Like New Orleans next door, Omni Bank in Metarie, La., is undergoing a reincarnation of sorts.

The $750 million-asset bank has hired new management and is shifting its focus from residential loans to commercial and industrial. Plus, plans are being made to bulk up through acquisitions.

Last week, the unit of Omni Bancshares Inc. said it's hiring Bob Tusa as executive vice president and manager of business banking, and Chris Braud as senior vice president and relationship banker. The two recruits join Kyle Waters, who started as president in February. All three were with Capital One Financial Corp. after it bought the $23 billion-asset Hibernia Corp. in New Orleans in 2005 for $5.3 billion.

Waters said the specifics of Omni's new five-year plan — like asset-size goals and loan-portfolio allocation — are still under construction, but he expects some significant changes.

"We want to grow. We absolutely want to grow," he said, noting that when he started with Hibernia in 1973, the company only had $601 million in assets before it did about 60 acquisitions in Texas and Louisiana. "We are $750 million in assets now. If we just grow on a granular basis, we would get that to $1 billion in the next three to five years. But I want to get bigger, and the way to do that is mergers and acquisitions."

Before the company will start doing deals it has some work to do on itself, Waters said. The bank is cleaning up its loan portfolio, developing efficient processes for handling loans and a strategic plan, and preparing to raise capital.

"If you want to do mergers you have to have a clean shop," he said, noting he does not intend for the bank to reach anywhere near Hibernia's size. "We have a lot of work to do. We will be gussying ourselves up."

The company applied for funds under the Treasury Department's Troubled Asset Relief Program, but has not yet decided if it will participate, Waters said, and taking the company public will not happen until the market for bank stocks improves.

Industry watchers said now is a good time for a bank that does not have significant internal loan problems to get involved in new lines of business.

"It is counterintuitive," said Jeff Davis, a senior analyst with First Horizon National Corp.'s FTN Equity Capital Markets Corp. "If you assume the world doesn't end, this is a great time to be stepping into a new business, in that if you are not burdened with legacy assets and you have capital and can hire people, there is a lot of opportunity. Existing banks are struggling with existing assets and pulling in their horns."

Still, capital, which Omni needs to anchor its growth, remains somewhat elusive for smaller banks, said Dan Bass, the managing director of the Houston office of Carson Medlin Co. "If they try to go to outside sources, then it will be difficult," he said. "If they already have friends and family and associates willing to invest, then they should go for it. But right now, bringing in institutional investors is really difficult."

Waters acknowledged Bass' point. "Historically, we've already gone to friends, family, depositors and directors," Waters said. "Going to private equity is something that is different for us, but it is something we would like to explore."

Of Omni's $571 million-asset loan portfolio, roughly 38% is residential real estate, 8% is commercial and industrial, and 53% is commercial real estate, according to data provided from Foresight Analytics.

For the most part, Omni's credit quality is doing better than the national averages for banks, except its residential real estate portfolio, said Matthew Anderson, a partner at Foresight. The delinquency rate for first-lien mortgages was 11.7% on March 31, compared with the national average of 9.4% and the New Orleans metropolitan average of 8.3%.

Hurricane Katrina altered Omni's lending equation, Waters said, noting the bank pushed to do more single-family mortgages because the community was devastated and needed financing for the rebuilding. He said the average size of an outstanding loan in the portfolio was $171,000.

"As a community bank, that is our role," Waters said. "If we see issues in the community, we try to help with those issues. We thought it was good business and thought there was a need."

Still, he said, Omni "probably did more than we should have and more than we want to today." Now, with the housing market slowing, the company has decided to do more small and midsize business banking, owner-occupied business loans and working-capital loans.

"Our bank has a lot of products that these businesses want," he said, pointing to the company's treasury management products, business credit cards, brokerage services and other products in development. "We spent a lot of time on one-to-four-family and investor and rehabilitation and new builds, but we never left small businesses. What I want to do is less focus on one-to-four-family and more attention back to small-business basics … the basic bread and butter of banks."

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