Gulf Coast Bank is offering 5.51% interest on a checking account, a deal that President Guy Williams says, “You can’t beat with a stick.” Fidelity Homestead Savings Bank is offering a broad suite of financial services to businesses. Regions Bank and BancorpSouth provide “remote capture,” which lets businesses make deposits from the office.
There are plenty of services for businesses and individuals who are shopping their accounts.
“Everybody is looking for deposits,” Williams says. “We’re all trying to take customers from our competitors. It’ll be a good time to be a consumer with money.”
New Orleans-based Gulf Coast Bank, which moved into the market after Hurricane Katrina in 2005, is competing with at least 50 brands—from national players such as Capital One and JPMorgan Chase to regional players such as BancorpSouth and Regions to community banks such as American Gateway and Teche.
Unlike other metropolitan areas where buyouts created a major financial institution, the Baton Rouge area has no dominant bank, which leaves room for Williams’ community bank to compete. Gulf Coast came in knowing it wouldn’t be an overnight success. The bank is staying focused on its core market of mortgages and business startups as a substantial Small Business Administration lender.
“This is probably one of the most competitive markets in the country,” Williams says. “The idea is to get attention and gain customers.”
Other banks moved into the Capital Region to take advantage of a robust and diversified economy anchored by state government, two universities and more than $6 billion in construction projects. As the economy has slowed, some banks have delayed plans for new branches and targeted existing and new customers for growth.
“In times of trepidation you stay in your comfort zone. You’re more prone to expand existing relationships,” BancorpSouth President Larry Denison says. “People who are well capitalized have a great opportunity to buy land cheap, pay less to expand. There are pockets of extraordinary growth.”
Denison anticipates his Tupelo, Miss.-based bank’s projected 3% to 5% growth will come mainly from existing customers. Remote capture and incentives promoting debit card use are among offerings.
BancorpSouth refused capital from the Treasury’s Troubled Assets Relief Program. Denison says one customer, angered that his previous bank took TARP money, recently withdrew more than $200,000 and deposited it at BancorpSouth.
“Everybody has the same bullets,” he says. “We’ve all got the same products, but packaged a little differently.”
Regions Bank is catering to business with new services like its Life Green Checking for Small Business.
“Financial institutions are operating in a tough environment right now, and the climate changes by the day,” spokesman Kendal Matassa says. “If I were to look into the future, I would have to say I don’t see competition easing anytime soon.”
Fidelity Homestead Savings Bank has blitzed the area with ads promoting its AdvantEDGE business deposit services for small- to medium-sized businesses. Also, a customer who opens a personal checking account at the Baton Rouge branch on Corporate Boulevard gets free use of any ATM nationwide.
“We expect the market to remain competitive although some of the national banking firms, because of global economic problems, have pulled back some in recent months on the lending side,” President Boyd Boudreaux says.
Lafayette-based IberiaBank also recognized the trend and seized the opportunity to make more loans. Baton Rouge President Keith Short says the bank grew by $115 million in the fourth quarter of 2008 over the same period a year ago.
IberiaBank has three branches in the area with a fourth under construction on Perkins Road just east of Bluebonnet Boulevard; a Prairieville branch recently closed.
“We expect a year of continued growth by deepening the relationships we have and by adding new ones,” Short says. “Baton Rouge has always been more resilient than many cities across the country and even in our own state. Being such a well-diversified community with firm stakeholders makes Baton Rouge a great place to do business.”
Sonny MacArthur, a partner with the Porter Keadle Moore accounting firm in Atlanta, says some banks are claiming their competitors are unstable in order to poach creditworthy borrowers.
MacArthur expects most Louisiana banks will come out of the recession in good shape. They’re feeling the hit, but their conservative portfolios are holding firm. He says more nervous customers are leaving “super banks,” a move that is helping smaller banks increase their deposits.
“I would certainly hate to be a banker in today’s environment,” he says. “It is a perfect storm hitting the banking industry right now. I think people are afraid to do anything for fear of the unknown. Don’t expect that anxiety to ease until the second half of 2009.”
Business Report asked area banks what they are emphasizing to attract customers in the Capital Region. Here’s what they said:
American Gateway Bank
• Rolling out a debit card rewards program in April called Gateway Signature
• Free checking with no minimum balance required, unlimited check writing, free Internet banking and, coming soon, free mobile banking
• Remote deposit that lets business customers bank 24/7 from their computer
• Incentives to promote debit card use
• Refused federal bailout capital
• Remote capture
Capital One Bank
• Treasury Management services for business clients with real-time information on their cash
• Direct payroll deposit
• Merchant Services provides businesses with faster receipt of accounts receivable
• SmartSwitch allows customers with bill pay-eligible checking accounts to electronically import online bill-payee information to Capital One online
• Chase Home Lending refinancing and mortgage, with historically low interest rates
• Chase Freedom Credit Card, with cash back on every purchase and bonus cash back on specific categories
• Chase checking account customers can receive higher interest rates on certificates of deposit and discounts on auto loans, student loans, mortgage, home equity loans and lines.
Fidelity Homestead Savings Bank
• Deposit business services called AdvantEDGE where small- to medium-sized businesses can have basic accounting to an analyzed account for more sophisticated operations
• Personal checking accounts opened in Baton Rouge include free use of any ATM nationwide
Gulf Coast Bank and Trust
• Personal checking account with 5.51% interest with minimum number of transactions, or the account is free
• “Flight to quality,” highlighting the 109-year-old financial institution’s successful weathering of previous recessions
• Free financial checkups and assistance
• Ultimate customer service that includes ?serving as an advocate for the customer
• One of the strongest capitalized banks in ?the country, having completed an IPO in October 2008 [did not accept Troubled ?Assets Relief Program capital]
• Rewards program called “DreamMiles” available with a bank Visa check card
• Rolling out a small business banking ?loan center
• High-quality service
• Personal service
• Prompt and local decision-making
• Attractive products and pricing
• Life Green Checking/Savings offers free services like bill pay, recycled checks and online statements in e-services; customers also can earn as much as $250 in savings bonus a month when they set up automatic savings
• Life Green Checking For Business offers free services like online banking, bill pay and e-statements; can also earn up to $250 in savings bonus.
• Quick Deposits allows customers to make deposits from the office
Teche Federal Bank
• Free checking
• Free business checking
• Commercial loans
DID NOT RESPOND: Omni Bank, Whitney National Bank