Hibernia Shows Lenders In Planned Acquisitions Its High-Tech Methods

Hibernia Mortgage is gearing up for its parent's pending purchase of four banking companies.

Managers from the four institutions are at the mortgage unit's New Orleans headquarters being schooled in Hibernia's high-tech approach to lending.

At the same time, Hibernia mortgage executives are fanning out across Louisiana and into eastern Texas, getting a feel for the areas that would be served by the pending acquisitions.

"This is a tremendous opportunity," said Bob Flurry, a regional chairman at Hibernia Corp. "We especially expect growth in mortgage lending."

By yearend Hibernia plans to close on the purchases of Louisiana-based Argentbank and Northwest Bancshares and Texas-based Executive Bancshares and Unicorp Bancshares. Together, the institutions have about $1 billion of assets and would give Hibernia welcome geographic expansion.

Hibernia already is the biggest banking company headquartered in Louisiana and is boosting its presence in Texas. But the company faces challenges from out-of-state rivals like Banc One Corp. and NationsBank Corp. and is finding that additional heft is increasingly desirable.

Hibernia would use the purchases "to piggyback on the states' strong economies and to meet a lot of pent-up consumer demand" for mortgages, said Katrina Blecher, banking analyst at Gruntal & Co., New York.

Mortgages are ideal products to promote in the high-population, low- unemployment locales that Hibernia is entering, Mr. Flurry said. "We want to build our existing network and bring to new markets all the mortgage products they will hopefully need."

So far the mortgage operation has kept pace with Hibernia Corp.'s own expansion, which includes more than a dozen bank purchases in the past three years. Indeed, Hibernia originated $94 million of mortgages in all of 1994. This year, production for July alone was $91 million, said Paul Peters, senior vice president in charge of mortgage lending at Hibernia.

When entering a new market, Hibernia strives to retain an independent, community bank feel at the institutions it acquires.

That's why, when a deal is made, Mr. Peters doesn't often get rid of loan officers at the target institutions. Instead, he said, he brings them to Hibernia headquarters "for a week of training in mortgage originations and the use of equipment like laptop computers."

The loan officers are then signed on as correspondent lenders, feeding loans to Hibernia before the deal closes. "This way we get to know each other better, and there is no downtime when the merger happens," Mr. Peters said.

Hibernia's mortgage operation puts great emphasis on technology to speed processes that used to take days. Now, with the help of an automated underwriting system provided by Fannie Mae, Hibernia aims to outdo rival lenders in speed and efficiency, Mr. Peters said.

Hibernia has been successful with automated underwriting because it uses the systems as part of an overall approach to improve efficiency, said Roger Conley, technology vice president at Fannie Mae.

"It's not just having the technology," Mr. Conley said. "It's learning how to apply it to shape their mortgage business."

The automated underwriting system that Hibernia uses, for example, at times requires less documentation and fewer fees from prospective borrowers. The savings sit well with customers and "serve as a wonderful customer service tool" for Hibernia to build relationships, Mr. Conley said.

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