Problems at Bank South Play to Flinn's Strengths

Patrick L. Flinn is known for his ability to handle difficult tasks. That skill should prove especially useful in his new post as president and chief executive of Atlanta-based Bank South Corp.

Mr. Flinn, who was lured away from C&S/Sovran Corp., took up his new duties on Aug. 1. His appointment came just two weeks after Bank South reported a $16.3-million second-quarter loss and suspended its dividend. The company lost $9.3 million last year, largely because of bad commercial real estate loans in the Atlanta market. Bank South has almost $5 billion in assets.

A Focus on Asset Quality

Mr. Flinn, 49, hasn't yet developed a detailed game plan for turning Bank South around, although restoring asset quality, he said, "has to be a primary objective." Bank South's ratio of nonperforming assets to total loans and foreclosed real estate stands at 7.30%, one of the highest in the region.

Fortunately, Atlanta's real estate recession "is certainly not as serious as other parts of the country," Mr. Flinn said.

Another positive: After studying Bank South's top problem credits, Mr. Flinn has concluded "the underwriting that took place in this company is not what you would consider to be crazy, dumb or stupid." The problems involve loan structuring and portfolio diversification, he said.

Mr. Flinn knows something about problem real estate. A 25-year employee of Atlanta's Citizens and Southern Corp., he helped that bank work its way out of the real estate recession of the mid-1970s. C&S/Sovran Corp., also based in Atlanta, had sent him to Washington earlier in the year to straighten out its well-publicized real estate mess in that region.

"The task of solving problem portfolios is Pat's strong point," said Peter H. Isop, a former C&S/Sovran executive vice president who now runs a community bank in Atlanta. "His primary expertise is doing difficult things."

Bank South is Mr. Flinn's first attempt at managing a stand-alone bank, and he has little acquaintance with the technology or financial side of the business. But otherwise, he presents a well-rounded resume, having run a number of major departments at Citizens, including international, corporate banking, and specialized lending, which includes factoring and credit cards.

A No-Nonsense Manager

"Someone in a senior position from Citizens, which is a very good bank, really enhances Bank South's credibility," said Kathryn H. Bissette, banking analyst with the Atlanta brokerage firm Interstate/Johnson Lane.

Invariably described as a "hands-on" or "no-nonsense" manager, Mr. Flinn clearly believes in a step-by-step approach. "What I've tried to communicate initially is that you do not have to hit home runs; you've got to continue to hit singles," he said. "You can score just as many runs and you won't strike out as many times."

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