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DON KADAIR
COMMUNITY PLAN: Scott Gaudin, chief lending officer for Currency Bank, believes carving out niches in the agriculture and small business markets will boost the community bank’s Baton Rouge profile.
The circle of banking life
After a round of mergers and acquisitions by Baton Rouge-based banks, the next step in the cycle begins: the arrival of new community banks to the market. BY JULIA-CLAIRE EVANS
BANK MERGERS AND acquisitions in the Baton Rouge area were occurring at a steady clip before the pandemic. The deals have since slowed, and some say there remains a space for community banks to fill. The trend over the past few years has been mergers and acquisitions of smaller banks, says John D’Angelo, CEO of Investar Bank, although at the end of 2020 and beginning of 2021 there were numerous big bank mergers. A lot of the acquisitions have come from Louisiana banks venturing outside of the state, like IberiaBank’s recent acquisition in Florida, says Woody Briggs, vice chairman of Chaffe and Associates This trend was a direct result of banks seeking synergies and expense savings to improve financial metrics tracked by Wall Street, D’Angelo says. This also allows these much larger banks to
invest more heavily in financial technology, or fintech, like mobile banking and cryptocurrency. Mergers and acquisitions came to a near halt during COVID-19 due to the amount of uncertainty brought on by the pandemic, says b1BANK CEO Jude Melville. Banks were not going to make a deal decision during that period. Melville says b1BANK was able to partner with Pedestal Bank in south Louisiana during that period, but it was challenging. It was also one of the last mergers announced in Louisiana during the pandemic. Investar Bank had to postpone its acquisition of Alabama-based Cheaha Bank, D’Angelo says, but was able to close the transaction in April. The pandemic was one of those unpredictable things, says Scott Gaudin, chief lending officer for Currency Bank, which prior to a late August name change, was known as Commerce Community
Bank. Some banks had deals in the pipeline and ready to go and had to pause. But the deals are coming back, Melville says, as the economy recovers. Banking stocks are not what they were, but they are higher than they were during the pandemic. The maneuvers and sector conditions have convinced at least two small community banks— Currency Bank from Oak Grove and Ruston’s Louisiana National Bank—that there’s room to grow in the Baton Rouge market. An investor group bought Delta Bancshares, parent of Currency in October, and followed a familiar script: hiring banking veterans like Gaudin, who is overseeing lending efforts, and then hoping to boost the bank’s financials— and the group’s ROI—through loans to small- and medium-sized businesses. The bank’s board is a who’s
who of familiar names. The board chairman is Robert Daigrepont Jr., a certified public accountant and treasurer of Raising Cane’s Chicken Fingers. Other high-profile directors include Guaranty Broadcasting CEO Flynn Foster, Reliant Technologies Inc. founder Barry Hugghins, Phelps Dunbar partner Dennis Blunt, Beverly Moore Haydel, president and CEO of Sequitur Consulting, and Supreme Construction commercial contractor leader Ravi Patel, who also owns a family-run hotel. The group has injected additional capital into Currency to bolster its Baton Rouge expansion. In a move anyone familiar with the banking cycle will recognize, Currency’s legacy is in agriculture, primarily in smaller, more rural parts of the state and region. Over time, growth begins to slow, so what often happens next is a rural bank goes looking for well-heeled business investors in a larger market in which it can expand. In Baton Rouge, they found that banks were selling and growing and there was a space for a community bank like theirs, Gaudin says. “We plan to continue to serve the agriculture industry and grow our space in this geography,” he says, hoping to find a niche with sugarcane farmers in Iberville and Pointe Coupee parishes. “We’re unique compared to others, because our bank ownership is comprised of business owners. A lot of farmers also work for themselves, and we feel like our cultures align pretty well.” They are focusing on improving technology at the bank, Gaudin says, and have done more tech upgrades in three months than most banks do in a year. There used to be a wide technology gap between big and small banks, he says, but that gap has closed significantly, allowing for more community banks to operate on a level closer to that of larger banks. Louisiana National Bank, previously First National Bank, has been around for more than 100 years, says Alex Mahon, VPmarket leader. The bank changed its name when it moved to Baton Daily-Report.com | BUSINESS REPORT, September 2021
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