Magazine article American Banker

Hibernia of la. Makes Deal to Leap into Texas Top 15

Magazine article American Banker

Hibernia of la. Makes Deal to Leap into Texas Top 15

Article excerpt

After eight years of slow, steady growth in Texas, Hibernia Corp. of New Orleans has struck a deal that would double its deposits and branch network there.

The $17.6 billion-asset company said Monday that it would buy the $2.6 billion-asset Coastal Bancorp Inc. of Houston for $230 million in cash.

The acquisition would catapult it into the top 15 in the state's deposit-share rankings, up from 26th, and jump its Texas branch total to 86, from 42. More importantly, it would give Hibernia -- which has concentrated its Texas operations on the counties bordering Louisiana -- a foothold in the state's largest metropolitan market.

Chief executive officer Herb Boydstun said in an interview Tuesday that the purchase would give Hibernia a platform to grow in the Rio Grande Valley and Austin markets. It has a goal of having 25% of its deposits in Texas, and Coastal would put it at 22%.

"Coastal is a very nice fit for what we want to do," Mr. Boydstun said.

Manuel Mehos, the CEO at Coastal, said it had not been looking to sell but accepted the offer because it was having a hard time making the transition from a traditional thrift to a more bank-like company.

Its third-quarter earnings were down 25% from a year earlier, and loans were nearly unchanged, at $2 billion. Last year it sold off five branches to improve efficiency.

"It takes a lot of resources to build a franchise, and limited capital makes it difficult to grow," Mr. Mehos said. "We felt like this was a good chance for customers and employees to match up with a bank that will help them grow."

Coastal, founded through the merger of several failed thrifts in the 1980s, still has about 73% of its loans in residential real estate. Hibernia's portfolio, on the other hand, is 42% residential real estate, 12% commercial real estate, and 18% commercial and industrial loans. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.