William L. Marks admires confederate Gen. Thomas "Stonewall" Jackson, whose intense gaze is depicted in a painting that adorns the banker's office.

The chairman and chief executive of Whitney Holding Corp. called the Civil War hero "a very focused person - an example of a fellow who took very little ability and made it into something that was pretty major."

Since taking control of Whitney Holding in 1990, Mr. Marks has been employing his own style of Jackson-like focus to modernize a bank that had long been viewed as a laggard in its region.

In the 1980s, Whitney, which current has $3.5 billion in assets, trailed its competitors in technological investment. Indeed, the bank had no automated teller machines until 1991.

On top of that, the bank suffered from credit problems related to energy loans that went sour when the oil industry in Louisiana tanked in the 1980s.

But Mr. Marks cleaned up the credit problems, began spending on technology, and is now pursuing a game plan to build up Whitney's capabilities in a few lines of business: retail, middle market commercial, trust, and international banking.

Mr. Marks said he intends to apply this strategy in a narrow zone stretching along the Gulf of Mexico from the Texas-Louisiana border to the Florida Panhandle.

"The concept of a Gulf Coast strategy is a sound one," said Keefe, Bruyette & Woods Inc. analyst R. Harold Schroeder, noting the region's improving economy and Whitney's historical role as the premier bank in New Orleans.

During the mid-1950s, Whitney could actually claim to be the largest bank in the South, as ranked by deposits.

Mr. Marks, unfortunately, inherited an infrastructure weakened by decades of neglect. As a result, Whitney has had to spend about $35 million over the last five years installing technology and management information systems - often where none existed before.

Whitney continues to apply a third of its annual $49 million capital projects budget for technology investments, including $9 million for a new operations center in suburban New Orleans. Such initiatives, combined with recent acquisitions, will keep noninterest expenses at an estimated 5% to 6% above normal operating expenses for the next few quarters at least.

With such a heavy noninterest expense burden, Whitney finds itself saddled with an efficiency ratio of 68% - uncomfortably high compared to those of New Orleans neighbors First Commerce Corp. (61%) and Hibernia Corp. (64%).

Chief financial officer Edward B. Grimball said he intends to get the efficiency ratio down to about 60% next year, but he won't commit to more than that at a time when industry leaders are moving into the low 50s.

A gradual shift in Whitney's asset mix from securities to loans is expected to boost the bank's net interest margin in future quarters. But bottom line results remain constrained by technology and merger-related expenses.

In the first quarter, Whitney returned 0.94% on assets and 8.76% on equity, mediocre compared to peers.

"They spent a lot of time investing in and rebuilding the company," said analyst John W. Coffey Jr., with Robinson-Humphrey Co. in Atlanta. "The next leg for them is to get the earnings up."

Mr. Marks, 52, knows he doesn't have a lot of time to bring Whitney's earnings up to peer levels.

Ohio's Banc One Corp., fresh from its purchase last year of Premier Bancorp in Baton Rouge, is known to be on the prowl for a major New Orleans presence, which leaves only three potential targets: Whitney, First Commerce, or Hibernia.

Whitney, the smallest of the three, could deliver a solid 22% market share in metro New Orleans. But an acquirer would also face potential problems: Whitney still lacks a strong retail base and its long-time corporate clients - the cream of New Orleans society, in many cases - might be tempted to flee to another local bank.

"If you look at the pecking order of New Orleans banks in terms of attractiveness to outsiders, I would think Whitney would come in third," Mr. Coffey said. "It's not a traditional bank."

Mr. Marks, in any case, is not about to sit around waiting for Banc One or anyone else to come calling. He said he intends to bring Whitney's technology up to speed with the rest of the banking world while moving forward with his Gulf Coast strategy.

His message to analysts and reporters alike: don't look for a quick buyout.

"Our strategy is to be successful," Mr. Marks said. "If you don't make any improvements, if you don't position yourself to compete, you're not going to be very attractive. Instead of buying you, maybe the acquirers will just let you shrivel up and die."

Whitney was indeed shriveling on the vine when Mr. Marks arrived in New Orleans in February 1990 from Birmingham's Amsouth Bancorp. The immediate problem was bad loans, which peaked at 13% of the portfolio in 1991.

After three years of losses, Whitney finally returned to profitability in 1992. But the neglect caused by decades of underinvestment proved harder to repair.

Until Mr. Marks took over, retail banking had such a low priority at Whitney that there were no ATMs. In the trust department, the product menu consisted entirely of government bonds.

Modern information management systems were also nonexistent. Whitney executives had to rely on financial reports from the bank's auditors, Arthur Andersen.

Even in commercial banking, its traditional strength, Whitney lacked cash management capabilities. About the only thing Whitney did - and did very well - was make loans to family-owned businesses in the New Orleans area.

In return for loyal support, in bad times as well as good, these customers rewarded Whitney with an extraordinarily high level of noninterest bearing deposits, typically 30% of total deposits or twice the southeastern norm, which helped keep the bank's funding costs down. As late as 1987, Whitney was the most profitable bank in New Orleans.

But the bank's lack of diversity finally caught up with it in 1989, when energy-related loan problems produced a $60 million loss and the departure of longtime CEO Patrick A. Delaney. Enter Mr. Marks, who installed an entirely new management team, bringing in new blood from banks such as Amsouth, Texas Commerce Corp., Wachovia Corp., Bank South Corp., and Comerica Inc.

Once the loan problems had been cleaned up, Mr. Marks began leveraging Whitney's still-abundant capital to diversify the bank by product mix and geography. An acquisition program took Whitney into several new markets in southern Louisiana, including Baton Rouge, where it now has 13 branches.

In 1995, Whitney thrust eastward along the coast to buy five branches from another bank in Mobile, Ala., where Mr. Marks had worked for Amsouth. Whitney now has seven branches there and intends to add five more by next year.

This year, Whitney also acquired two community banks in Pensacola, Fla., giving it five branches and a 5% deposit market share in that Panhandle city.

The gaping hole in Whitney's Gulf Coast franchise remains Mississippi, where the gaming industry is fueling robust growth in Biloxi and Gulfport. Mr. Marks said he has approached Gulfport's Hancock Holding Co., the dominant bank in this region, but to no avail.

"In a perfect world, if we could pick and choose, we'd want to be Hancock's partner, no question about it," Mr. Marks said.

In terms of internal growth, Mr. Marks has high hopes for Whitney's embryonic trust operation. The bank has spent the last few years staffing up the department and installing up-to-date systems to make it a contender in the business of marketing employee benefits and 4011(k) plans to companies.

Whitney's international department should also provide some future growth, although on a smaller scale than trust. Long known for its foreign exchange expertise, Whitney is now expanding further into trade finance, mainly by providing letters of credit to companies exporting to Latin America and Asia.

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