It is not often that top executives give back their own compensation when a banking company gets into trouble. But that's what senior management did as part of a program to resurrect Hibernia Corp.

The New Orleans company announced this week that it had reversed $12.6 million in long-term-performance awards given to its top executives over the last seven quarters and had canceled $1.7 million in expected 1999 bonuses.

The reductions, though substantial, signaled that management is willing to do its share, analysts said.

But more important, they said, was that the company had moved to improve its balance sheet, setting the stage for healthy growth.

Though its third-quarter earnings were far from spectacular, up only 3% from the year-earlier level, its nonperforming assets dropped 24% from midyear, and its loan-loss reserves rose to 252% of nonperforming loans, from 174%.

"It appears that Hibernia has put its house back in order for now," said David Trone, an analyst with Credit Suisse First Boston, New York. But Mr. Trone added a caveat: "Assuming there will be no new credit problems."

Hibernia's ills stem from large loans that have soured, including a $33 million loan to United Companies Financial Corp., which lends to subprime borrowers. Not only has Hibernia made progress in its credit quality, but the bank is revamping its overall strategy to ensure that revenues and profits show strong increases -- as in the past but with a lower risk profile.

"We have had the opportunity to address a number of large situations," Stephen A. Hansel, president and chief executive officer of Hibernia, said in an interview Wednesday. "The most significant problems we have had are down to levels that are much more manageable. Going forward, we expect lower chargeoffs and lower provisions."

The biggest move taken in the third quarter was writing off the $33 million loan to United Companies, the main reason the company reported non-performing assets fell 24%, to $76 million for the quarter.

Hibernia also trimmed its balance sheet, selling off at a discount big delinquent loans to Forcenergy Inc., an oil company, and Hvide Marine Inc., a marine transportation company. That reduced exposure by about $40 million, said Robert Patten, a bank analyst for Lehman Brothers Inc. in New York.

"This puts them back to clearly well managed earnings growth," he said. "They are focused on getting their credibility back and increasing shareholder value."

In addition to the writeoffs, the company added $28.5 million to its loan-loss reserves. The has revamped its risk-assessment models, the bank said. For one, Hibernia will be more severe in assessing the risks of businesses that depend on capital markets, said Mr. Trone of Credit Suisse. United Companies depended on securitizing loans to the markets and was hurt when that market dried up.

Mr. Trone said Hibernia will "be more careful not to let customer loyalty blind the credit process" and that it will look more critically at loans it makes to longtime clients such as United Companies. Hibernia also plans to avoid big commercial loans and place more emphasis on its other loan divisions. The challenge will be whether Hibernia can continue to have robust growth in those areas.

"Where they hope to make it up is on small-business and consumer loans, which have been bright spots for the company," Mr. Trone said. "The question is, Can they do any better in those sectors than they already are?"

Plenty, says Mr. Hansel. For example, in Shreveport, La., Hibernia says it expects to pick up business from Amsouth Bancorp's recent acquisition of First American Corp. That purchase is one of several that have taken their toll on some of Amsouth's customers, some of whom have already been through several bank mergers, Mr. Hansel said.

"That kind of turmoil, and the turmoil of the Bank Ones and First Unions, offers opportunities," Mr. Hansel said.

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