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FIVE YEARS AGO. Hibernia Corp. was almost as likely to have a commercial real estate loan in Arizona as it was to lend to a businessman in the shadow of the bank's distinctive tower in downtown New Orleans.
Times have changed.
"They've got more confidence in the local market," says John Georges. president of Imperial Trading Co., a food and beverage distributor with nearly 200 million in annual sales. "In years past, they were booking loans all over country. It was ridiculous." Georges is one of Hibernia's biggest corporate customers.
Hibernia. celebrating its 125th anniversary this year, has a long corporate memory. The firm's annual report louts such milestones as the construction of the bank's downtown office tower in 1921 and the opening of its first drive-up bank facility 40 years ago.
But the more crucial time line is much shorter than all that.
Consider 1990 to the present. That's when modern-day Hibernia was born, rising out of crippling commercial real estate loan losses to regain a spot among the premier banks in the state.
In 1990, Hibernia recorded its first red ink in 17 years, running up a $17.7 million annual loss. The next year those losses ballooned to $160.8 million, and the bank came within an eyelash of failing or being sold.
Hibernia's stock tumbled from $25 a share in late 1989 to around $2 per share in late 1991. Today, the stock has recovered to about $8.
Top management, including former chairman Martin Miler, resigned in mid-1991. Miler and several other former executives were later fined by federal regulators for understating the extent of bad loans.
"We got misdirected as a company, and a lot of people had something to do with that," say C. Geron Hargon, who heads Hibernia's south central region today, which includes Baton Rouge and Lafayette. After Miler's ouster, he served as chief operating officer until a new chairman and chief executive officer was hired.
"The good news is that we turned on a dime and changed things," Hargon adds.
Hibernia's turnaround is the stuff of local banking legend.
The low point came when Hibernia nearly defaulted on $99 million in debt owed to Chase Manhattan Bank and several other institutions in 1991. The money had been...