Mutual of Omaha’s thrift unit is wasting no time following through on a pledge to build a nationwide branch network.
The insurance giant’s Mutual of Omaha Bank, formed late last year, announced this week that it is planning a major expansion into Texas and that it has hired a former top executive of Regions Financial Corp. to lead it.
Its plan is to have 30 to 35 branches and $1 billion to $2 billion of assets in major metropolitan areas within seven years, Robert F. Strong, Mutual of Omaha Bank’s market president for Texas, said in an interview Thursday.
“For a de novo expansion program, [Texas] is the best place to start,” he said, citing the state’s robust economy and strong population growth. Until last month, Mr. Strong was the Dallas market president and chief executive for Regions, a Birmingham, Ala., banking company.
Mr. Strong said that the $700 million-asset Mutual of Omaha Bank would also consider buying small banks in Texas to accelerate its growth there.
Mutual of Omaha formed a thrift holding company, Omaha Financial Holdings, in early 2007 and by yearend had acquired three banks in Nebraska and Colorado and rebranded them under the Mutual of Omaha Bank name.
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Mutual of Omaha Bank is starting its Texas expansion in the Dallas area, the fastest-growing region in the country from July 2006 to July 2007, according to data released Thursday by the Census Bureau. Austin, Houston, and San Antonio also were ranked among the top 10 growth markets.
Mr. Strong said that people moving to Texas are going to look “for a brand and delivery channel they can trust.” Mutual of Omaha Bank, once it is up and running, will “have the same shot or better than any other community bank” at winning this business, he said.
Mutual of Omaha will also count on its agents to bring in banking business. The insurer has 82 agents in north Texas.
Clark Locke, the head of investment banking in the Austin office of Hovde Financial Inc., said the newcomer’s biggest challenge in Texas will be expanding deposits organically. Deposit competition in Texas is fierce, and Mr. Locke said that Mutual of Omaha Bank’s best bet to capture meaningful share is to buy community banks.
“I think really what it comes down to, and it has been shown in Texas,” he said, “the funding side of the balance sheet is what is often hardest to procure right now.”
The good news, he said, is that a deep-pocketed company like Mutual of Omaha should have no trouble finding purchase opportunities. “Now is a favorable time to come in with strong financial backing and pursue deals,” he said.
Mr. Strong said the thrift holding company has the capital to buy banks as large as $1 billion but that it would prefer targets in the $150 million to $250 million range.
For now, though, the focus is on organic growth. It wants three lenders in the Dallas area by yearend and to open its first branch there early next year.
