The ink has dried on the agreement that allows Lafayette-based IberiaBank to take over two failed Florida financial institutions with the blessing of the Federal Deposit Insurance Corporation.
As a result of its acquisition of Naples-based Orion Bank and Sarasota-based Century Bank, IberiaBank has increased its assets to nearly $10 billion and has climbed to No. 2 among Louisiana’s largest financial institutions behind Whitney National, which has $11.9 billion in assets.
But one big question remains as IberiaBank moved into two of the most affluent areas in south Florida. How, in an environment where banks fail regularly and markets are rife with financial uncertainty, does an institution forge a reputation with new employees and former clients while enticing potential customers through the door?
IberiaBank President/CEO Daryl Byrd says it’s all about the team being put into place and choosing the right people to define the brand in those markets. That doesn’t include the obvious answers of spreading the word about the solid business practices and growth on which IberiaBank prides itself.
“People have figured out pretty quickly who we are and what we stand for,” he says. “We’ve gotten a lot of attention. Our name stands out in that type of banking environment.”
An evolving brand is not uncommon among banks that grow by acquisition, because the group taking over has to incorporate the existing company’s brand into its own corporate culture and core values. That can be a painstaking process in which success often depends on the chain of command put in place to oversee the changeover, says Rajesh Narayanan, Cameron professor of finance at LSU.
“A lot of the time during an acquisition, all parts of that company’s brand will not translate into your brand,” he says. “It’s then the corporation’s decision on how to develop [the brand] organically from there.”
Branding in the financial world is critical because it is so competitive. Large national banks, regional and community banks and even credit unions are competing for customers who, in a recessionary environment, are more wary and critical about the institutions with which they choose to place their money.
Advertising and public-relations blitzes attract attention, and behind-the-scenes meetings with community leaders establish a reputation. But no advertising in the world can make up for what happens when an undecided customer walks in with their business.
“Advertising makes the promise, but it’s not the brand,” says Bob Seals, senior vice-president and Director of Strategic Marketing for Hancock Bank, which on Dec. 18 announced it had acquired Panama City, Fla.-based Peoples First Community Bank—a move that enabled Hancock to enter the Destin-Fort Walton Beach, Jacksonville, Panama City and Orlando markets.
“The brand is in the delivery of those services and the customer’s experience with us.”
Gulfport, Miss.-based Hancock Bank, which operates branches in Louisiana, Mississippi, Alabama and Florida, has long touted its stability and security. The recession has provided an opportunity to heavily promote those qualities because they mean more in bad times than good. Once that message is established, it’s the people in the branches who follow through with the company’s core values.
Byrd has no worries about his management team.
Top-level employees such as Chief Operating Officer Michael Brown, Director of Financial Strategy John Davis and Retail Director Mike Naquin can offer unique insights into markets such as Little Rock, Ark., Raleigh, N.C., or New Orleans because they live there.
The acquisition of Orion and Century banks also are not this team’s first rodeo. IberiaBank first moved into Florida in August, when it acquired Birmingham, Ala.-based CapitalSouth Bank, which had three locations in Jacksonville, Fla.
“In this environment, it’s easy to attract talent to our institution,” Byrd says. “It’s all about the people you have on the ground and getting the right people in place.”
IberiaBank’s approach to the Florida markets is two-pronged. With acquired branches in the upscale markets of Naples, Sarasota, West Palm Beach and the Keys, wealth management and other services will resonate with that demographic. Florida also has strong consumer markets, something Iberia-Bank has also proven adept at attracting through steady expansions in Louisiana and Arkansas.
Byrd says his bank has a pattern of countercyclical growth. For example, when a number of large premium banks began moving into Florida in the past three years, IberiaBank chose to expand in Arkansas instead.
When the recession and a flagging real-estate market left Florida’s financial institutions in turmoil—with more than a dozen banks failing this year—that opens the playing field for a company like IberiaBank, which has been positioning itself to take advantage of the situation.
Narayanan says expansion by acquisition in embattled markets such as Florida is very likely in the coming year so long as well-capitalized banks balance growth opportunities with the inherent risk that comes with expanding into a new market. After all, more than 120 banks have failed in 2009, and more than 400 currently sit on the FDIC’s at-risk list. That means a buyers’ market for anyone who meets all the requirements to make a deal.
At this point, Byrd isn’t ruling anything out.
“We believe we are getting into it [Florida] at the right time, place and with the right structure,” Byrd says. ”We’re looking at markets around the South for the right opportunities to grow.”
Terms of service
When IberiaBank acquired Naples, Fla.-based Orion Bank and Sarasota, Fla.-based Century Bank, terms of the agreement with the FDIC included:
34 full-service offices throughout south Florida
Total assets of approximately $3.1 billion
Total loans of approximately $2.5 billion?Total deposits of approximately $2.5 billion
SOURCE: IberiaBank
