought that I was able to improve myself
academically if I could get back in school. The only problem was getting back in
school. My wife pleaded my case to Dean McFerrin and Dr. Matthews. They
finally agreed that they would let me back into the MBA program if I scored a

FBL 22
Page 6

certain number or higher on the GRE [Graduate Record Exam] test at the time.
So I studied on the ship. They actually gave the GRE test on the carrier. So I
studied and took the test on the carrier, scored the number that they said I had to
score, and was admitted to the university. [Going to school would] give me some
time to reacclimate to civilian life and to get a more [marketable degree]. I had an
[undergraduate] marketing degree and I felt like a finance concentration would be
more marketable. [It would] also give me an opportunity to show that I could
make good grades if I really tried.

P: How did you do in graduate school?

L: I did well. I made all "A"s and one "B." I got in on probation and I had to take
calculus the first term. That was the only "B" I made.

P: A lot of people would be glad to get a "B" in that course.

L: I was. I was delighted.

P: What do you attribute your successful academic work in graduate school as
opposed to undergraduate?

L: There's a maturity issue that you just can't discount. When I went to the
university, I joined a fraternity. I got involved in a lot of social activities and a lot
sports activities. I made new friends. I just didn't recognize, or realize at the time,
how important an academic foundation was. When I came back from the Navy, I
had a son and a wife. I had one more opportunity academically to either show I
had it or I didn't. So I spent the year I was there as if I were going to work
everyday. I went to work at eight o'clock and came home at six. When I wasn't in
class, I went to the library. I did what was necessary to improve. I think a lot of it
was maturity, but a lot of it was just the fact that I had that one more chance. I
had a family that I needed to support and if I didn't do well, then I reduced my
chances of having a successful career.

P: You might be back in retail sales.

L: [Laughing.] Right, or cropping tobacco.

P: You chose finance. At that point in your career, did you intend to go into

L: No. My objective then was to stay in Florida, because at the time I could
recognize the growth path that Florida was on. I knew that that was going to
create opportunities in a variety of fields. I just felt like a growth situation was a
better career position than a slow-growth or no-growth situation. When I started

FBL 22
Page 7

my job search, I sent out probably seventy-five letters to Florida-based
companies. [I sent them to] some banks, real estate operations, [and] just
anything that I picked out of the publications. From those seventy-five letters, I
probably got forty answers. All but two [of the companies] said, "Sorry we're not
hiring." The two that I got a chance to interview [with] were Barnett and Tampa
Electric Company. I interviewed [with] both and got a job offer from both. At the
time, Tampa Electric offered me $1,000 a month and Barnett offered me $800 a
month. That was less than we were making in the Navy, but I understood you
had to make that transition. I knew, of the two, that I would prefer to work at the
bank because it was more of a people situation. The Tampa Electric job was to
operate with their tug operation, taking phosphate up the Mississippi River and
then bringing coal back. It was interesting, but I just didn't think it would go
anywhere. The long and short of it is, I went back to Barnett and said, "If you
could just come up to $900 a month, I'll sign up," and they did. So I went to work
for Barnett in 1971.

P: When you started out you were doing market analysis, investment analysis, that
sort of thing.

L: I was working for Tom Duer, who was the secretary of the corporation and also
the investment relations person. My job was really to help Tom do analytical work
that would be useful and speech writing that would be useful for Guy Botts, our
chairman, as he told the Barnett story to the investment community. At the same
time, Tom was also in charge of the acquisition program at Barnett. [He was]
identifying attractive markets, identifying attractive banks, and then determining
what we could pay [for them and benefit] our shareholders.

P: At this time you were in Gainesville?

L: No, I was in Jacksonville. I left Gainesville and moved to Jacksonville. So we
worked with Tom in that capacity for several years, and then in 1973 or 1974,
Florida passed a branch banking law and my responsibilities shifted.

P: I think it was 1974.

L: Okay. In anticipation of that happening, I was put in charge of identifying
attractive markets for branch banking. That may have been because, when I was
in graduate school, I did my thesis on how under-banked Florida was and I tried
to identify what counties were the most under-banked and what counties would
be most attractive for expansion. So I had some background with that.

P: So, one of the areas you thought was under-banked was Gainesville, right?

L: Well, not necessarily. Most of the under-banked counties were the faster growing

FBL 22
Page 8

counties in south Florida, but our company had a strategy that we wanted to be
in the twenty most populous counties. We were not able to find a bank in
Gainesville that was willing to be sold, so the only way we could get in there
would be to go de novo, which is a brand new charter. We opened in Gainesville
in 1976 as our only means of entry, at that time, to get into one of the twenty
most populous counties in the state.

P: What were the other banks at that time?

L: Atlantic was the largest bank in Gainesville, and then of course Sun Bank was
there. Florida National was there. There was a University City Bank was on
University Avenue across from Jimmy Hughes Sports Shop. First City Bank
was on South 13th Street, [managed by] John Jennings. There was another
Atlantic Bank on North 13th that Hugh Shiver ran. There was a People's Bank on
West University [Avenue]....

P: I remember reading about when you picked that location it was sort of out in the
rural area and people were a little bit disturbed about that.

L: I don't know if they were disturbed, they never expressed that to. Maybe the
[prospective presidents] of the bank were disturbed because when we got the
charter, Guy Botts and Charlie Rice offered the job to four different Barnett
officers. They went out there and looked at the location, and at night you couldn't
even see a streetlight. There was nothing there but a slash pine forest and Willy
Brown's collard patch across the street.

P: Where was this?

L: It's on 43rd Street. It's between 39th [Avenue] and 23rd [Avenue] on 43rd Street. As
a matter of fact, I've got a picture downstairs that I commissioned that was my
view out of the bank. It was Willy Brown's house and his tool shed and his collard
patch. That was what I saw. But the long and the short of it is that no one that
was qualified to be president of the bank, seeing the location, accepted that
opportunity. So Mr. Botts called me in one day and said, "Allen, you like this
location so much, why don't you go down there and be president of the bank." I'd
never made a loan. I didn't know [how a] check [got] from point A to point B. I
was a corporate analyst more than a banker. But I said, "If I'm going to take this
much of a risk, I've got to talk to Delores." I went home and she was very
supportive. And I said, "This is an opportunity to get into the line side of the
business, away from the staff side, and it may work out better if we do that." So I
went back and told Mr. Botts that I would accept the offer, and we went down
there and started the bank in 1976.

FBL 22
Page 9

P: I do remember, I think it was in Barnett: The History of Florida's Bank (2001) by
David Ginzl, that your first loan didn't go real well.

L: It didn't. [I] made a loan to a guy that was a male nurse at Shands Hospital. He
had been employed there for six years, and he wanted to buy a bass [fishing]
boat. The bass boat cost like $9,000 and he was going to finance $6,000 [of it].
We checked his credit and everything checked out well, so we extended the loan.
The process in those days was that you gave the guy, I can't remember the term,
but it was a call on the bank to supply the money. So he gave the boat dealer this
call, and before the boat dealer got back to the bank to get his money, we had
gotten a call from the credit bureau looking for this guy. We knew that we had a
problem [but we had to give the dealer his money]. We also heard from [the
borrower's] landlord that he was about to move to Chicago. The long and the
short of it [was that] we got the boat back [and] we sold it. We lost $300, and
that's probably the best $300 loan lesson I ever had in my life. [laughing]

P: Yes, that could have been a lot worse. Even at that point, although that area was
not very developed, you could see that the city was going to expand in that

L: We did. We went to the courthouse and we got a map of the city of Gainesville.
We plotted every single family building permit from 1970 to 1975. Seventy-five
percent of the single family building permits were within a two mile radius of [the
bank's proposed] location. So you could look at the trees and see nothing, but if
you went down the little streets, the direction of growth was so pronounced to the
northwest that we knew it was going to be a super location.

P: How did you absorb all the lessons of being a bank president? Did it take you a
little bit of time? Did you get a lot of help?

L: I was fortunate enough to hire some very experienced, capable people, with one
exception. I did hire a loan officer who didn't pan out. I hired him from another
Barnett Bank on the recommendation of that bank's president. When I concluded
that I had to let him go, I called this bank president back. I said, "It's not working
out here. I know you said he did a great job for you, and I just wanted to give you
an opportunity to hire him back before I put him on the street." He said, "Oh, no,
we filled that position." [Laughing] I knew then that I had been had. He just
shifted one of his problems to me. Then I hired Andy Cheney, who came in.
Andy and Ronnie Hall and Donna Elliot and the crew that we had there were
very experienced. I just kind of set the tone for the bank's service philosophy and
that type of thing and then watched them operate. We met and talked about the
issues and decided what we ought to do.

P: That became one of the more profitable banks in the Barnett chain, did it not?

FBL 22
Page 10

L: It became one of the most profitable small banks in the Barnett chain. There are
obviously bigger banks who were making a lot more money, but we were growing
fast, we were earning money, [and] we were gaining market share. We were
doing a lot of things well. A lot of it, obviously, was not so much me, but the
location and the team we had put together.

P: So you stay with that bank until 1980.

L: The latter part of 1980, right.

P: Then you go back to Jacksonville as the Executive Vice-President for Community
Banking, is that right?

L: That's right.

P: Explain exactly what that job entailed.

L: During the period that I was in Gainesville, we had a consultant come in, and we
had the opportunity to consolidate the sixty or so charters we had down into a
smaller number. It was a county merger opportunity and a branching opportunity.
So during the time that I was in Gainesville, the company went through a fairly
major consolidation. For example, in Jacksonville we had five or six banks and
we consolidated them into one. That's generally what we did around the state. So
when I went back [to Jacksonville there] were twenty-one banks instead of sixty,
and most of them were relatively small banks. I was responsible for eighteen
relatively small banks, plus the marketing function, the consumer credit function,
and the mortgage function. It was a bank responsibility as well as a business line
responsibility. I was a little reticent about the job because here I was a fairly
young fellow at the time, less than forty years old, and I would be supervising
people who had been presidents of banks longer than I had been with Barnett. It
was kind of a "What does this guy know?" [situation]. So I spent an awful lot of
time listening and trying to understand as completely as I could what the
[opportunities and problems were] before I started exercising my authority.

P: One of the things I've noticed in reading David Ginzl's book is that both you and
Barnett Bank are very keen on the bank presidents and the people who work for
the bank getting involved in community service and community projects like the
Ronald McDonald House [a home for terminally ill children]. What's the major
objective of community service, other than doing good, from a business

L: The banking industry may be changing to a different approach now, but back
then banking was a local business. You dealt with local businesses, local
individuals, [and] with people in the community on an ongoing basis. Our

FBL 22
Page 11

philosophy was that the president of the bank should be involved in [making] the
community it a better place, because if the community's a better place, then it's a
better environment for the bank to benefit. [We] also wanted to give the bank
presidents, or the people that worked for the bank president, the authority to
make loan decisions and not require people to go to an out-of-town decision
maker. We put an awful lot of autonomy into the bank president's job. We also
said that "You're responsible for representing the brand, Barnett, to the
community, and do that however you think is appropriate." In some communities
it was [the] Ronald McDonald [House]. In most communities it was United Way.
In some communities, like in Gainesville, it was the University of Florida. So they
had a lot of discretion on how to interface with the community.

P: The issue of autonomy comes up quite a bit, and in that context I'm sure the
president had a certain amount of autonomy. But in banking terms, balancing
growth and profitability, I'm sure you had a very close assessment of their
performance during the year, and they had to adhere to certain profit goals. How
did that work?

L: Because we didn't want to go in and say one size fits all, this is where the
learning process took place for me, I would go in and talk to the bank president
and the senior management team of the bank to understand the growth
prospects for the market, what kind of loans they had, [and] what kind of deposit
structure they had. We would kind of talk through whether we wanted to invest in
growth. Remember, we could build new branches now. That was probably the
principle manifestation of our growth strategy, when we'd open one or two or
three branches a year. Whereas, if [we] didn't have that growth opportunity, [we]
wanted to focus more on getting the most out of what [we] had, in terms of
expense control or loan pricing or whatever [to improve profitability].

So the exercise that we went through every year was simply to sit down with the
president and his or her senior management team and define what the
opportunity was. It was either a growth emphasis, a profitability emphasis, or a
balance emphasis. Then we would structure the budget expectation from that
strategic overview. Once the budget was structured, then it was my job to say
this, number one, fits the strategy we agreed on, and number two, it either was a
difficult or an easy budget. The bonuses would be related to [the level of
difficulty]. If it was a difficult budget, then the people there could get a very good
payout if they hit 90 percent of [the plan]. If it was a very easy budget, they could
get no payout [even] if they [made the budget].

P: Was there sort of an overall profitability base? Any business has to make a
certain amount of money to reinvest. Did you go to an individual bank and did
you say, "Your target this year is 15 percent" or whatever it might be?

FBL 22
Page 12

L: We built the budget from the ground up. We basically said, "Let's do what is
appropriate for this bank [in] this market." Then, when we'd put [all the budgets]
together, to determine if they, [in total], met the overall corporate need. In the
years that it did, we said, "Alright, let's go with the budget." The years that it
didn't, you know where there was a shortfall, we would have to go back and say,
"We can't be this aggressive with the branches this year, [and] we can't be this
aggressive with hiring new people. We need to adjust your local market by this
much so that we can meet our corporate objectives."

P: Promotions and advertising, were those done from corporate headquarters or
done locally?

L: Early in my career with Barnett, we went through a name change. There were a
lot of strange names out there, like Monroe and Chambliss in Ocala [and] The
Tropical Bank of Sebring, so we said, "We've got to establish a brand." Some
consultant did a study and came back and said, "Barnett Bank." We would
develop the overall corporate image through the holding company's staff. They
would do [most of the print and all of] the television advertising.

P: Is this BBI, the Barnett Banks, Inc.?

L: BBI, right. They would do all of the branding and the image building.

P: This is when you were trying to say, "Barnett, Florida's bank."

L: That [slogan], Barnett, Florida's bank, was probably the second generation of our
first attempts to build the brand image. I think one of our first marketing programs
was, we were telling people that they were half millionaires, because that was
how much business they could do over a lifetime. Then when NCNB [North
Carolina National Bank] and others started coming into Florida, that is when we
said, "Let's differentiate ourselves by saying we are Florida's bank," because we
were at that time the largest [bank in Florida].

P: To put it in context, I've been doing some interviews with executives of
newspapers, and I was a little bit surprised to find that profitability ranges from
about 22-25 percent, which is pretty high. I was wondering if you'd give me some
idea about profitability ranges in the banking business.

L: In the banking business it was considered acceptable to earn 1 percent on
assets. So if you're total asset base was a $1,000,000,000, then that would be,
what, $10,000,000 or something like that? Am I off?

P: You're the banker [laughing].

FBL 22
Page 13

L: Well, 1 percent of assets. Let's make it $100,000,000, you would need to do
$1,000,000. That was kind of the average that people shot for. It's moved up over
time. It's fluctuated around that over time. Anywhere from .75 percent to 1.5
percent was kind of a general operating range.

P: That's not very much though, is it?

L: It's not much on assets. What the newspapers are probably measuring on would
be sales [or equity]. If you equate that to the banking business in sales, you're
talking probably anywhere from 5-10 percent. It's still a fairly low margin. [On
equity we earned between fifteen and twenty percent.]

P: Where did most of your profitability come from? Did it come from consumer
credit, credit cards, and corporate lending?

L: We were trying to be what the market gave us. We knew that we couldn't be a
large corporate bank because there were more Fortune 500 companies in
Minneapolis [Minnesota] than the whole state of Florida. So we focused our
strategy on basically the consumer bank. That meant consumer deposits,
consumer loans, automobile financing, mortgage financing, and things that
related to individuals and small business owners. We would do real estate
lending for owner occupied businesses. We would do real estate lending for
apartments that were related to the consumer market, or development loans for
single family housing developments. That was our bread and butter. When we
got into an earnings pinch back in the mid to late 1980s, we started doing larger
real estate loans on hotels and condominiums and large shopping areas. That
came back to hurt us in a significant way in the early 1990s.

P: Also, at some point, you started insurance and securities operations.

L: We did. We pressed the envelope in trying to enter new business lines that we
thought were compatible with a person's financial picture, like insurance and
securities and that type of thing. Those two business lines didn't mature in any
material way while we were Barnett. I think since then, Bank of America has
pretty much discontinued most of those efforts.

P: What I'd like to do is continue with your career, then I'll come back and ask you
some specific questions about the history of Barnett Bank because I know you're
very familiar with that. Once you leave as Executive Vice-President for
Community Banking, you become the Chief Banking Officer for Barnett. Exactly
what did that job entail?

L: We had a management structure [where] all of the senior officers responsible for
banks or support activitiess, like computer and operations or business lines like

FBL 22
Page 14

commercial lending or mortgage lending, would report up to Charlie Rice.

P: Who was the CEO [Chief Executive Officer].

L: Invariably, and quite naturally, you would have disagreements between the
various senior officers about what priorities ought to prevail. There was no way to
mediate [those differences] except at Charlie's level, and Charlie was not really
interested in settling arguments or arbitrating disagreements. He was more
focused on regulatory activities, investment [banking issues and the legal and
political areas]. So Carter Golembe, who was Barnett's consultant for many
years, was invited in by Charlie to look at the overall structure to see if there was
a more efficient way of organizing the bank.

[End of side Al]

L: Golembe was invited in to see if he could recommend a structure that would be
more effective and more efficient. What he came back with was that all the
factors of production should report to one person, and they call that person the
Chief Banking Officer. [In that capacity] I could work with the senior managers
and set some priorities. Albert Earnest was the president, and Charlie [Rice]
continued to be the CEO. We operated in this structure for about a year, until
Albert retired. Then I succeeded him as president, but my responsibilities really
didn't change. I still had the operating entities reporting to me.

P: So you'd be president and COO [Chief Operating Officer] then?

L: Right.

P: Your job really didn't change all that much?

L: It didn't change at all because we put the production units, support units, [and]
the business line units in the structure reporting to me as Chief Banking Officer,
and that continued when I became Chief Operating Officer. We eliminated the
position of Chief Banking Officer.

P: Talk to me a little bit about the overall philosophy of Barnett Bank from the
beginning, when the Barnett family started the bank and ran the bank. Did that
philosophy pretty much permeate the operation of the banks through your time at
the bank?

L: I think it did in many respects. I think if you read about the Barnett family, first of
all, they were very committed to the community. They felt like it was a
responsibility of the bank, and the owners and officers of the bank, to do
everything they could to advance the community's well being. That was a very

FBL 22
Page 15

early philosophical foundation that continued until the end of the bank's history.
Another key tenet of their philosophy was customer service. They were very
focused on treating customers like [you] would like to be treated, kind of the
Golden Rule. That's what we tried to maintain throughout the course of the
bank's history. They were also very innovative in [many] respects. For example,
they had the first department for women at the Barnett Bank of Jacksonville.
They were the first to offer loans to individuals when years ago banks would only
lend to businesses. Barnett was the first to offer a credit card in Florida. So there
was an innovation emphasis in the bank's operation, but at the same time there
was a conservative emphasis, especially on the credit side.

P: I remember reading about that Jack in the Box teller station, which was pretty
innovative. I guess it was a woman teller that came up on whichever street was
one way, and at the end of the day they would lower it back into the ground.

L: Right. It was a drive-up window that would come out of sidewalk and cars could
go by and transact their banking business like they do at a drive-in teller today,
but at the time the building wasn't configured for drive-ins and this was their
innovative way of saying, "We can offer this service too."

P: Also they went to computers and check-sorting fairly early.

L: They did. A lot of the technology of banking was introduced at Barnett. That's
what we tried to do even in the latter years, was to press the envelope of
technology and see what it could do for us.

P: One of the things that David Ginzl's book points out is why Barnett was so
successful, particularly at the time when it became the largest bank in Florida.
What was the key to that success?

L: In my opinion, the key was Barnett recognizing what Florida was and developing
a strategy to take advantage of that opportunity. I would contrast that with
Southeast [Bank]. Southeast was headquartered in Miami.

P: This is Charlie Zwick's bank?

L: Charlie Zwick's bank, Southeast Bank Corporation. Charlie Zwick had been a
major player in the [President Richard] Nixon administration as Director of the
Budget. He had friends in large banks in the northeast. He wanted to create a
J.P. Morgan blue-blood bank in Florida. He emphasized corporate customers,
large loan, and all the things that were important to the New York banks and the
Boston banks. But that wasn't the market in Florida. Barnett, on the other hand,
recognized that [Florida] was a people's [market] rather than a corporate name.
We emphasized the importance of the consumer and the small businesses, while

FBL 22
Page 16

he was focused on the large corporate and the large real estate market. We tried
very aggressively to expand to fast growing markets with branches. Southeast
basically said, "We've got all we want down here in the Gold Coast and we're not
going to spend money in other parts of the state like Naples, St. Pete[rsburg],
and Tampa." There was a very clear strategic difference between the two banks,
and I think that created the opportunity for us to move ahead. We emphasized
growth and they emphasized the corporate relationship.

P: Also, I think Guy Botts was one who was pursuing this expansion, so obviously
the corporate office made some good choices.

L: Guy Botts was the visionary for Barnett. There was no question that Barnett
ended up very consistent with Mr. Botts's vision. He wanted us to be the largest
bank in Florida. He wanted us to be represented in all the major markets in
Florida. He wanted us to be considered the premier financial institution not only
in the state, but in the Southeast. That's where he got sideways in his thinking.
He had a wonderful strategy for Florida, but he did not have a very good vision
for how Barnett could [make a transition to] regional banking environment.

P: For example, moving into Atlanta, Georgia?

L: No. He was an advocate early on for regional banking because he felt that if the
region, defined as Florida, Georgia, North and South Carolina, Tennessee,
Alabama, Mississippi, Louisiana, Virginia were permitted to merge with each
other, we could develop banking institutions that were large enough to compete
with the Boston banks, the New York banks, and the Chicago banks. But we
needed time. So he was an early advocate of regional banking. What he didn't
see as clearly, as it turns out, was that Florida's growth curve was so strong that
other banks could do in Florida from out-of-state what we did in state. [Barnett
expanded] from a slow growing Jacksonville market [as its base of operation],
pa[id] a premium to a bank in Naples, [a much faster growing market,] and that
[bank's] growth curve would [add to the earnings per share of the combined
organizations]. That's exactly what NCNB and First Union and others did in
Florida. They came in, paid a premium, and the Florida growth curve [which is
much faster than North Carolina's caused little or no dilution to its earnings per
share growth]. Had we gone out of Florida to try to buy something, we would
have created a lot of dilution to our shareholders, and we probably would have
been bought earlier than we were.

P: When Barnett expanded, the major expansion was in the mid- 1970s?

L: It's the [early] 1970s and 1980s.

FBL 22
Page 17

P: You bought Brickell Bank in Miami, but you also bought some small banking
chains. I presume you opened new banks, you chartered new banks as well.

L: We chartered new banks until it became inefficient to do that. We bought banks
very aggressively, not so much in the late 1970s because our stock got hit pretty
good, but in the 1980s and 1990s we started very aggressively buying banks,
and they became increasingly larger banks. At the same time, we were the most
aggressive brancher in the United States. We built more branches in the 1980s
than any other bank in the country. We combined acquisition with de novo
expansion, which produced a very good combination of profitability [and growth].

P: What were Atlantic Bank and [Florida] National Bank doing at this time?

L: Atlantic Bank was expanding, but they weren't expanding as aggressively as we
were. Then they sold out fairly early to First Union. Florida National Bank was still
fairly conservatively run. They didn't expand very much. They would buy banks
here and there, but [there was] no strategic emphasis to that. Then they were
bought by First Union after a while.

P: By 1971 Barnett was something like the [fourth] largest bank behind those two,
and then, very rapidly, that changed.

L: We caught Florida National and [then] we caught Atlantic, [to be] second to
Southeast. I think in the late 1980s we caught Southeast. Now, I may be wrong
by a few years, but we became the largest bank in Florida, I think, in the late

P: In fact, ultimately you ended up being twice as large as Southeast.

L: Right.

P: You, at one point, were quoted as saying that Barnett was a special place, sort of
like a corporate Camelot. What do you mean by that?

L: It relates to more of the people association and relationships than anything else.
We were in business together to run a big company. I never worked anywhere
other than Barnett so I didn't experience this directly, but people that would come
in would tell me that Barnett was a special place. I'd say, "Well, tell me why you
say that." Talking about the senior management group, they said, "It's obvious
that you like each other, you respect each other, and you trust each other, which,
in a lot of organizations, there's more political backbiting and that type of thing."
We had a culture [where] we had a good time together because we liked each
other. We could rally around an objective and nail that objective almost every
time because people were pulling for the same end result. It was not a divisive

FBL 22
Page 18

organization. It was an organization that was single-minded in what we were
trying to do, and having a good time doing it.

P: W.B. Barnett had a great vision as well about coming to Jacksonville and seeing
the future of Florida. Over a period of time, W.B., W.D., and Bion Barnett, all of
them, ultimately get out of the banking business. Why do you think that
happened? Is it just that future generations were not as interested in banking, or
that the banking strategy changed?

L: I think the key is that the Barnett's were very good bankers, but they were like
Charlie Zwick in a way. They were focused more on northeast Florida, they
were focused on their ownership position in the bank, and they were just fairly
conservative as it relates to taking advantage of the growth opportunities in [other
parts of] Florida. For example, [they] did buy a number of banks after the
Depression because banks were going under around the state. One of the banks
[they] bought was the First National Bank of Ft. Lauderdale, which would turn out
to be a wonderful institution, basically the mother bank of another holding
company. But the Barnetts decided to sell it back in the 1940s because it was too
inconvenient to go to board meetings down there. So it was a conservative
mentality, and I think Guy Botts and others before Guy Botts saw the
opportunity. The real shift from family to outsider occurred when Mr. Botts was
elected CEO.

P: I noticed that the Barnetts also were smart early on in investing in land, they
owned a St. John Power and Light Company, and trolley companies, so they got
into some peripheral businesses and other investments as well.

L: It was a big family. I think that they recognized that there were opportunities in a
growth market like Jacksonville that were beyond the banking business, and they
were smart people and they [took advantage of] that.

P: One of the things that I thought was fascinating in the book, at some point after
the 1926 hurricane, they were wanting to merge with [Florida] National Bank, and
Ed Ball prevented that merger. Do you happen to know why?

L: I think Ed Ball had in mind having his own bank. He didn't want to combine and
dilute his influence and power with anybody. He did a very, very good job with
Florida National after he came into control. He is the one that expanded it beyond
Jacksonville, and essentially created the largest bank in Florida.

P: What's your take on Ed Ball? Everybody I talked to talks about his extraordinary
influence both politically and economically in the state, but everybody talks about
him as kind of a mysterious person who is never out in the open. He always
operated in the dark and nobody's exactly sure what he was up to.

FBL 22
Page 19

L: I met Mr. Ball once, and that was at a dinner at the River Club. I was introduced
to him, so we had probably no more than two minutes of social interchange. I
didn't know him well. Everybody knew him by reputation. He was an extremely
smart and determined businessman that created a wonderful business
organization. You can't overemphasize his political influence. But he was a
private person. He lived in a hotel in Jacksonville. He generally ate by himself at
either the hotel or the River Club. I never talked to him in a business context, so I
don't know whether he was clear or nebulous in the way he communicated, but
he was doing something right because he got about everything he wanted.

P: He was sort of known as a rough and tumble kind of businessman. He was hard-
nosed, and that's one reason the DuPont's didn't take over their Florida assets
and St. Joe Paper Company. I can tell you from having talked with every Florida
governor, they all knew to find out where Ed Ball stood on a particular issue.

L: Right, and nobody ever thought he was going to die.

P: [laughing] Least of all Ed Ball. Once World War II is over, banking in Florida is
going to change really dramatically. Barnett Bank is going to try to set up the first
bank corporation in America. That was in the 1950s, I guess?

L: Yes. This was a holding company concept that, I think, Guy Botts introduced.
Florida banking laws were fairly antiquated, so there was no vehicle for common
ownership [of] banks. Mr. Botts identified the Bank Holding Company Act as a
possible vehicle for Barnett expansion. At the time he was the lawyer for the
bank rather than an officer for the bank, so he was looking for vehicles that would
allow Barnett to expand under a common ownership and that was the vehicle
that he identified.

P: But the Federal Reserve Board turned that down. Do you know why they would
do that?

L: They didn't turn down the Bank Holding Company vehicle, they turned down a
merger of four large banking organizations in Florida, Barnett, Exchange, First
National of Orlando, and, I think, Southeast Bank.

P: If that had gone through, wouldn't that have changed the face of banking in
Florida pretty dramatically?

L: It would have been a very, very significant change. I think the Fed[eral Reserve]
felt, as it turned out to be, correctly, that each of those banking institutions was
large enough and influential enough to become the lead bank for its own holding
company. So that's what happened. When that [merger] was turned down, they

FBL 22
Page 20

each went separate ways [and] used the Bank Holding Company Act as a vehicle
for expansion throughout the state of Florida.

P: In the 1960s and 1970s, you start getting into more real estate investment. I
guess it's called a REIT, a real estate investment trust.

L: Real Estate Investment Trust was a vehicle that Mr. Botts implemented at the
bank to allow developers to access funding sources beyond the conventional
[lending activities] of banks and insurance companies. It was a new concept, and
it hadn't developed and matured enough to recognize some of the pitfalls. One of
the pitfalls was [when the REIT sold stock it would] have a large sum of money
available for investment in real estate. [It would then] pay [its] lending officers on
a commission basis to lend the money [to borrowing developers]. Obviously,
there's something wrong with that model in that, clearly, the more money they put
out, the more money the [lending officers] would make personally. [This was
done without adequate credit quality control systems and it came back in
uncollectible loans.]

P: So a lot of that turned out to be bad loans for the bank?

L: Not for the bank, but for the investors [who bought stock in the REITs].

P: But then that affects your stock price.

L: Well, the bank was connected to it by name. There was no guarantee from the
bank or anything, but there was more of a perception or image that there was
something wrong with the bank when Barnett Winston REIT went out of
business. I remember, in Gainesville, trying to explain to some of my customers
who had invested in these REIT's that the bank didn't guarantee [their
investment]. [They said,] "But, no, no, it had the bank name on it." I said, "Well,
yes, but read the documents that you signed." They were not happy, they were
not happy at all.

P: Another thing that begins in the late 1970s or early 1980s, is the use of the
ATM's [automatic teller machines]. Barnett Bank was at the forefront of that as

L: That was one of my first projects. I was the project manager for [Barnett in
testing] the feasibility of ATM's. It was an interesting concept. I remember coming
home and telling [my wife] Delores. I said, "Delores, you won't believe that
they've got a machine now where you can make a deposit, transfer money
between your accounts, and make a withdrawal anytime, twenty-four hours a
day." She said, "That'll never fly." I said, "What do you mean, 'It'll never fly?'" She
said, "I'll never use one because if I go up and get money, somebody's going to

FBL 22
Page 21

hit me over the head and take my money." I said, "Well, that's an issue that we
have to address." But yes, we went through kind of a test mode of putting ATM's
in the banks, putting ATM's in the shopping centers, and putting ATM's in various
locations just to see what kind of usage we could generate and whether or not it
would be feasible. We concluded that it would really work well if we could transfer
enough transactions to the machines and we could reduce our labor costs
through the teller line. That never materialized, the transaction number kept
going up, happily, because we were getting more customers, but we were never
able to displace the cost of the ATM with the reduction in teller expense. The
good news is that we were doing more business and we were able to absorb the

P: It's certainly, in many ways, more efficient for the customer.

L: Right. By the way, Delores never goes to the bank anymore, she always goes to
the ATM.[Laughing]

P: What is the essence of the ATM's now? You see a lot of these new bank
charges. Some banks charge if you see a teller or if you get a checking account
total. Some people charge for using the ATM's if you use them a certain number
of times a month or if you're not a member of that bank and use one of the other
credit cards. Is this a way for the banks to increase revenue?

L: Let's go back a little bit. In the 1970s, banks were given the right to pay rates
equal to S and L's [Savings and Loan companies] [on time deposits that single
change in the law caused] a sea change [that would change forever the way
banks and S and Ls did business.].

P: Because the prime rate had been regulated.

L: It had been regulated. The deregulation of rates allowed the banks to pay
customers more for their deposit accounts. At the time, I said this may be good or
it may be bad, depending on the customer. [What had been happening, before
deregulation, was], depositors, who were not able to get market rates on their
deposits, [were] subsidizing the lower balance [customers] and the [customers on
which] we were losing money. So when the deregulation occurred, the banks
went to market [rates] for the big deposit customers on their CD's [certificates of
deposit] and other deposits, which eliminated the subsidy for some of these lower
balance accounts. Over time, when you invest in new equipment like ATM's or
new facilities like branching, you've got to find a way to pay for that, because
again, you're giving your deposit customers a market rate. If you don't maintain a
balance so that the bank can earn sufficient money to pay for the activity on your
account, then they're looking for ways to say, "Okay, we're not making money on
you, what are other ways that we can do that?" One is an ATM charge. They're

FBL 22
Page 22

also trying to transfer activities away from [human] tellers, the more expensive
part of the cost equation, to machines. So [some banks now] charge to see the
teller with the hope that that will encourage behavior away from the teller toward
a machine.

P: The average consumer looks at it from a different perspective. They would say,
"Look, you've got our money. It's our money, why should we pay to cash a

L: That is a hard argument to address to a customer's satisfaction. But the real
bottom line is that "You have my money Mr. Banker," but Mr. Banker comes back
and says, "But the average balance in your account is $50 a month and we can't
invest that to cover the [cost of the] activity [in] your account." It's hard to
communicate to a customer that they just aren't a big enough customer for free

P: There's always, at some point, the break even. So if they have a deposit of
$1,500 or whatever it might be, you figure, at that point, you will not charge them
for these services.

L: Again, it cost just as much to run an account that's $100 average balance as a
$2,000 average balance. We also try to find ways so that people who can't keep
a larger balance can have banking services, but they have to have it in a very
selective way. Like, you can't go to a teller, you've got to go to an ATM.

P: And only so many withdrawals and things like that per month.

L: Exactly, limit the activity. So it's a tough issue.

P: One thing that came up earlier, I wanted to go back to. It appears to me that
Barnett hired women very early on. I remember Katherine Bell was the first
woman officer, and that would have been right after World War II, would it not?

L: Either in the late 1940s or early 1950s, yes.

P: How have women in the banking business progressed since then?

L: The banking business has reflected most of the professional occupations, like
accountants and doctors and veterinarians. If you look at what's happened over
years, there are more banking recruits to management programs that are women
as opposed to men. Same as there are more females in medical school now than
males. There are more women in law school now than there are men. It just has
taken awhile for opportunities to equalize. I think you'll find that'll continue. Even
in corporate America now you're seeing more and more women CEO's. It didn't

FBL 22
Page 23

happen as fast in banking or [anywhere] else because they didn't have the base
of experience because they didn't start as early as the guys. But now, you'll find
that we have probably three or four branch managers that are women to every
one that's male.

P: Because at one point, I would guess in the 1950s or 1960s, it was a bastion of
white male supremacy, and the only women you saw were tellers or secretaries.

L: Clerks or whatever, yes.

P: What about minorities? How has Barnett Bank dealt with that particular issue?

L: I thought we dealt with it very effectively. We had a very committed program of
trying to hire minorities. We were frustrated in a way because we would go to
schools like Florida A&M, and every business that had a social mission was
looking for qualified African American students to hire. The large [industrial]
corporations paid substantially more than we could afford to pay, so we were
always behind the eight ball in getting the numbers where we wanted them to be
because we couldn't [pay competitive salaries without] destroying our
compensation structure. They were getting pretty good jobs. I think it [the
program to recruit minority workers] has not been as successful as [recruiting]
women, but I think, for the most part, the industry is doing well. Barnett could
have done better, but it's just a challenge that's a tough one to meet.

P: Let me ask you about another circumstance that was highly unusual. In
December 1980, I think the prime rate was something like 21 12 percent, and now
we have the lowest interest rate in forty-one years. How does the bank operate?
How do you lend money when the prime is 21 12 percent?

L: Well, you don't have many borrowers that want to borrow at that rate. We were
lending money to consumers [to buy cars] at 15 percent when the prime was 21
[percent] because we didn't want to alienate that business. We knew that the
interest rates fluctuate and they'd be down, and a lot of banks were getting out of
consumer business at the time, including Southeast. We just said, "No, we're not
going to do that."

P: Would you do it for long term, fixed mortgages, and that kind of thing?

L: We would do it for automobile loans. At that time we were not in the mortgage
business except [for] adjustable rate mortgages [and we didn't do much of that].

P: That's where the adjustable rate came in, partly because of that?

L: Right. So that was the only way that mortgage lenders could make sense of

FBL 22
Page 24

lending money. Not a lot of mortgages were extended when the rates were that
high. Nobody could afford it.

P: What about now, when it's so low?

L: It is equally difficult, in my opinion, for banks to make money when rates are high
and rates are low. Especially, if they just are steady high or steady low. Banks
can make [more] money if the prime [rate] fluctuates probably in the range of 7-
10 percent and it moves up and down a [steady] fashion. You can adjust deposit
rates for just loan rates and maintain the margin in a fluctuating environment
easier than you can in a steady environment. It's a tough row to hoe for the
banks right now.

P: Have you agreed with the Federal Reserve Board's decisions over the past two
years to try to deal with the economic slowdown? They cut rates very slowly, a
quarter point here, a quarter point there, and then, recently, they cut it a half of a
point. I think a lot of people were a little bit surprised by that.

L: You know, it's hard for me to argue with [Alan] Greenspan [chairman, Federal
Reserve Board, 1987-present]. They [at the Federal Reserve] have so much
more information than the average lay person has that it's almost impossible to
second guess them. I think, philosophically, he's doing the right thing, he's trying
to stimulate the economy. My only question is, [when] the rates are so low [to
begin with], will another half a point or another quarter point do anything? You
get a point of diminishing returns.

P: It didn't before, so you wonder.

L: There may be some negative implications in the international markets if our rates
go [down].

P: I think a lot of it, without knowing much about it, is psychological. Somehow they
perceive that this might change people's attitude and they may buy more cars or

L: Right, and that is true to a point. But at a certain point, and I don't know where
that is, nobody's going to buy incrementally more because they've already done
what they're going to do.

P: Another thing that came up was the deregulation of the thrift industry. This led, of
course, to the terrible savings and loan scandal and was a huge cost to the
federal government. What was your reaction to this deregulation and the
guarantee of FSLIC [Federal Savings and Loan Insurance] up to $100,000? Did
you anticipate that was going to be a problem not only for the savings and loans,

FBL 22
Page 25

but for the banks?

L: I think the S and L's were in a competitive disadvantage and were in trouble
before deregulation. I think they were almost an obsolete industry, and this was
their attempt to get back to parity with the banks. I don't think the regulation
created a problem, I think incompetent or criminal operators created [the

P: Greed.

L: Well, it was greed and it was also competitive pressure. It was a lot of things. I
think the S and L industry was in dire straits, and they took increasingly higher
risks to try to get out of the mess they were in. The increasingly higher risks
created more problems, and there were just basically some [criminal] operators
out there too.

P: You get things like Lincoln Savings and Loan where there was excessive
spending on art, boats, vacations, and fancy offices. So a lot of that money was
obviously wasted in that sense. How did the savings and loan scandal affect

L: It had a positive effect to the extent that S and L customers were looking for safe
havens, and banks were generally considered to be more conservative and more
prudent than S and L's at that time. It had a negative effect because in a lot of
ways some people don't differentiate between banks and S and L's. They're
having their troubles, so the banks are likely to have their troubles. So for the
discriminating customer, it was a positive [development]. For the non-
discriminating customer, it was negative. On balance, I think it was probably a
positive [development].

P: What's your view of banks having the opportunity to become what we call a full-
service financial institution, selling securities? You might remember the Glass
Steagall Act separated investment banking from commercial banking, but I guess
that's been changed back to where banks can sell securities.

L: It's been changed back with some fences around the activities that are permitted.
I think it makes sense. I think that, if you look at it from a customer's point of
view, it would be better for me, for example, as an individual consumer, to go in
and talk to somebody or some organization about the full range of financial
services rather than having to go to a mortgage lender for [a home] loan, a car
lender for a car loan, an investment adviser for stock or bond information. I think
it's better for the customer. Now the question is, and [it's an] unanswered
question at this point in time [is], are financial organizations that offer broad
range of services able to offer those services in a way that benefits the

FBL 22
Page 26

consumer, and not cross over the line to the point of their taking advantage of a
customer in requiring, "If you're going to buy this service, you've got to buy this
service [from me]." I think there needs to be some sort of constraints or fences
around the activities of these companies.

P: I notice that when institutions like Sears and Roebuck started offering investment
services, they were obviously not prepared sufficiently, I presume, to make those
kind of decisions. Are most banks prepared to make those kinds of decisions?

L: Probably not. You'll notice that most banks will, if they want an insurance
company, they'll go out and buy an insurance company. Then they'll put that
insured agent into a banking facility. So the expertise and the qualifications and
the capabilities are there, but a lot of times you find that there's a lack of
integration between the cultures of an insurance company and the cultures of a
bank. The same with a security brokerage firm.

P: Let me go back and talk about, and I was wrong, the Florida Legislature allowed
branch banking in 1975.

L: Right.

P: Why was there so much opposition from small banks?

L: Because they felt like that the larger banks, like Barnett and Sun and Florida
National Atlantic, would come into their markets. For whatever reason, they just
felt they didn't want that competition. That's why it was constrained to counties,
because a lot of the smaller banks were in rural areas where there was no
holding company bank represented, so they wouldn't be threatened by that.

P: But even today, with the large mergers, there are small banks popping up all over

L: That's a reaction to the level of service or the operating strategy or the
philosophy of the larger bank. They will continue to be successful because, for
example, Bank of America has indicated they have no interests in certain lines of
business. In the case of Barnett, those were our principal lines of business. So
there are going to be banks that specialize in those areas that are going to be
organized until the large banks start competing in those market lines.

P: So there's always a niche for automobile loans and that sort of thing.

L: Absolutely, and personal service too, which is the other [advantage].

P: Yes, they know who you are, as a customer. What was the key to NCNB?

FBL 22
Page 27

Somehow they were able to get around the Florida law. I can't remember,
vaguely it seems they bought some financial institution and let that be the
opening into the Florida banking system.

L: Right. They bought a trust company in Orlando [because] the law allowed out-of-
state banks to buy trust companies. Then they made the argument that the trust
company should be considered a bank. Actually, [the trust company they owned]
bought the small bank in Lake City and then made that argument. They prevailed
and they were allowed to keep it, and then they used the Lake City bank as the
basis for their Florida expansion. You've got to hand it to them. That was a very,
very clever initiative and a very clever strategy, and it gave them a head start on
everybody else.

P: So it changed what Barnett's philosophy was at that point.

L: When the regional banking Pandora's Box was opened, as I mentioned earlier,
Mr. Botts said, "Give us time to organize and become bigger." He thought
Florida would be, because it was the largest and the fastest growing state, the
financial center of the region. What he didn't recognize was the difference in the
growth rates, which caused out-of-state banks to be able to pay more for Florida
banks than we were able to pay for out-of-state banks.

P: This is the Regional Reciprocal Banking Act of 1984?

L: Right.

P: What that did, in effect, is allow any kind of bank to open any kind of branch and
be able to participate in mergers.

L: It allowed any state who passed the reciprocal agreement. Like Florida says, "We
will reciprocate..." [with Georgia and] said, "We'll reciprocate with Florida," it
allowed [Florida] banks [to buy Georgia banks and Georgia banks to buy Florida

P: So you could move to Charlotte with Barnett and NCNB could move down here.

L: Right.

[End of side A2]

P: One of the things that is difficult for you when you take over as the COO, Barnett
Bank was probably at one of its lowest economic points. The stock was down,
earnings were down. How did you turn that around?
L: How we got in the mess to start with is, we had too many loans to large real

FBL 22
Page 28

estate projects. That happened in the late 1980s when we were looking for
earnings, and these were great opportunities, [for big fees], and we did it. When
we took over, it was clear that the first thing we had to do was clear up the credit
problems. One of the recommendations that Carter Golembe made was that we
have a Chief Credit Policy Officer. That person would be responsible for
establishing credit policy for the organization as well as anything else we thought
appropriate. We hired a guy that was perfect for the job. He consolidated into the
holding company the workout process for bad loans. His name is Richard Jordan,
and he brought in some people from Texas that had experience [collecting] bad
loans. We turned over the bad loan portfolio to him and said, "Clean it up as fast
as you can." He made a lot of enemies in doing that, but he got the bad loans out
of [the bank's portfolio] in a remarkably fast period of time.

P: These are known as non-performing assets.

L: Exactly.

P: That sounds better. [Laughing.]

L: They're better than bad loans too [laughing]. They weren't bad people, but [it
was] just the circumstances, and we were probably at fault because we loaned
the borrower more money than they could reasonably repay. I'm not saying that
the bad loans equate to bad borrowers, but we had our share. Richard went
about aggressively cleaning that up.

P: It was interesting to learn that Hurricane Andrew really helped Barnett because,
after all the destruction, everything had to be rebuilt. It's interesting to note that
there's a disaster, but in the long term it really helped the bank.

L: It helped the bank in two ways because it created good business for us, and it
also created insurance payments on distressed properties that were paid back
through the insurance rather than the borrower. So in that tragedy there was
some positive for us. But we also felt like, as we moved into the 1990s, that we
couldn't just focus on fixing the bad, we had to take advantage of opportunities.
We started some aggressive programs to attract business and the use of
technology. It was at that time, you may recall, that we agreed to buy First

P: Southeast you tried to buy but didn't get it.

L: No, First Union got them. So we started not only fixing the problems, but looking
for opportunities to expand.

P: Also I've noticed that there was a push to get senior accounts and there was a

FBL 22
Page 29

big ad with Betty White from the Golden Girls television show.

L: Now that was in the 1980s, but that was still an example of our trying to go to a
niche marketing program. We didn't want to be generic. We went to specific
areas of opportunity in the state, and the senior market is clearly an example of

P: And then a lot of credit cards at universities and things like that.

L: Right, and a newcomer program too. We have so many people moving into the
state, so if there's a way that we can connect them to Barnett before they leave
their home in New Jersey or Wisconsin, we'll have them as a customer and they
won't have to make a decision when they come down here.

P: Talk about the purchase of Southeast. It seems to be, from what I read, that
Charlie Zwick was not particularly cooperative in selling to Barnett. Or was it that
First Union just outbid you?

L: Well, there were two events.. You're right, he was totally uncooperative. He
would talk to Barnett, but he apparently did not want to sell the bank and
convinced his board that it would not be in their best interests to sell the bank to
Barnett. I was not involved directly in that negotiation, Charlie [Rice] was, but
Charlie would come back and say, "Basically, we have an understanding," and
then within a matter of weeks they didn't see eye to eye. It progressed to the
point where the FDIC felt like the bank was in jeopardy, and they basically took
over [Southeast]. They took over the bank and then started negotiating with
potential buyers to buy [it]. So it wasn't Charlie Zwick in the game anymore, you
were negotiating or talking to the FDIC. We had our own commercial real estate
problems [and] we couldn't really tell how deep their problems went, so we were
reluctant to bid aggressively because, if they had major problems, [confused with
our credit problems, it] could have [pulled us both under]. So First Union basically
put a bigger number on the table to the FDIC and was able to buy it.

P: They were in the middle of a very aggressive expansion.

L: Right, and they weren't encumbered by a lot of these real estate loans. They
were able to manage those a lot better than we would have been.

P: Yes. Eddie Crutchfield [CEO of First Union Bank] had a lot of money to invest
and that was what they really were trying to do. They saw the benefit of the
Florida market. So, you thought of the merger with First Florida, is that right, or
did you purchase?

L: We bought them and merged them. It was both.

FBL 22
Page 30

P: Was that somewhat a reaction to not getting Southeast?

L: To some extent it was. We had already established ourselves in south Florida as
a major financial institution. We had not done that in Tampa. We were an also-
ran in Tampa. So it was an opportunity for us to bulk up in the Tampa Bay area
and become the largest institution in that market. But it was also the last major
holding company in Florida to be on the block. We needed something positive to
get the attitude of the people in the organization excited again, and this was the
opportunity we took. It worked out beautifully.

P: Some critics in the beginning said you paid too much.

L: They said that, and I can remember being in the office of an investment banker in
New York and getting my butt chewed out because [he thought we paid too
much]. I said, "Look, you can either own our stock or you can sell our stock, but
we think this is the right thing for us to do and we think we can pull it off. If you
don't, sell our stock."

P: And the stock did go down.

L: It did go down, but it came back up pretty nicely after that.

P: One of the objectives in this merger is to save a lot of money by closing
overlapping branches and cutting out some personnel. Did you achieve the
savings you had anticipated that you would achieve?

L: We did, and we did a very, what I would call, ruthless job of identifying what costs
we wanted to eliminate and what areas and how much. It came down to
branches and people. We tracked that probably better than we've ever tracked
anything. We had a person, Tom Yochum, who is now with SunBank,
responsible for that integration. We actually exceeded the cost reductions that we
first anticipated.

P: That was quite a bit. The first year you said that you would make savings of
about $60,000,000. That's a lot of money.

L: Right, it is a lot of money. But again, there were no social issues in this merger,
so we didn't have to worry about senior management or boards of directors or
anything like that.

P: Speaking of social issues, at one point, again I've forgotten the time, the Justice
Department charged that you had discriminated against minorities in lending
practices. I presume this is what they call red lining.

FBL 22
Page 31

L: That's a term that's used in the accusation, I think.

P: What was the outcome of that?

L: We were exonerated totally. The Justice Department was using their clout to, in
my words, extort from banks a settlement that they could use to go on to the next
bank. We basically said that we were not guilty of discrimination, that all of the
examinations from the FDIC and the National Bank Examiners showed that there
was no discrimination practice going on, and we did our research and found the
same thing. So we kept pushing back on them and pushing back on them and
pushing back on them, and they finally went away without anything happening.

P: I can remember specifically one response to what the Justice Department was
doing. It was not from your bank, it was from another bank. They asked, "Why
should a private bank be responsible for lending money to people who clearly are
bad credit risks?" If the federal government wants them to have property, let
them go through HUD [Department of Housing and Urban Development]. There
are other alternatives, even cheaper alternatives, as it were. So you see this as
somewhat political, vindictive?

L: I think the Justice Department at the time was in a position of trying to bring this
discrimination issue to the forefront. The way they were doing that was to pick
out some of the most visible banks in the country and make these allegations
about discrimination. Typically, what would happen is, the bank would pay off
rather than go through an uncertain process. So we just said, "No, we're not
going to pay off. We're going to prove to you that there's no discrimination here,"
and that's what happened.

P: That was costly to you.

L: It was costly, but it would be better for us to do that in our opinion. I have to give
Charlie [Rice] credit for this position. He just basically says, "If we're not wrong,
we're not going to cave in. We'll spend whatever it takes to defend ourselves."

P: Explain to me why you consolidated into Barnett Bank N.A.

L: Let me make one other point on that other issue before we go to that question.
The FDIC insurance premiums are paid by banks to the government, so it's
never cost the government a dime [to bail out a failed bank]. But because this
insurance [fund is managed by] the government [it] perceives itself as doing a
favor to the banking industry. Because of this [perceived] obligation that [banks]
have to the government, they attempted, and in fact did, shift a lot of the social
programs that they wanted to implement, but didn't have the money to

FBL 22
Page 32

implement, to the banking industry. That was, we thought, inappropriate, but [we
didn't] argue, [as] some people did, to eliminate the FDIC because the customers
would say, "What are you doing? Now I don't have my deposit insured." It was a
damned if you do, damned if you don't situation. Okay, remind me again what
you just [asked].

P: Barnett Bank NA.

L: Oh, the consolidation. At the time [we had] eighteen or nineteen separate banks,
we had boards of directors, regulations, and examinations that were unique to
each bank. So [when] the examiners came in to examine us, they would go to
every bank and go through their process. We found that our bank presidents and
our senior people were spending more and more time with regulators and less
and less time with customers. They came to us and said, "Let's consolidate. We
can save a lot of money, we can save a lot of time, and it makes sense." So
when the bank presidents said that to me and we had the information systems to
allow them to manage their own local markets, [it did make sense]. [We had
separate banks] because we had a balance sheet and an income statement for
each bank. At the end we didn't need that for each bank because we had other
information systems that allowed us to manage the market locally without all the
regulatory burden [necessitated by separately chartered banks].

P: So this is more of a legal, efficient change. It didn't change how you did business
or anything.

L: No, not at all.

P: So the customers weren't affected in any way.

L: Not at all. It was an inefficient way to operate.

P: The major question then, in 1997, after you had a good, very profitable year and
the bank had come back, why sell to Nation's Bank?

L: That is a question that I've been asked a lot. I'll have to tell you that if you looked
out three to five years, Barnett could have operated very successfully, very well,
and our earnings would have grown at a very attractive rate. Now if you
extrapolated a price earnings multiple on that earnings per share growth stream,
it would have probably produced somewhere in the $75 to $80 per share range
as a stock price in five years. There were a lot of dynamics working on the
banking industry. Growth was slowing down, margins were shrinking, [and]
credits were becoming problematic again, not just in Barnett, but the industry.
Also, the regulatory environment, the political environment, was uncertain. You
look at all of those factors and you say, "If we can get [a price for our stock now

FBL 22
Page 33

that we might get] five years from now, [if everything went well it would be good
for] our shareholders." [And producing attractive returns for shareholders is one
of the responsibilities, if not the primary responsibility, of management.]

P: And you did get that. You got $76 a share, I believe.

L: Something like that, right. So what we did was, we got what we felt we could
produce over a five year period five years before that, and we eliminated all the
uncertainty and risk from operating the bank in a very challenging environment
over the next five years.

P: I'm guessing that the employees were opposed.

L: Well, I was opposed. It wasn't my idea. Charlie initiated this consideration of the
selling of the bank, but when I sat down and went through all of the issues that
we needed to deal with, it convinced me that it was better for the shareholders to
do it than not do it. The employees were for the most part opposed to it, because
we all have an emotional attachment to the company. It was a special place and
we didn't want it to change. I tried to communicate the reasons for it. Whether I
did that effectively or not I don't know. I was just up at the [Jacksonville] Jaguar
[professional football] game on Sunday, and three Barnett people came up to me
independently and introduced themselves and said, "We worked at Barnett,"
[and] "We want to tell you that we came out great. I bought a new house with my
stock that I had." So it's worked out well for most people.

P: Was it going to be inevitable that you were going to be taken over? Because
once you get Barnett Bank NA, doesn't that make you a little more of a takeover

L: Not really. It wasn't the organizational structure that made us vulnerable, it was
our niche. We were in the middle between the mega-banks and the community
banks. We were trying to develop information systems for management and
about our customers that would allow us to get bigger, but still act like a small
bank. We had technology that was being developed to help us do that, but that
was one of the uncertainties, whether that information system would work [or

P: Did First Union also make a bid?

L: I believe they did. I think invitations to bid were extended to ten or twelve banks,
and I think six or seven actually put a number on the table.

P: Why Nation's Bank?
L: It was the highest bid. That was one of the criteria that Charlie Rice established,

FBL 22
Page 34

that there were no social issues here. It was a sale, and whoever put the highest
number on the table would be likely to get the bank.

P: What's your view of Hugh McCall [CEO of Nation's Bank]?

L: I don't know him very well. You've got to admire the fact that he's put together
one of the biggest banking organizations in the country. If you measure [him] on
the basis of what value he's created for shareholders, which was his primary
responsibility in my opinion, he hasn't done a very good job. But you know, he's
accomplished his personal objectives, I suppose, and that's maybe what's
important to him.

P: That would have been, at that time, I guess, the third largest banking
organization in America.

L: Second or third.

P: What has happened since First Union and Wachovia have merged?

L: Remember Nation's Bank bought Bank of America, which was a huge
organization, after they bought Barnett, so that catapulted them up to number

P: How do you see all of this shaking out? Is it good for banking, good for the
economy, good for the consumer, that we're having these mega-banks develop?

L: I don't think it's necessarily bad because if you look at Canada, they only have
five banks in Canada, and I think it's competitive and they're getting the same
product lines at a reasonable price. So I don't think it's necessarily bad. But the
people in Canada grew up with that so they became accustomed to it and they're
comfortable with it. What we're doing now is changing the way customers have
done their banking business, and some of them adapt very well, some of them
don't adapt at all. So you're going through this period of transition, and during this
period you're getting these new community banks springing up that are giving the
customers [an] option to the larger banks. I think what you'll find is a relatively
small number of huge banks and a relatively large number of small banks. At the
end of the day, the customer will gravitate to whichever institution satisfies [his or
her] needs.

P: So the small banks can still survive in that kind of competitive atmosphere?

L: They can thrive. That's what's happening. I'm talking to people who were former
Barnett people who have gone to smaller institutions and are doing very, very
well, again because customers either adapt or they don't adapt. If they can't get

FBL 22
Page 35

used to the way Bank of America or First Union do business, they can find a
smaller bank.

P: How did you feel on January 9, 1998, when Barnett went out of existence?

L: I felt sad. I felt frustrated to the extent that my desire would have been to
succeed Charlie [Rice] as CEO. But that obviously wasn't going to happen, so I
was sad about that. I was frustrated. As a competitor I was down because when
you're acquired that means you lose the game. It was not a happy, competitive
event for me. On the other hand, I had other personal ambitions that I wanted to
achieve, in terms of what I wanted to do with the rest of my life, and this gave me
the financial wherewithal to do that. So from a personal perspective, it was not all
bad. The most frustrating thing, or the least desirable thing, that happened as a
result of [the sale] is not getting out of the banking business, [rather] it was really
not being able to maintain the personal associations with my fellow workers that
I'd grown to admire over a number of years.

P: It's sad to see an institution that's been around so long and had such an
important part in the life of the city [have] the name to disappear.

L: That's why we said, "Let's not let that happen. Let's get David [Ginzl] involved,
and when I told Ken Lewis, [President of Nations Bank] we're doing this, he
said, "It won't matter." I said, "Well, it may not matter for a lot of people that
you've acquired, but I think it matters to us and we'll do it and we'll do it right, and
hopefully that will create a legacy for the organization."

P: So at that point I guess you became director of the Barnett Historical
Preservation Foundation?

L: Right.

P: So that was the focus of your activities after you retired.

L: Well, not [the] total focus. David was the main person that did all the work there,
but we had a board of directors of former Barnett people, and they gave David
[Ginzl] guidance and advice in his efforts.

P: Let me talk a little bit about your charitable work. Obviously, one area where
you've been extremely important is working with University of Florida Foundation
Board of Directors. I know you were co-chair of the 'It's Performance that Counts'
fundraising campaign, which was extraordinarily successful. How do you go
about raising those huge sums of money?

L: The short answer is, stay out of the way of the foundation staff because they are

FBL 22
Page 36

very, very good, they're very professional, and they've got a lot of information
that they use to identify prospects and develop strategies to do that. John
Higdon and I were co-chair of the campaign and we stayed actively involved
throughout that five year period, but I think John would tell you the same thing,
John Lombardi [president, University of Florida, 1990-1999] initially, and then
Chuck Young [President of University of Florida, 1999-present] after John left,
Paul Robell, the foundation staff, and the deans of the various colleges were the
principal fundraisers. They got out and made the contacts. We were helpful
probably in identifying potential donors, in making introductions, and in giving
advice to the effort, but any successful campaign is the primary responsibility,
and credit for successful campaign needs to go to, the people within the

P: I don't know at what point, but you set up the Lastinger Family Foundation. What
do you use the funds in that foundation primarily for?

L: This is a foundation that we set up where our children and their spouses are
directors of the foundation. We set it up without really having a mission, but we
got together with the family and talked through it. There are essentially two
primary focuses: children's welfare and education, and preservation, whether
that's environmental, historic or whatever. I think our son-in-law said it best, that
the Lastinger Foundation wants to preserve the past while investing in the future.
So as we look for opportunities to fund projects, typically they'll be historical,
environmental preservation efforts, or primarily educational efforts or health
efforts for children.

P: Those are one of things that you gave some funds to the College of Education at
the University of Florida for, was to help at-risk kids improve their communication
skills and well being.

L: It goes beyond that. Obviously, at-risk kids are an important part of the Lastinger
Center, but what we wanted to do more than anything was create a focus on the
practical aspects of elementary education. We see so much theoretical research
coming out of colleges and universities, but not enough emphasis, in our opinion,
on what are the important practical programs that the university can develop to
help teachers be better teachers and students be better students. Whether that's
curriculum or whether that's teacher education and development. We wanted to
limit the focus to the kindergarten through fifth grades so that the foundation for
good education is built early. As we went around to principals and talked to them,
they said, "We're getting students that can't read or can't calculate or can't write,
and this effort needs to start early." So the principle objective of the Lastinger
Center for Learning is for the director of that center to go to various schools
around the state and find out what they need. A lot of times, like right now, we're
mandating from the governor's position or other positions on what teachers need

FBL 22
Page 37

to do. I think, as we did with Barnett, we said, "The people that deal with the
customers know more about what we need to do than our senior management
group, so why don't we go to the teachers and principals and ask them what they
need to be more effective and then try to develop that at the university."

P: How do you feel about Gov. Jeb Bush's accountability plan whereby these kids
take standardized tests to determine what progress they've made?

L: I think accountability is important. I was an athlete in high school and very
competitive in my banking career, and I think anytime you start something there
needs to be a way of keeping score or you won't know whether you're making
progress or not, winning or losing. So I think accountability is important. I think
the teachers and the principals that I've heard agree that accountability is
important, it's just the way that it's done needs to be carefully thought out and
measure what we're trying to measure. Whether or not the current system does
that adequately, I'm not qualified to say, but I think the governor's initiative to
measure the result of education is a good initiative.

P: From an educator's point-of-view, many of us see that as teaching people to
respond to test questions as opposed to learning how to think, to be original, to
be able to present ideas in their own language.

L: Right, and I think that's a valid perspective. But again, when you have results like
we're getting in a lot of our elementary and high school classes, there needs to
be some kind of integration and effective measurement program that combines
what you're saying with a person's ability to read and write and function. We
were, quite honestly, challenged at the bank trying to find people who were
coming out of high schools that could get the job done, which is a sad thing.

P: It really is. You've also given a major gift to the Florida Museum of Natural
History. Any particular area you are interested in?

L: That was one of the first commitments that our family foundation made, that
preservation is important to us, and the Florida Museum combines the
preservation of what happened in Florida with an educational mission of bringing
children in to give them the opportunity to appreciate that. There was really no
particular area other than they were doing some major improvements to the
museum and we just helped fund one small part of that.

P: What do you envision, at this point, that you want to spend your time and energy

L: I read one time that for somebody to be happy in retirement they have to have at
least a dozen interests. I don't know whether that number's right or not, but we're

FBL 22
Page 38

starting to have grandchildren and it's important to me to be able to see them
grow up and develop. So spending time with family is probably the most
important thing. And then friends. We've developed a lot of friends over the
years, and the opportunity to be able to go fishing or play golf or travel or
whatever with friends is important. Delores and I love to travel. We haven't had a
chance to do that except on business for most of my career, and now we're going
to places that we never had an opportunity to go to on business, and that's fun.

I guess from an exercising the mind perspective, I am more interested now in
academic issues than I am commercial issues, primarily history. Maybe that's
Sam Proctor's legacy that he planted that seed. But I also found out several
years ago that my family came to Florida in the 1820s. I'm trying to appreciate
the kind of environment they lived in, and that's led me to a collection of Florida
books. Some are rare and expensive and others are new and not expensive. It's
led me to a Florida map collection. It's part of the interest in Florida history and
my involvement in banking as I've had the opportunity to buy a Florida money
collection. I've continued to add to that and learn more about the history of the
banking business. I'm finding that when I go to various shows, like a map show
or a book show, I run into people who have common interests. I guess that's my
intellectual stimulus.

One of these days, if I can just get down to it, I'd like to write a book that would
be fiction, but based on as much historical fact as I can determine about my
family's evolution in Florida and how they dealt with critical issues like the
Seminole War, the Civil War, the economic environment after the Civil War in
Florida and the World Wars. Because when I go back and look at the census, the
original Lastinger immigrant to Florida couldn't read or write. To think that over
four or five generations we've come to where we've come is just mind boggling to
me, and it would be a nice story to tell to our grandchildren and children and
descendants. That may not ever happen, but that's up there in the realm of

P: When you look back on your twenty-seven years at Barnett Bank, what would
you like to be remembered for?

L: I've never been asked that question, and that's a damn good question. I think I
would like to be remembered for being fair, demanding, credible as a manager,
and being involved in creating the kind of special place that we had during my
tenure there, or if not developing it, perpetuating that special feeling about the

P: Let me ask you one other question about the current corporate ethical problems
at Enron and all of these major corporations. What is happening to the ethical
standards of some people in business? We've seen it in accounting firms, but we

FBL 22
Page 39

have not really seen much of this in banking. Is there a different ethical mentality
in the banking business from these other corporate executives?

L: Well, I don't know other banking institutions as well as I know Barnett, and there
is clearly a difference between the ethical behavior at Barnett as opposed to what
you've seen in some of these other organizations. I think the bankers I've met in
the industry are very, very aware of the importance of the image of the bank.
Anything that would even create the perception of a problem would be very
devastating to the banking organization. So there's more of a sensitivity that
bankers have to the image than maybe some of the corporate executives in
Enron and [others have]. I think it's a culture thing. I mean, you grow up in an
organization and the CEO or the senior management kind of sets the tone for
ethical behavior. If you are encouraged to take risks, as the case with Enron, you
may find that the lines between good behavior and bad behavior become gray.
Pretty soon you're in a situation that you've got to get some advice from an
accountant that you did the right thing, and the accountant is compromised
because you're a big client and they want to continue that relationship. It
snowballs on you once it gets beyond that line. It's unfortunate because I know
the vast majority of people in business that I know behave ethically and expect
[their] people to behave ethically, but in any walk of life you're going to have your
bad actors. I think a lot of it has to do with the compensation schemes that are
now being developed. There is an ego driven thing that I want more toys than the
next guy. I may be guilty of that as well with this house, but I look at this as more
of an investment than anything else.

P: Some of the salaries for executives running companies that are losing money
seem to be out of proportion with any sort of rational understanding of what's
going on in the corporation. Normally, as you talk about accountability, if your
corporation doesn't go well, you don't get $40,000,000 a year.

L: Right. And too, the good fortune that I had, and I think a lot of the senior people
and the not-so-senior people at Barnett had, was that over the years we
accumulated a lot of stock either through options or through purchase, and we
did what we were expected to do for the shareholders and we were fortunate and
benefitted by that.

P: Do you think they should do away with stock options as part of a salary now?

L: I don't, I don't think that at all. It is an incentive to do well and it makes your
interest compatible with the other shareholders' interest. If you're compensated
on just cash compensation you can give lip service to doing what's best for the
shareholders. But if you have the opportunity to benefit or to lose, it really ties
you to the interest of the shareholders. Now whether they account for them as an
expense or not, that's a technical issue and I'm not even qualified to make an

FBL 22
Page 40

opinion on that.

P: Is there anything we have not discussed that you'd like to talk about?

L: You've done a pretty thorough job. I can't think of anything, you came well

P: Well, on that note we'll end the conversation. Thank you very much.

L: Well, thank you.

University of Florida Home Page
© 2004 - 2010 University of Florida George A. Smathers Libraries.
All rights reserved.

Acceptable Use, Copyright, and Disclaimer Statement
Last updated October 10, 2010 - - mvs