BANKING: To the Rescue: Casey at Bat

The financial community gasped last month when the U.S. Government had to prop up First RepublicBank of Dallas with $1 billion, but the true magnitude of the bank’s problems was not evident until last week. Awash in bad real estate and energy loans, the bank projected a loss of $1.5 billion in the first three months of 1988, the second largest quarterly deficit in U.S. banking history. (Citicorp lost $2.5 billion in the second quarter of 1987.)

Appalled by the bank’s condition, federal regulators asked Chairman Gerald Fronterhouse to resign. His replacement is Albert Casey, 68, who steered once troubled American Airlines back on course as chairman from 1974 to 1985. American had been laden with many layers of unnecessary staff and subsidiaries. Says Casey: “I fired them all and cleaned them out.” He may have to be as ruthless at First RepublicBank.