After working out problems in its loan portfolio, an upstate New York bank holding company is still figuring out what to do in its executive suite.

Evergreen Bancorp, Glens Falls, dismissed its chief banking officer, William M. Hazlett, days before the $839 million-asset company was released from a year-old formal agreement with federal regulators. Mr. Hazlett was hired in April 1993 to help the bank resolve a problem with nonperforming loans.

His position was eliminated after George W. Dougan, the company's new chairman, president, and chief executive, determined that it was redundant. The position was created just nine months ago.

Mr. Dougan said the action was taken to "demonstrate our seriousness about cost control, and to reduce the number of layers between the CEO and the customer."

"The function that existed made sense prior to appointing a full-time CEO," said Mr. Dougan, who was hired in March. "If they had last year put a CEO in place, he [Mr. Hazlett] would never have been elevated to the position he was in."

In 1993, Mr. Hazlett received a salary of $104,769.

"There were too many chiefs and not enough Indians," agreed Don J. Kauth, an analyst with First Albany Corp. "It didn't seem that they needed two people of that level running such a small bank."

Mr. Hazlett said he was surprised by the bank's action, noting that he wasn't hired with the understanding that the position would be temporary. But he added that the bank's organizational structure was much different when he was hired in early 1993.

"The positions that he [Mr. Dougan] held and that I held to a large extent overlap and there's a lot of truth to that," said Mr. Hazlett, who characterized his relationship with the bank as amicable. "He felt that it was in the bank's best interest to cut some costs and downsize and that's what he and the board chose to do."

Mr. Hazlett was also president and CEO of Evergreen's main subsidiary, First National Bank of Glens Falls. Mr. Dougan will assume those posts.

The announcement of the lifting of the formal agreement came only 17 months after it was signed.

That marks a turnaround for Evergreen, which got into trouble with nonperforming loans in the early 1990s, reaching a high of 6.3% of total assets in 1992, with almost $57 million in bad loans.

The bank was forced to take a huge loss in 1993 of $3.3 million, almost a 200% loss from the previous year, when it earned $3.6 million.

"The regulators were not pleased with the management that was in place [before Mr. Hazlett]," Mr. Dougan said.

"They were not pleased with the board oversight. They were not pleased with the nonperforming loans. They were not pleased with the compliance situation There were a lot of things they were not pleased with."

After being as high as 0.82% in 1991, Evergreen's return on average assets plummeted to 0.38% in 1993.

'State and federal regulators imposed the agreement on First National in March 1993, requiring the adoption of new loan policies.

Under the new management. Evergreen has worked out much of its problems, going back into the black this year, earning $3.4 million in the first half of 1994, compared to a loss of $6.6 million in the first half of 1993. After the first half of this year, the ROA had bounced back to 0.82%.

The company has also instituted a new loan policy, with two new levels of oversight to review loans. As of June 30, nonperforming assets were down to $37 million, 4.5% of all assets.

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