Alabama has been a hot market for consolidation in recent years, and Iberiabank Corp. of Lafayette, La., sees the potential for employee and customer defections as an opportunity.
The $5.4 billion-asset company hired a market president in Mobile this month as a first step in its effort to expand into the neighboring state.
It plans to build two to five branches and add a few hundred million dollars of assets there over the next few years.
Daryl Byrd, Iberia's president and chief executive officer, said in an interview that entering Alabama makes sense now, because consumers might be looking for a new bank with all the upheaval lately.
Mr. Byrd said the Alabama market also is very similar to Iberia's current ones, making the state an easy fit.
"We are excited about it," he said. "It is a logical franchise extension for us."
Several major acquisitions have jostled the local market, including Banco Bilbao Vizcaya Argentaria SA's 2007 purchase of Compass Bancshares Inc.; Regions Financial Corp.'s 2006 purchase of AmSouth Bancorp; Wachovia Corp.'s 2004 purchase of SouthTrust Corp.; and Wells Fargo & Co.'s purchase of Wachovia last year.
"You have some banks going through dislocation there, and that could provide some opportunity for us," Mr. Byrd said.
The new Mobile president, Lawrence "Russ" G. Ford, had been a senior vice president and the commercial market manager for southern Alabama at Regions. Mr. Ford had joined Regions when it acquired AmSouth.
Iberia, which has 88 branches in Louisiana, Arkansas, and Tennessee, recently got $200 million of capital — $90 million from the Treasury Department's Troubled Asset Relief Program and the rest from a secondary offering to private investors.
The company said it would use the money to expand by making loans and buying banks, though it said it would be cautious about purchases.
Industry watchers said another reason now is a good time to enter the Mobile market is because the tourist area's housing prices have already dropped and stabilized, so lending there will be less risky.
"They are coming in when it is past all the losses," said Gary Kennedy, the director of advisory services of Sheshunoff & Co. Investment Banking.
Mr. Kennedy said refraining from buying a bank also would help keep the loan portfolio clean.
On a conference call last month, Mr. Byrd said that, aside from federally assisted deals for failed banks, he was wary of acquisitions. "I'm very concerned about this market, and I look at companies, and I look at their portfolios and … the amount of construction and land development" loans they hold, he said. "We have not had much fun with that $113 million" of builder loans inherited from the 2007 acquisition of Pulaski Investment Corp. That portfolio has been reduced to $28 million. "I sure don't know why I would want to add to that if I did not have to."
Bain Slack, an analyst at KBW Inc.'s Keefe, Bruyette & Woods Inc., said choosing Mobile instead of a bigger city fits Iberia's profile of staying out of heavily banked areas.
"It is a market that isn't viewed as overly competitive or chasing demographics," he said. "Given the capital they raised at the end of 2008, it puts them in a good position to be opportunistic, either through acquisitions or picking up talent. … This is a good way of strategically using that capital without overreaching and taking on more credit risk."
