When it came time to determine whether Fifth Third Bancorp would plunk down $5 billion to buy Old Kent Financial Corp., George Schaefer Jr. was in typical form.

George Schaefer and wife Betty in their Hyde park home. (Gary Landers photo) | ZOOM |

        Surrounded in a teakwood-covered boardroom by 10 of his top executives — collectively worth $200 million to $400 million in stock — Mr. Schaefer demanded that they choose whether to do the deal or find another one to help sustain Cincinnati's largest bank's banner profits.

        After hearing the pros and cons of what could become its boldest and largest deal ever, the group opted to acquire Michigan-based Old Kent.

        “Everybody was asking, "Hey — what will this do to the stock?'” recalls Mr. Schaefer, Fifth Third's president and chief executive. “I told them to speak up now because I didn't want to hear about it later.”

        That decisiveness, discipline and tight-fisted style are among qualities that make Mr. Schaefer the Tristate's most powerful banker and one of the nation's most highly regarded.

        Since taking over in 1990, Mr. Schaefer has used acquisitions and a model of boosting revenues faster than expenses to help Fifth Third routinely post the double-digit earnings growth that bankers envy.

        The latest deal was Fifth Third's 57th during Mr. Schaefer's reign. Old Kent expected to be completely integrated into Fifth Third next month. It will make Fifth Third the nation's 15th-largest banking company with assets of $70 billion and 960 branches in seven states.

        Moreover, the purchase of Old Kent — and its $22 billion in assets — poses the biggest gamble and challenge for Mr. Schaefer, who proudly says the deal put Cincinnati's largest bank in the big leagues.

At work

        But those close to the 56-year-old Mr. Schaefer are confident that the West Point graduate can pull it off. They say Mr. Schaefer won't depart from a highly focused, hard-charging and kick-butt style that he's used at Fifth Third for decades.

SCHAEFER FILE

• Title: President and chief executive at Fifth Third Bancorp.   • Age: 56.   • Date of birth: May 17, 1945.   • Family: Wife, Betty, and three children: George III, Shaune and Tom. Two granddaughters, one grandson.   • Residence: Hyde Park.   • Education: Elder High School, 1963; U.S. Military Academy, 1967; Master of Business Administration, Xavier University, 1974.   • Career path: Joined bank as management trainee in 1971. Worked in commercial credit in 1971-72, bank operations in 1973-75, data center in 1975-77 and commercial lender in 1978-89. Named president in 1989 and chief executive next year.   • Current challenges faced at Fifth Third: “Finding over 1,000 talented and motivated new employees — from entry-level to management to help Fifth Third continue to grow.”   • Biggest deal: Spearheaded Fifth Third's $5 billion acquisition of Old Kent Financial Corp., making Fifth Third the 15th largest U.S. bank, allowing expansion into cities like Chicago and Detroit. Major task now is to successfully blend Old Kent culture into Fifth Third's.   • Hobbies: “I enjoy banking ... and two G's: grandchildren and golf.”   • Last book read: First, Break All The Rules.   • Most admired leader:Norman Schwarzkopf, who led U.S. troops in Persian Gulf War.   • Favorite restaurant: China Gourmet.   • Favorite TV show: The O'Reilly Factor on Fox.   • Biggest success: 34 years of marriage to Betty.

        They see him as a down-to-earth, stoic person from Cincinnati's west side with an over whelming passion for his job, enjoying it as others might delight in playing golf or poker. Huge personal financial gain also has not changed Mr. Schaefer, who could stroll away today with stock options alone worth $130 million.

        Betty Schaefer, 55, who fell for “those blue eyes” and married him in 1967, said her husband remains an energetic, hard-charging boss who's a workaholic and the bank's biggest cheerleader. Even today, he appears in the bank's advertising, including a quarter-page newspaper spread selling the bank's investment products.

        Mrs. Schaefer said it's common for her husband to make her tag along to scout Fifth Third branches on the spur of the moment. He even took her to a branch in rural Indiana as part of a Mother's Day drive.

        “George is about the same as he was 10 to 20 years ago, although he seems more comfortable and secure in his position now than before,” she says. “He just really enjoys what he does.”

        And though he is a banker, Ms. Schaefer says her husband is very cautious when it comes to spending his own money, but he's loosened up over the years. That's something his employees attest to.

        In addition to implementing one of the industry's most aggressive sales cultures to boost revenues at Fifth Third, Mr. Schaefer holds managers accountable for every nickel or dime spent.

        That penny-pinching style suits Mr. Schaefer, whether it's in his basic furniture and blue carpeted office at Fifth Third Center or traveling to meet with investors or top Wall Street banking analysts.

        Neal Arnold, Fifth Third's chief financial officer, said his boss is adamant about cutting costs, that he's known for asking managers 40 different ways to trim expenses before closing a deal or submitting a budget.

        He recalls once attending a West Coast investors' conference with Mr. Schaefer. After getting off the plane and taking an airport shuttle bus instead of a limousine to the meeting in downtown Los Angeles, Mr. Schaefer had the driver go 85 miles an hour to arrive in time, saving the bank $100.

        “I was like, "This will save us cash, but I don't want to break my neck,'” Mr. Arnold said, laughing. “That's just how George is, he'll save money any way and wherever he can.”

His influences

        Much of Mr. Schaefer's get-down-to business approach comes from his upbringing in Delhi Township. He played tight end at Elder High School in Price Hill. Even then, he was seen as a hard worker, intelligent student and class leader.

WHAT OTHERS SAY

• George Schaefer III, 32, Mr. Schaefer's oldest son, on his father: “He has a great ability to separate himself from the bank. He's always told us if you're going to do something, no matter what it is, do it with your heart and do it with passion.”   • Hamilton County Juvenile Court Judge Sylvia Hendon, who has known the Schaefers for years and has a condominium in Florida near the couple, on Mr. Schaefer being down-to-earth: “He's great as a neighbor and a friend. He's is the type that's as comfortable on Wall Street (New York) as he is on Glenway Avenue (Price Hill).”   • Mitchel Livingstone, vice president of student affairs and human resources at the University of Cincinnati and board member at Fifth Third, on Mr. Schaefer's communication skills: “One of the things I like most about George is that he always remembers your name and knows something about you. He's also honest and has the courage to tell you what he thinks, whether it's good, bad or ugly. There are no pretenses with George that I can see.”

        Tom Otten, now Elder High School's principal, who attended the school with Mr. Schaefer's brother, Bob, said the Fifth Third CEO appreciates his roots.

        George Schaefer issued a challenge in 1999 to the school's alumni to raise money, and then said he would match that amount. The result: He personally granted $500,000, helping the school raise a total of $1 million for the drive.

        After graduating from Elder, Mr. Schaefer attended West Point, where he learned much of the discipline and acumen that today helps him employ a military style at Fifth Third.

        After West Point, Mr. Schaefer entered the Army and did a two-year stint in Germany before going to Vietnam in 1969.

        He was a company commander in charge of 280 men helping build a key supply road for U.S. troops about 50 miles north of Saigon.

Working under pressure

        “My job was driving in a Jeep all day making sure guys were getting things done, not out smoking dope, getting drunk and/or chasing women,” he says with a chuckle, yet a firm smile. “It's not artsy and much different than what I do here at the branches.”

FIFTH THIRD FILE

• Employees: 21,000.   • Assets: $70 billion.   • Branches: 960 in seven states: Ohio, Kentucky, Indiana, Michigan, Illinois, Florida and West Virginia. After its acquisition of Old Kent, Fifth Third is now a major presence in such cities as Chicago and Detroit.   • Lines of business: Retail banking, commercial lending, trust and investments, and data-processing services.   • Acquisitions: Since Mr. Schaefer was named president and chief operating officer in 1989 and president and chief executive in 1990, Fifth Third has made 57 acquisitions. Among the most significant:   • Old Kent, which added $30 billion in assets, 300 locations in Michigan and Illlinois and the chance to serve 16 million new customers, mainly in the Chicago area. Deal completed: April 2001.   • CNB Bancshares, which added $8 billion in assets, 145 branches and made Fifth Third Indiana's third-largest bank. Deal completed: October 1999.   • State Savings, which added $2.8 billion in assets and 38 branches to Fifth Third's operation in the Columbus, Ohio, area. Deal competed: June 1998.   • Citizens Federal, which added $3.3 billion in assets, 41 locations and made Fifth Third Dayton's largest bank and mortgage lender. Deal completed: June 1998.

        His actions in the Army helped win a Bronze Star for valor. Fifth Third board members and insiders and others close to Mr. Schaefer said his military duty helped him learn how to operate under pressure, something he uses now to oversee 21,000 employees.

        Mr. Schaefer, an admirer of Civil War Gen. Ulysses S. Grant, whom he describes as a general who could execute a plan efficiently, does not sugar-coat things. Peers say Mr. Schaefer sends high-producer employees congratulatory notes and encourages low producers to beef up volume or consider new work.

        Yet insiders also say Mr. Schaefer balances that tough, demanding hand with a compassionate one. He rarely loses his temper and encourages others to grow personally and professionally.

        “He's a very focused and disciplined person who can transfer those qualities to his employees,” said David Wagner, former president and CEO at Old Kent. “It's like a coach knowing all the plays, but getting players to execute at their positions.” Mr. Wagner now runs Fifth Third's Michigan operation.

        Mr. Schaefer was one of those players in 1971 when he joined Fifth Third after leaving the Army. He started as a management trainee making $8,500 a year. He was a commercial lender from 1979 to 1989 before being named president that year and CEO in 1990.

        One of his greatest assets was his ability to sell, along with his intense competitiveness, says Elaine Stone, Mr. Schaefer's executive secretary, who has worked with him since 1979. She said her boss was extremely organized, and able to take on more tasks.

        She recalls him being funny and down to earth even at 6 a.m. when he used to pick her up and take her to work in a brown Pinto with a hole near the accelerator. “He'd rib me at 6 a.m., and always was talking about taking on more customers.”

        But Mr. Schaefer's ambition, attention to detail and his push to boost revenues are traits that today he demands from employees.

        “He's not hard to work for because he's very straightforward,” said Robert J. King Jr., president of Fifth Third's affiliate in Cleveland. “George might be throwing fastballs, and some might be coming at your head, but you know they're fastballs.”

Slowing down

        But Mr. Schaefer, who last month celebrated his 30th anniversary at Fifth Third, has been slowing down the past couple years, though those close to him say he's still as feisty as ever.

        “He does take more time out for the grandchildren,” Betty Schaefer says. “He's still a hard-charging boss, but it's not uncommon for "papa' to relax and read them things like Barney,” a children's television and book series.

        Mr. Schaefer says he enjoys spending more time with his family, three grandchildren and playing golf. Close friends say that prompted him in 1997 to buy a new 4,000-square-foot condominium in Naples, almost three times larger than the previous one.

        He also said he feels fine physically despite concerns in recent years about his health. He had heart bypass operations in 1982 and 1997, the last one forcing him to take a six-week break.

        Mr. Schaefer says he's still excited about his career and has no plans for stepping down soon.

        “I'm a mere lad at 56, and I'm having way too much fun,” Mr. Schaefer says, refuting such talk. “I'm looking forward to even more challenges.”

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