Exit the builder; enter the surgeon. That pretty much sums up the sudden shift in power at the top at Baltimore's MNC Financial Inc.

Alan P. Hoblitzell Jr. is out as chairman and chief executive officer and Alfred Lerner, a wealthy Cleveland businessman and investor who is MNC's largest shareholder, is in.

It remains to be seen whether the regional banking giant that Hoblitzell created can successfully undergo the surgery that's required to restore its health, seriously impaired by millions of dollars in nonperforming real estate loans and a weak economy.

"We have to bang away at {the problems}, get the business back to where it should be," Lerner told Washington Post staff writer Sharon Walsh this week.

Lerner, who has a reputation for being a smart but tough executive, is generally given high marks for his ability to turn around troubled companies. People in the banking industry say it was Lerner, as chairman and biggest stockholder in Equitable Bancorp, who was primarily responsible for its improvement before MNC acquired it earlier this year.

It's unlikely that anyone will be able to apply a quick fix to MNC's troubled real estate portfolio, though analysts generally agree that making Lerner chairman is a good move at this time. "I think that Lerner will take a harder line" in getting at MNC's real estate loan problems, says David S. Penn, an analyst at Legg Mason Inc. in Baltimore.

MNC's primary difficulty, of course, stems from the broad exposure of two of its subsidiary banks -- Maryland National, the state's largest, and Washington's American Security Bank -- in a depressed real estate market. Forced to increase its reserves against possible losses from real estate loans, MNC reported a $75 million loss in the second quarter. The immediate outlook is not good, to say the least, though that is not the same as saying MNC can't solve its problems and return to profitability. It can and should eventually regain some of the luster it lost in the wake of problems that led to the devastating earnings report.

Lerner says he doesn't plan to be chief executive at MNC indefinitely, but for now, at least, he is the man with the scalpel. And whether he chooses to cut or "bang away" at the problem, as he says, it's almost a foregone conclusion that Lerner will direct a massive restructuring at MNC. That might entail deep staff cuts, jettisoning some operations or both. As Daniel G. Finney, MNC's vice president for communications, says, "Corporate restructuring for MNC Financial involves realigning the company's resources in such a way as to have the company focus on its most profitable and least cost-efficient business segments while downsizing and, in some cases, even eliminating those business activities which do not meet our profit hurdles or do not show prospects for future growth."

Hoblitzell, by taking early retirement now, is saying, in effect, that he's not the man for that job. It was almost too much to expect him to tear apart what he had created since becoming CEO seven years ago. And that's what restructuring the company will entail to some degree. Hoblitzell's style, more like that of the conductor of an orchestra, is hardly the hands-on, roll-up-the-sleeves approach that's needed to cut costs, business segments and, unfortunately, perhaps hundreds of employees.

Lerner and others say Hoblitzell wasn't pushed, but that he decided on his own to step down as chief executive of the regional banking powerhouse of which he was architect and chairman. Hoblitzell has elected not to comment publicly on his decision. Whatever the circumstances, change at the top was inevitable.

Under Hoblitzell, Maryland National Corp., the forerunner to MNC, went from being the largest bank company in the state to what's known as a "super-regional," with almost $28 billion in assets. In just three years, MNC not only solidified its base in Maryland but also emerged as one of the more formidable institutions in the mid-Atlantic region with the acquisitions of American Security and Equitable.

Hoblitzell, however, apparently wanted no part of the downsizing or bloodletting that MNC apparently needs to regain its firm financial footing. "His expertise certainly isn't in turning companies around," observes Legg Mason's Penn.

Finney's reflections on his former boss probably sum up best what Hoblitzell himself likely would acknowledge: "You take the exact opposite of what I said {about restructuring}, and you add in the other pieces, which were rapid growth, rapid diversification and rapid positioning for the advent of interstate banking, and you have his strengths."

"Hoblitzell's not a man who likes to knock heads," says a former colleague. "He's an intellectual. He understands things on an intellectual level that most bankers don't."

Lerner, on the other hand, says a Baltimore bank executive, is "a guy with no hidden agendas, very blunt, straightforward, at times very opinionated, personable and into a million things at once. He's also the guy that has the most at stake personally in seeing MNC prosper."

But can he carve a new direction in time for MNC get over its hurdles in the hazardous real estate lending arena? "The best I can say is that nonperforming loans could double, which would be the worst-case scenario," says Penn. "Even if nonperforming loans go to $1.5 billion, the company will survive. I don't think it will go out of business."

Arnold G. Danielson, president of a Rockville bank consulting firm, agrees. "MNC will suffer for a year or so, and unless things are worse than they appear, it will continue to be a strong franchise."

Danielson calculates that MNC's nonperforming loans, as a percentage of assets, totaled only 2.75 percent at the end of June. Six of the 11 largest banking institutions in the Northeast had much higher percentages. The recent disclosure of problems in MNC's loan portfolio "still doesn't change my belief that it's a good franchise," Danielson asserts. "Unless something turns up that we don't know about, {MNC} is still a good long-term investment."

Lerner at least is in a position to begin restructuring from a base of relative strength. With one of the industry's biggest and more profitable bank card operations, dominance in the state of Maryland and a strong foothold in the District, MNC is still a formidable operation that would be difficult to acquire even with its asset problems. Only Sovran Financial Corp., through its recent megamerger with Atlanta's Citizens & Southern Corp., is bigger ($50 billion) among mid-Atlantic-area bank holding companies.

In any event, the change from Hoblitzell to Lerner obviously marks the transition from the go-go '80s to the restrained '90s.