Darryl Byrd Expands Banking Reach with MC Bank Acquisition

Darryl Byrd, the Louisiana banker celebrated for transforming Iberia Bank into a regional leader, has rounded up a team of former executives from the bank and secured a deal to purchase Morgan City’s MC Bank. This move is set to create a noticeable impact on the banking landscape in the Gulf South.

MC Bancshares, which oversees MC Bank & Trust Company, revealed the acquisition on Wednesday. However, the financial details of the agreement have not been made public.

MC Bank boasts around $480 million in assets, along with 10 branches in southern Louisiana. While it will maintain its name and headquarters in Morgan City, a majority of its leadership will operate out of New Orleans.

At 71, Byrd expressed a desire to quickly grow the bank by focusing on small business clients across the Gulf South and exploring further acquisition opportunities.

“We see a gap in the market for a relationship-oriented commercial bank,” Byrd noted. “At Iberia, we built a strong customer-centric culture, and I believe we can replicate that here.”

However, Byrd will be facing stiff competition from several established banks in South Louisiana, including national giants like JPMorgan Chase and Capital One, as well as local entities such as Hancock Whitney and First Horizon.

Details about the price have yet to be shared, but it’s tied to the bank’s estimated $80 million “tangible book value,” which reflects its hard assets minus any liabilities.

“We’re planning to offer a premium above that tangible book value, using a combination of cash and stock,” Byrd stated. He anticipates securing funding within the next roughly 100 days, pending regulatory approval to finalize the arrangement.

According to Byrd, the current shareholders of MC Bancshares will end up owning about 25% of the new entity, with other investors making up the remainder. He expects the transaction to be completed in the first quarter of the upcoming year.

Familiar Faces

This acquisition follows Iberia Bank’s purchase by First Horizon Bank more than five years ago, in a significant $3.9 billion transaction. Byrd is set to assume the roles of CEO and chairman for the new holding company of MC Bank. Other notable former Iberia executives joining the team include Mark Tipton as president, Michael Brown as COO, and Scott Price as CFO, alongside several others.

The existing board of MC Bank will remain intact, with CEO Chris Levato taking on the role of vice chairman and chief of staff within the executive committee.

While most leadership will be based in the New Orleans area, Tipton will work from Atlanta, and Price will be located in Birmingham, Alabama. Byrd remarked that once the non-compete agreement with First Horizon lapsed, he, along with Brown and Tipton, began contemplating the launch of another Southeastern bank.

“Retiring was a big mistake for me,” Byrd admitted. “I thought I’d find excitement in tennis, but it didn’t pan out. What I really missed was the thrill of being involved and building relationships as a CEO, and I believe I still have plenty of energy to contribute.”

Plans for Growth

Established in 1955 in Morgan City, MC Bank has gradually developed its reach, only recently entering the New Orleans market over the last decade, now boasting two branches in Jefferson Parish and another in Lakeview. The executives at MC Bank and its shareholders are optimistic that this recent deal will steer the bank toward a growth phase. Currently, MC Bank claims a modest share of the deposit market in Louisiana, ranked 50th among state banks, according to the Federal Deposit Insurance Corporation.

“The merger with DMMS Equity, combined with our talented team, will propel the bank forward,” remarked MC Bank CEO Levato in a statement about the acquisition.

Plans for new branch openings include a second location in Covington, its first in uptown New Orleans, and another in Houma. All existing MC Bank employees, about 100, have been invited to retain their roles, and all current branches will remain operational.

Continuing His Legacy

This acquisition of MC Bank embodies Byrd’s trend of expanding his banking influence, a strategy he has employed for the past 25 years. After taking the reins at Iberia Bank in 1999, he led numerous acquisitions, elevating the bank from a local staple to a multi-state financial player. Under his leadership, Iberia entered the New Orleans market by acquiring Omni Bank in 2011.

“When I joined Iberia, we were just about $1 billion in assets with 300 employees and a market cap of $80 million,” Byrd reflected. “We eventually grew to 3,500 employees spread throughout the southern markets.”

During this time, south Louisiana experienced the loss of several bank headquarters, including three in New Orleans. In 2005, Hibernia Bank was acquired by Capital One, and six years later, Hancock Bank absorbed Whitney Bank. First NBC Bank faced a shutdown by regulators in 2017.

With the new team in place, they find themselves in a “David and Goliath” scenario, leading a bank with less than $500 million in assets and about $380 million in deposits, especially when compared to Capital One, which holds nearly $9 billion in deposits in New Orleans alone.

Like other small banks, MC Bank now grapples with the increasing technology expenses associated with modern banking. They must invest in fraud prevention and adapt to customers’ expectations for mobile banking, 24/7 account access, and instant payments.

Investment banks, including Keefe, Bruyette & Woods, Stifel, and Performance Trust Capital Partners, are serving as co-advisors for the upcoming equity capital offering, which could reach up to $250 million. KBW is also advising on the overall transaction, and various legal advisors are involved in the merger proceedings.