Three years post-Hurricane Katrina, local banks are on the move. New branches are popping up all over town – with more on the drawing board – and bankers say their institutions are playing a vital role in city’s rebuilding. Here’s a look at what’s new with area banks as they try to read the tea leaves and see which products and services clients will need to go forward.
Its name might be Metairie Bank & Trust but Ric Smith, president and CEO of the community bank, says his company is eagerly embracing other parts of town. Even before Katrina western St. Tammany was a target. The bank opened a branch in Mandeville in January and expects to begin construction on a Covington location in late 2009. Other possible expansion sites include Kenner, Harahan and perhaps Orleans Parish.
The bank’s newest product innovation is remote deposit capture, a service businesses like because they can process checks in their own offices and transmit them electronically to the bank. The service is especially popular with doctors, lawyers and others who take in a lot of checks during the business day.
“No longer do [our customers] have to be sitting next to the branch they are dealing with,” Smith says. A bonus: businesses can take the equipment if they’re forced to evacuate. “That’s imperative since Katrina,” he says.
Like some other lending institutions, Metairie Bank is seeing a slowdown in the home loan market. People who might otherwise put their houses up for sale are staying put, Smith speculates, until prices start trending up again. On the plus side, the local market continues to be buoyed by the hundreds of millions of dollars being spent on schools and infrastructure.
Smith says that in addition to its high service levels, Metairie Bank is thriving because of its conservative nature. “We position ourselves as the lowest-cost place for people to borrow when they have equity, good income and good credit,” he says. “We’re not stretching to do subprime loans.” Before making a loan, “we verify income, we find out what a house is really worth,” he says. “We’re not lending 110 percent of the value of a house.”
Capital One Bank, which entered the local market through its purchase of Hibernia National Bank, is also expanding. The bank is constructing a new flagship branch at Napoleon and St. Charles avenues and a branch at Gentilly and Elysian Fields boulevards. A number of existing branches are under renovation, including banks on Severn Avenue, and on Carrollton and West Esplanade avenues.
Several new products and services focused on consumers are proving popular, says Steve Hemperley, city president of Capital One New Orleans. Capital One offers remote deposit, and its reward checking account earns points toward airline miles, cash, merchandise and other perks. “Our no-hassle credit cards are also rewards-types cards,” he says.
Hemperley says one of bank’s most community-minded products is its new market tax credit program through which the bank helps borrowers use federal tax credits to finance projects that contribute to the rebuilding of New Orleans. Both nonprofit and for-profit projects can qualify for the program. “It encourages reinvestment and investment in lower-income communities,” Hemperley says. “We have a number of lower-income census tracts in our area.”
Capital One has built upon Hibernia’s strong participation in community affairs, Hemperley says; the bank supports a number of area organizations such as Junior Achievement, the Louisiana Philharmonic Orchestra, the Jefferson Performing Arts Society, the New Orleans Ballet Association and local universities and community colleges.
First NBC Bank may be just 2 years old, but the bank is already expanding. In the past year, First NBC has opened branches in Kenner and Terrytown and replaced its temporary branch in Elmwood with a permanent office. More permanent branches are on the way, says Ashton Ryan, president and CEO. The move into Kenner and the West Bank is part of the bank’s outreach to Hispanic customers, he says.
The bank has contributed $10 million to a pool formed by several financial institutions to help low- to moderate-income families buy their first homes. “That product should be out aggressively, along with an alternative mortgage program,” Ryan says. First NBC also offers both smart deposit, which allows clients to swipe in their checks, and a courier service that picks up deposits and brings them to the bank.
The parent company of First NBC has acquired another local financial institution, Dryades Savings Bank. The move makes Dryades and First NBC “sister” institutions, each with its own leadership. “Having a separate minority bank is important for a city like New Orleans,” Ryan says.
Kimberly Y. Lee, president and CEO of Dryades, says market analysis shows some minority customers prefer doing business with smaller institutions and with bankers who are committed to spending more time with them. “We needed a capital infusion, and partnership with First NBC has given us that,” she says. Dryades has four locations open and is in the process of reopening its Read Boulevard office. The goal is for Dryades customers to be able to conduct business inside First NBC branches, Lee says.
Ryan credits First NBC’s quick success to its three-pronged approach: hire the best people, offer a rapid response and build relationships with customers that encompass loans, credit cards and deposits – “the whole shebang.”
One of the oldest businesses in town has some new leadership. Whitney National Bank, which marks its 125th anniversary this year, named John M. Turner Jr. president in March. Turner has been with the bank since 1994 and moved to New Orleans from Mobile.
Whitney’s strength is its immersion in the business community of New Orleans for so many decades, Turner says. “We believe we understand business, businesses’ needs, and we are very supportive of businesses through good and challenging times,” he says. Whitney is known as a conservative, sound institution, Turner says, and he expects to maintain that reputation.
Whitney has reopened all branches that closed because of Hurricane Katrina and is in the process of rebuilding temporary facilities in Chalmette, on Read Boulevard and in Gentilly. The bank is operating in a temporary facility on Harrison Avenue, but is developing plans for a new branch there. The Broad Street bank remains shuttered because Whitney elected to move to a new location under construction on Jefferson Davis Parkway. In addition, Whitney has opened new branches in Marrero, LaPlace and Hammond in the past six months.
Whitney is gaining a larger presence on the North Shore through its merger with Parish National Bank. The merger brings the bank “increased market share, a number of outstanding employees and resources,” Turner says. “Parish was innovative in a number of ways.”
During the fall and winter Whitney will mark its anniversary with customer appreciation events in all of its branches. A bank doesn’t post the longevity and strength Whitney has without developing strong customer relationships, Turner says. “We want to celebrate our relationship with our quality customers.”
The hot oil and gas market in Lafayette is one reason First Bank and Trust is building a major branch there, says Rene Oubre, the bank’s market area president for New Orleans. Lafayette has a thriving real estate market as well, and First Bank plans another branch there in the future, he says.
A permanent facility is under construction in Covington, where First Bank operates from a temporary site, and should be opened by the end of the year, Oubre says. “That’s an important step for us,” he says. “We weren’t on the North Shore before. It’s a good move for the bank, which is basically a small-business-driven bank.”
First Bank has announced a merger with Globe Homestead in Metairie, which Oubre says emphasizes the bank’s commitment to the Jefferson Parish market. The merger should be complete by the end of this year.
Oubre says First Bank is still seeing good loan demand in the New Orleans market. He says the bank’s local ownership is a plus, as is its strong bench. “The experience of our lending staff is good,” he says, “and management experience is good.” The bank recently signed a new director, local maritime entrepreneur Donald “Boysie” Bollinger.
Another community tie is the bank’s alliance with the New Orleans Saints. Saints Coach Sean Payton has agreed to serve as a spokesman for the bank, helping its marketing efforts in Louisiana and Mississippi. (In Mississippi, the bank operates as First Bank and Trust of Mississippi).
Among its new products is the bank’s Patriot Express Loan, an SBA-assisted loan designated to help returning servicemen and women open or expand businesses. The bank also offers remote deposit services.
Customers of Chase Bank, which entered the local market when it purchased Bank One in 2004, can take advantage of new branches on Read Road, South Carrollton Avenue and West Judge Perez Drive as well as ATMs in every Walgreen’s in Louisiana. The bank also offers Chase Mobile, which allows clients to use their cell phones to access account information 24-hours a day. To help credit card holders manage their accounts, Chase provides a program called “Clear & Simple.” Also, Chase Exclusive gives all checking-account holders special rates and discounts on bank products.
Greg Hassell, who oversees regional media relations for Chase, says the institution’s size and scope of services give it an edge in the local business market. Energy is an international business, he says, and Chase has international capabilities. Closer to home, Chase supports a number of New Orleans philanthropies, including Habitat for Humanity.
Iberiabank has completed opening its branch in the Pan-America Life Building in the Central Business District, and is in the process of building a new branch on Veterans Memorial Boulevard. Karl Hoefer, president of the New Orleans market, says the bank expects to begin building a new branch on Metairie Road in early 2009, and is looking at possible sites on the North Shore and in Houma. Iberiabank is upgrading branches as well, Hoefer says. “We’re very bullish on the whole region,” he says, citing the strong oil and gas sector and the rebuilding from hurricanes Rita and Katrina.
Many of Iberiabank’s employees had long relationships with high-quality clients at other banks, before it came into this market, Hoefer says, and those relationships have continued. Quality clients help banks ride through rocky economic times, he points out.
The bank has chosen its target markets carefully, Hoefer says, avoiding heavier construction and development projects. “We’ve stayed away from riskier lines of business,” he says.