W. Kirk Domingos 3d, Hibernia Corp.'s head technologist, needs no reminder of the precarious position his bank occupies.
Mindful of the competition from nonbanks, he keeps a clipping from a Montgomery Securities analyst report that says: "Banking is essential to a modern economy, but banks are not."
Further, he is aware that New Orleans-based Hibernia is considered by some to be the plum acquisition candidate in Louisiana.
Instead of being daunted by this situation, Mr. Domingos and his co- workers at Hibernia have responded by making technology decisions with a sense of urgency.
In the last few years, the bank has changed its main data processing relationship and dramatically increased technology spending. The effects have been positive, and Mr. Domingos says that, regardless of its fate, the bank must continue to adapt to changes in the banking industry.
"We want to make sure that whatever happens, we are in the position of offering the services that our customers need," said the 54-year-old Mr. Domingos, who is an executive vice president.
Hibernia's story so far in the '90s is one of a turnaround. The $7 billion-asset bank had losses totaling $165 million and $64 million in 1991 and 1992 respectively, stemming mainly from bad loans.
Mr. Domingos, a banker for nearly three decades, had been with Hibernia almost seven years when the worst losses occurred. But he was one of only a few executives kept on when Hibernia's chief executive Stephen A. Hansel put together a management team charged with making the bank profitable again.
The reason he survived is clear to those who follow the bank: "He had a damn good track record, and kept his nose clean," said M. Arthur Gillis, an independent consultant based in New Orleans.
As manager of support services with the 125-year-old bank, Mr. Domingos oversees about 800 people who manage data processing, deposit, loan, and administrative services.
His challenge is to help the bank operate as profitably as possible. However, the task was a particularly difficult one in Louisiana, where the economy has only recently showed signs of recovering from some very lean years.
"I can tell you, it was enough to scare the hell out of all of us," Mr. Domingos said of the economic and competitive pressures.
In 1992 Hibernia brought in Mr. Hansel, a former chief financial officer of Barnett Banks Inc., to fix the "mess" that was Hibernia, said Mr. Gillis, the consultant.
One of the first items on Mr. Hansel's agenda was the bank's use of technology. Mr. Hansel and Mr. Domingos both believed that Hibernia needed to invest more aggressively in technologies that would help keep customers from fleeing to other banks or to nonbank providers of financial services.
The upshot is that technology spending has grown dramatically at the bank. By the end of this year, the bank expects to spend $15.8 million on technology, nearly triple what it spent in 1994.
Much of the money went to supply the bank's 150 branches with PCs linked in a wide area network. It also spent over $4 million on new automated teller machines.
"The first thing we tried to do is understand what kind of customers we have and what kind of services they want," Mr. Domingos said.
The bank also invested in a new 24-hour telephone banking service, and is starting a PC-based home banking project - something "obviously, we are very excited about," Mr. Domingos said.
Hibernia has also moved to reduce technology costs.
Under the new management team, the bank scrapped a long-term data processing deal with Integrated Systems Solutions Corp. and a software deal with Hogan Systems Inc. in favor of more beneficial contracts with Alltel Financial Services Inc.
After converting to the Alltel software and letting the Little Rock- based company take over some computer operations, Hibernia has realized annual cost savings of $4.5 million, according to Mr. Domingos.
In addition, the bank is considering installing more desktop automation systems to wring out more cost efficiencies. It also plans a major file folder imaging project in 1996.
The new services, coupled with the cost savings, have played a large role in the bank's recovery. In 1993, the bank posted net income of about $64 million. That shot up to nearly $85 million last year.
The renewed health has allowed Hibernia to buy Louisiana-based community banks and build up its assets.
Bank executives said the turnaround means that Hibernia is big enough and healthy enough to stand on its own. However, Mr. Hansel and his cohorts realize that the bank is still considered prime takeover material.
The speculation has been fueled by Banc One Corp.'s move to exercise a purchase option it reached in 1991 with Premier Bancorp, of Baton Rouge.
"We don't think (Banc One) went into Louisiana without an intention of eventually being in New Orleans," said Michael Mayo, a regional bank analyst with Lehman Brothers in New York.
Louisiana, with its recent economic recovery, is "a well-kept secret." Mr. Mayo said. "It's a good retail market for someone who wants to expand."
Anthony A. Lombardi, an analyst with Dean Witter Reynolds Inc., agreed that Banc One's move "has obviously turned up the heat in the last one or two years. When push comes to shove, I'd say Hibernia will go first."
Mr. Hansel is frank about the situation. Though Hibernia is not planting "for sale" signs on its front lawn, "we are not building fences around the company either," he said.
"What we are trying to do is build an increasingly valuable company that is capable of generating annuity-like returns. We are in a position to go it alone if that's the best thing for our shareholders," he said.
In the meantime, Mr. Domingos, who began his banking career with Citizens and Southern National Bank in Atlanta, will continue to try to improve the services Hibernia offers.
And he says others in the industry need to do the same.
"As an industry, we need to get ourselves into a position where we can offer a whole market basket of financial services," Mr. Domingos said.
"Gone are the days that we could say 'take it or leave it.'"