ROSWELL, Ga. -- James H. Powell likes to press the flesh and chat with customers at a local deli. the conversation sauntering with the ease of his Georgia drawl from the hot weather to how business is.

He doesn't cut the figure of a turnaround artist -- a man who slashed his staff by a third, excised $5 million in nonperforming assets, and revamped an organization that was run more like a favor bank than a community bank.

"I've never thought of myself as a turnaround guy, and I don't want to see myself that way now," Mr. Powell said.

"I've been asked to do it at other banks, but I don't want to do it again. I want to stay here."

Miracle Worker

Just three years after taking control of Northside Bank and Trust Co. in this affluent suburb north of Atlanta, Mr. Powell has worked miracles on problems he never thought he would confront in banking.

In his first year, 10% of the loan portfolio went bad. The company was bleeding money. The regulators said flatly in September 1991 that despite its enviable 13.9% capital cushion, Northside would not survive on its own.

"It was a scary time," said Northside chairman Trummie L. Patrick, a Roswell insurance agent. "Jim took us through it incredibly.

"I think that he's the best banker I've ever known, and probably the best banker in Georgia."

"There's no question about it," said Georgia's commissioner of banking and finance, E.D. "Jack" Dunn. "They've done a good job. Management is the secret in any bank like this."

Hard Decisions

Mr. Powell wasn't always basking in such praise. He's made some hard decisions about his employees and his customers to keep Northside independent.

Northside was started in 1986 by Tom Perdue, a well-known Georgia politico who had been two governors' chief of staff.

Mr. Perdue's plan was to form four banks around Atlanta and merge them under a holding company, Southern Bank Group Inc.

Mr. Perdue raised a whopping $32 million, $12 million more than required by state law to start four banks. The biggest capitalization was for the flagship Northside Bank, which got $10 million.

"It was a great plan," Mr. Powell said ruefully. "The execution was poor."

New Blood

Northside exploded to $142.4 million in assets by 1990 and was making loans all over the state, 33% of them real estate construction and development loans.

The bank posted its first, able-it questionable, profit in 1988: $400,000.

But by the first quarter of 1990, with recession looming, problem loans mushrooming, and the Federal Deposit Insurance Corp. making noise about Northside's management depth, Southern Bank Group's board asserted itself by bringing in some new blood.

Mr. Powell had spend his entire 21-year career to that point at Trust Company Bank of Georgia, most recently as president of its Cobb County bank.

But in 1989 Trust Company consolidated most of its county banks, and Mr. Powell began seeking an independent began that needed a chief executive. He picked Northside "because it had a good plan," he said.

But "within six weeks, I realized the problems were significant."

The atmosphere at Northside was palatial -- wet bars in the executive offices, a boardroom that was one of the fanciest in the county. ("I don't even want to known how much that cost," Mr. Powell said, pointing to the huge, circular mahogany table in the boardroom.)

But the bank "just wasn't what it appeared to be," Mr. Powell said. "They had all these big names running the show. It was like a facade -- a pretty front with no substance."

By the end of 1991,, nonperforming assets had ballooned to $8.2 million, or 7% of assets, from just under $2 million in 1989.

In two years, 1990 and 1991, Northside charged off $3 million in loans, took $3.34 million in loan-loss provisions, and lost $1.84 million.

At the worst, after a September 1991 federal examination, nearly one of four dollars in loans was classified and the band had $4 million in other real estate owned.

Mr. Powell and Laurice Tatum, a Florida banker brought in just before him to take over credit administration, say the staff was at a loss when problems hit in 1990.

Though the recession's impact on real estate values hurt the bank, most of its problems were caused by poor underwriting, Mr. Tatum said.

"There were reams of loan files with no credit memoranda in them," he said. "I spent the first few months I was here going through every loan file, only to realize there was nothing in them."

Mr. Powell said there were loan officers with "zero experience." Employment at the company appeared to be based on patronage, with the coveted jobs "going to cousins, or friends, or whatever." Some staff members were making more money than their superiors.

Founder Departs

By the end of 1991 Mr. Perdue had resigned, returning to politics. One board member said the holding company, it's multibank aspirations unfulfilled, "simply couldn't afford his salary."

Mr. Perdue, who made $150,000 a year as chief executive of the holding company, declined to be interviewed for this article.

Once Mr. Powell was firmly in control, he made some significant changes. One was firing the 14-person staff of the holding company, which had abandoned its effort to become a multibank organization.

The bank hired three of the 14, but total employment at the company went from 92 at the end of 1990 to 63 a year later.

"That was the worst part," Mr. Powell said. "Laying people off or reducing their salaries."

Nonperformers Slashed

Meanwhile Mr. Tatum had set about cleaning up the loan portfolio.

The immaculately groomed executive takes special pleasure in making things right.

He acknowledges a "sadistic interest in paperwork" and came to an interview with 10 pages of notes detailing what he wanted to say.

"I go after past-dues with vengeance," Mr. Tatum said.

"I think he'd collect on anybody, no matter who," said Mr. Powell.

Northside's nonperforming assets have been reduced by two-thirds. The bank was released from an FDIC memorandum of understanding in February, 17 months after it was issued.

In the Black

In late 1992, the bank became profitable again. It made $318,000 last year, and so far this year has made $259,000 with no loan-loss provisions.

Only three out of 18,000 credits were past due at midyear, and the high-rate jumbo deposits used to grow the bank in the early years have been bled off.

Northside now is considering new branch sites, is offering mutual funds and is on the verge of launching its own credit card.

With the cleaning job done, Mr. Powell can look bank on why he stuck it out.

"I know a lot of bankers in Georgia, and I think I have a pretty good reputation," he said. "I just didn't want anyone to think that I couldn't do it."

|There Are Very Few People Still Mad at Us'

ROSWELL, Ga. -- When James Powell and Laurice Tatum, respectively CEO and chief credit officer of Northside Bank and Trust Co., got here in 1990, they might as well have worn buttons on their lapels that screamed, "Pay Up!"

Mr. Powell "likes to say that I'd foreclose on my mother if she was late by 30 days," Mr. Tatum, the point man for much of Northside's cleanup, said with a laugh.

Tight-Knit Community

But the aggressive workouts created relatively little ill will in this tight-knit community, Mr. Powell said.

When he lunches at the local delicatessen, he's heartily welcomed by patrons who still do business with the bank. And his children and Mr. Tatum's children hang out with those of borrowers.

Mr. Powell says the good will reflects the success of the bank's founders in establishing it as a community fixture.

"That's the one thing they did right," Mr. Powell said. "They marketed this institution to make it a key part of this community, and they succeeded."

Mr. Powell said that despite its problems, Northside remained the premier community bank in suburbs north of Atlanta.

Throughout 1990 and 1991, its core deposits remained steady as management bled off high-cost deposits and went after nonaccruals with a vengeance.

A key reason was Northside's board. Only two directors resigned, one being Tom Perdue, the Georgia politician who was the driving force behind the bank's formation.

"This has been a very cohesive board," said bank chairman Trummie L. Patrick, a local insurance agent. "We all hanged tough."

"There are very few people who are really still made at us," Mr. Powell said. "Even though this is a very personal business, you can't get emotional."

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