The Dixie Dealmaker is at it again.
Not content with nine acquisitions in four years — including one on Monday — and the addition of billions in assets, Iberiabank Corp.'s Daryl Byrd is pointing his pirogue north, toward the Mason-Dixon Line. That's a long ways from Cajun country.
In an interview Tuesday, Byrd, Iberiabank's CEO, indicated that he is increasingly looking beyond his home state of Louisiana for growth, though he declined to identify specific markets in his crosshairs. "That [would] put me at a disadvantage competitively," he said.
For Byrd, that means vetting countless opportunities, particularly if consolidation heats up in the next 12 months. "You have to kiss a lot of frogs to find the ones that make a lot of sense," he says.
Iberiabank has done its part to spur deals. Since March 2008, the $11.7 billion-asset Lafayette, La. company has more than doubled its size, buying five failed banks, a trust company and two whole banks. On Monday, it agreed to buy the $350 million-asset Florida Gulf Bancorp in Fort Myers.
Including Florida Gulf, Iberiabank has announced four acquisitions in Florida since the financial crisis. Despite ongoing real estate woes, Florida probably provides more opportunity for growth than does Louisiana, says Matt Olney, an analyst at Stephens Inc.
"Florida is up there with Alabama and Texas in terms of the markets they're in today where they want to expand further," Olney says. "They had a small market share in this part of Florida, and they wanted more."
Florida Gulf, the holding company for Florida Gulf Bank, has outperformed many Florida banks that have been hammered by nonperforming real estate loans, Byrd says. At Dec. 31, Florida Gulf had $16.4 million in nonperforming assets, or about 4.7% of total assets. Its total risk-based capital ratio was 13.3% at the end of the year.
"There haven't been ... that many true healthy bank acquisitions in Florida," Byrd says. "People would say they've done them, but we think this clearly is a healthy bank. They've done a pretty good job in terms of [commercial-and-industrial] lending."
Iberiabank's latest deal is also a good fit with its existing Florida operations, with Florida Gulf's eight branches located between Sarasota and Naples, where Iberiabank already had branches, says Jeff Davis, an analyst at Guggenheim Securities LLC.
"It may be a number of years before the earnings power from this franchise is fully visible, but they are building a really nice franchise," Davis says.
The acquisition would boost Iberiabank's retail deposit market share to sixth place in the Fort Myers area, compared to 18th place now, Davis says.
The deal cements Florida's position as Iberiabank's second-biggest state, with 28% of its nearly 180 branches and 25% of total deposits. Louisiana has 44% of Iberiabank's branches and 55% of deposits. Arkansas is third in both.
Iberiabank began its latest acquisition spree by focusing on deals brokered by the Federal Deposit Insurance Corp., but its last three acquisitions have involved whole banks. That trend should continue, says Christopher Marinac, an analyst at FIG Partners LLC. "There are many more opportunities [for Iberiabank] on the regular side than on the failed side," Marinac says.
The company also seems poised to raise additional funds if another acquisition opportunity comes along. Earlier this month, Iberiabank filed a shelf registration with the Securities and Exchange Commission that would allow it to quickly raise capital using a number of different securities.
Byrd said in a March 5 press release announcing the shelf registration that the filing replaced a shelf registration set to expire later this year. "We have no current plans to issue any securities at this time," he said in the release.
Still, Byrd on Tuesday did not rule out more failed-bank deals, and Davis notes that that company was listed in FDIC documents as a bidder for BankEast in Knoxville, Tenn. (U.S. Bancorp in Minneapolis emerged as the successful bidder for BankEast, which failed on Jan. 27.)
While admitting that Iberiabank will often place second in a bidding war for banks up for sale, Byrd says he it is rare for him to get upset when his company loses out to another banking company. "Sometimes people want a franchise worse than we want it," Byrd said.