Local banks join forces: Collaboration to have Houma headquarters

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One of the 10 largest banking institutions based in Louisiana is set to be headquartered in Houma.

That’s because Louisiana Community Bank Corp. and Coastal Commerce Bancshares have agreed to join forces and base their 21-office and nine-parish operations out of the Bayou Region.

“That’s where the management team is going to be located,” explained current Coastal Commerce Bank CEO and soon-to-be CEO of the combined enterprise Mark Folse. “It’s effectively our management team at Coastal Commerce that’s going to lead the new organization. As CEO of the holding company, it makes sense to base the holding company where the senior management is.”

The resulting bank holding company will have assets nearing $900 million, according to the announcement.

Folse said recent changes in government regulations were the driving forces behind the decision to combine.

“Since 2008, 2009 when we had the financial collapse there’s been somewhat of a movement in the community banking industry that believes that there’s going to be a certain amount of size or scale that’s going to be necessary to be able to remain independent and be able to return a sufficient investment to your shareholders,” Folse said.

The CEO said there has been an onslaught of regulatory activity and regulations handed down from Washington, D.C., since the financial collapse.

“And they just keep on coming,” he said, “so the fact is the industry has garnered some consensus around this, and that is that it is simply just going to cost more to run a small bank than it used to. To compete, you’re going to have to be a little larger than you were before to be able to overcome that cost.”

With City Savings Bank, Kaplan State Bank and Teche Bank and Trust joining Coastal Commerce Bank under the agreement’s umbrella of independent banks, Folse said diversifying the portfolio of the holding companies was another reason for the collaboration.

“We’ll be in a situation where the holding company will have the benefit of not only having oil and gas business in our portfolio, but other industries that span the I-10 corridor all the way up north of Lake Charles. There’s a lot of diversification there that goes along with what we think there should be running a sound business,” he said.

The local banking customer may not notice much of a change; however, Folse said the collaboration could give the banks under the umbrella more lending size capacity.

“Even though we’ll be separate banks, we’ll have the ability to participate loans among the sister banks, so that will let us potentially get into lending arrangements where before we might have been left out of because of our size,” Folse explained.

Terrebonne Parish Consolidated Government Economic Developer Katherine Gibson-Theriot expects a seamless transition for consumers.

“Our local community banks have built their business on oil and gas to a great degree. This will extend the holding company assets out to other industries,” she said. “I think it’s a great compliment to the professionalism of Coastal Commerce Bank and the banking community as a whole here.”

Although the agreement will not immediately bring jobs to the Houma area, Folse said that as the organization continues to grow, it will need to add people to the organizational structure.

The boards of directors for both Louisiana Community Bank Corp and Coastal Commerce Bancshares have approved the collaboration unanimously, and the transition is scheduled to be operational Jan. 1, 2015, pending shareholder and regulatory approval.

Bank teller Kathleen Cockerham serves customer Mindy Fischer at Coastal Commerce Bank in Houma. Louisiana Community Bank Corp. and Coastal Commerce Bancshares announced last week they are combining their 21-office and nine-parish operations.