Though the $8.4 billion-asset Trustmark Corp. has the No. 1 deposit share in Mississippi, it was spared the worst of Hurricane Katrina's destruction - because it had no branches on the Gulf.
Now it is moving in, to service its Gulf Coast loan portfolio better, establish a new deposit base in the region, and position itself to finance the recovery effort.
On March 3 the Jackson, Miss., company applied to the Office of the Comptroller of the Currency for permission to open a full-service branch in D'Iberville.
"This will be the first step" in establishing a retail branch network on the coast, said Jerry Host, the president of Trustmark National Bank. "We hope to expand our lending operations from this Gulf Coast footprint."
The new branch is expected to open in mid-April. Mr. Host would not talk about a timetable for opening more branches.
Bankers and analysts say the funding needed for the recovery means an unprecedented opportunity for banks. "It's going to be something to behold," said James Schutz, an analyst with Sterne, Agee & Leach in Birmingham, Ala. "I don't think we've ever seen anything like this."
In the first six months of the recovery effort, two pieces of legislation put the Mississippi Gulf Coast on better footing to rebuild, bankers and analysts say.
On Oct. 17, Gov. Haley Barbour signed a law that lets casino operators in cities such as Biloxi and Gulfport build on land within 800 feet of the shoreline. (Mississippi casinos previously had to be built on piers or floating barges - many of which were destroyed in the storm.) Analysts say hotels and restaurants will spring up around the land-based casinos.
And on Dec. 21, President Bush signed the Gulf Opportunity Zone Act of 2005, which designated more than half of Mississippi, including the entire Gulf Coast region, as a "Gulf opportunity zone" and provided economic incentives to build there, including a 50% bonus depreciation for most depreciable property.
Analysts applauded Trustmark's expansion plan. "If they weren't doing it, I'd be shaking my head wondering why," said Barry McCarver, an analyst at Stephens Inc. in Little Rock. "It's an awesome opportunity."
Trustmark established two emergency branches in the region in mid-September to service its mortgage customers there. Mr. Host said that experience persuaded the company to establish a permanent presence.
No doubt Trustmark will face stiff competition from a slew of other Mississippi banking companies with roots on the coast, including the $5.9 billion-asset Hancock Holding Co. of Gulfport and the $11.5 billion-asset BancorpSouth Inc. of Tupelo. Hancock is by far the largest banking company in the Biloxi-Gulfport metropolitan area, with nearly half of the deposits there, according to Federal Deposit Insurance Corp. data.
But Mr. Host said Trustmark has a base to build on. It has about 2,000 automobile loans and 4,000 home mortgages in its Gulf Coast portfolio, as well as relationships with builders and developers in the area, he said.
"If we were going down there and we had no pre-existing business, it might be a more risky proposition," Mr. Host said.
Mr. McCarver said Trustmark's name, known throughout the state, should help it establish itself. "It should be a cakewalk," he said. "The brand should already be recognized."
Ray Wesson, the president of BancorpSouth's Gulf Coast division, said all of the banks in the region stand to benefit from the recovery effort - even with Trustmark coming in.
"If six or seven new banks moved into the Gulf Coast it would be different," he said. "But I think there's plenty of business for all existing banks as well as Trustmark."
BancorpSouth also plans to increase its presence in the region, Mr. Wesson said, but would not get into specifics.
