NEW YORK — "Bill gave the bank to Tom," in the words of one insider when Chase Manhattan Bank recently announced a major re-organization of its businesses.
Bill is Willard C. Butcher, chairman, and Tom is Thomas G. Labrecque, president, who now heads the the nation's third-largest bank.
Butcher, 56, will concentrate on policy, planning and controls. The early succession is not unprecedented at Chase. Butcher assumed control from former chairman David Rockefeller years before Rockefeller actually retired.
Chase reported a 9% increase in fourth-quarter earnings after two years of disappointing results. Labrecque intends to maintain the momentum.
"You better believe it," he said when asked during a recent interview if Chase had taken steps to assure that no more surprises awaited shareholders.
"I've spent a good part of the past two years installing controls and streamlining our operation to eliminate that kind of surprise."
Labrecque was referring to Chase's role as agent in the default of a small government-securities firm that caused a huge loss for the bank and to its participation in energy loans with failed Penn Square Bank of Oklahoma.
The 9% improvement in fourth-quarter earnings, analysts said, was even better than it appeared because Chase increased its loan-loss reserves by $15 million, despite a $3-million decrease in loan charge-offs and upped its primary capital.
The report came a month after the bank announced a major re-structuring of its businesses that gave a clear signal of its priorities.
The re-organization split Chase's businesses into three major areas that put national banking on the same level as consumer and the global banking that has always been a major thrust at Chase.
"My principal focus is performance, not necessarily spectacular quarter-to-quarter results but steady earnings growth over time," Labrecque said. "We have identified the strategies that were most important to us and we intend to fly.
"We know we can't be all things to all people. We do certain things well, and we want to concentrate on those areas where we believe we excel."
Tall, slender and reserved, Labrecque, although always courteous and a tireless speech-giver for national banking issues, is not naturally gregarious or outgoing. To some inside and outside the bank he seemed aloof while he worked as chief operating officer in Butcher's shadow.
He now appears much more relaxed and speaks with the assurance that authority can bring. "I have been chief operating officer for almost five years, with all the responsibility that goes with that," was all he would say when asked about this impression.
This period was a traumatic time for Chase. It included the Drysdale Government securities episode and the losses from Penn Square. Chase also has shared with other money center banks the negative impact of the Latin American debt crisis.
"We are an institution that has come through that period stronger," Labrecque said. "We have looked very hard at ourselves and the people in this organization probably are more battle hardened today than any in the banking industry."
Labrecque seemed at home in his huge corner office on the 17th floor of Chase Manhattan Plaza reached, in deference to new security precautions taken in most major corporations located in Manhattan, through two glass doors opened from the inside. He prefers to conduct interviews in a living room-like setting in one corner.
Born in Long Branch, N.J., Labrecque said he was interested in finance in undergraduate school at Villanova, but "didn't really focus on banking until I got to know some people in the business at NYU."
He joined Chase in 1964 after receiving his MBA from New York University and has spent his entire career with the corporation--"having the unusual experience of having been involved in almost every area of the bank from investment portfolio, retail, commercial and international."
These days Labrecque is a regular at various New York philanthropic organizations as chairman of United Way and of the New York blood program's Pacemaker program.
He lives in New Jersey with his wife and four children and prefers to keep his private life separate from his business activities.
"I devote a lot of time to the bank and to outside interests but I don't consider myself a workaholic," he said. "My family is too important to me."
Chase's three "streamlined" operations each report to a top executive. The elevation of these three executives replace several retirements and recent defections, but analysts were most impressed with the fact that Chase placed national banking on a level with its important international and consumer businesses.
"We believe in national banking, we're going to have national banking, and we want to participate in it," Labrecque said. "I don't mean with other banks or non-banks, I mean with American Express, Sears Roebuck and Merrill Lynch."