C.R. "Rusty" Cloutier founded MidSouth Bank during the gloomiest days of the mid-80's oilfield bust and grew the bank into a publicly traded, $1.9 billion company. But the 70-year-old Cloutier couldn't ride out oil's latest downturn and was terminated Thursday as president and CEO of Lafayette-based MidSouth Bancorp.
The company also terminated Cloutier's son, Troy Cloutier, as president and CEO of subsidiary MidSouth Bank.
The parent company said the decision by the board of directors is part of a transition plan to improve performance.
Chief Financial Officer Jim McLemore has been appointed interim president and CEO for both the holding company and bank.
A note issued Thursday by Stephens Inc. analyst Matt Olney said the news could result in a strategy shift that might include a new stock issue or a potential sale of MidSouth Bancorp.
MidSouth's stock jumped 8 percent Thursday to $15.65.
MidSouth Bancorp share prices have suffered since oil prices plummeted more than two years ago. Investors were put off by a loan portfolio where energy loans accounted for more than 20 percent of the total.
MidSouth shares fell from a peak of more than $20 in 2014 to less than $7 in early 2016. But in recent months, the stock has been trading at more than $14, and the company's energy loans now account for a little over 15 percent of total loans.
Still, MidSouth reported Thursday that its first-quarter profit slipped to $1.7 million, or 15 cents per share, from $1.9 million, or 17 cents per share, a year ago. In 2016, MidSouth's earnings plunged more than 35 percent to $6.6 million, or 58 cents per share.
McLemore has more than 30 years of banking industry experience, including eight years with MidSouth as senior executive vice president and chief financial officer. He will continue as CFO.
As part of its transition plan, MidSouth recently hired two executives with experience from larger financial institutions. Erin DeWitt joined MidSouth as chief risk officer, a position she held for two years with Scottrade Financial Services. In the preceding seven years, she worked at Capital One in various risk roles. Kade Peterson was hired as chief information officer, after three years as executive vice president – chief operating officer of USAmeriBank in Tampa, Florida. Prior to that he was executive vice president of operations and technology executive for Sterling Bank in Spokane, Washington.
MidSouth Senior Vice President Lorraine Miller said the announcement of the leadership change would be the company's only comment.
Cloutier said he could not comment on what led to his termination, although he thinks his age played a part. "I don't want to put words in anybody's mouth," he said.
Cloutier said he doesn't know what his next move will be, but it won't be to start another bank. He's bound by a 3½-year noncompete agreement, and he's also 70.
"It's been a great run. I've enjoyed it a lot," he said. "The major thing I want to do is thank everybody who's been so good to me and spend the rest of my life trying to repay them."
Under Cloutier, MidSouth grew from "the hut," a 3,000-square-foot building on Pinhook Road that had neither teller windows nor a drive-through, to a $1.9 billion bank with 57 branches in Louisiana and Texas. He has been a staunch supporter of community banks and following the financial crisis of 2008, a frequent critic of the half-dozen banks considered "too big to fail." Those banks control the bulk of the nation's assets, and Cloutier testified before Congress that excessive financial concentration played a big part in the financial markets' meltdown.
He even wrote a book about it: "Big Bad Banks: How Greed and Ego Among the Big Shots in Banking and Government Created the Crisis That Wrecked Our Economy".
Cloutier owns 403,665 shares of MidSouth stock, or 3.54 percent of the total, according to Securities and Exchange Commission records. His contract with the company calls for him to be paid $1.3 million if terminated without cause and $1.2 million if terminated with cause.
Cloutier was the founding president and CEO of MidSouth Bank, with his son moving up the ranks as part of a succession plan. Troy Cloutier was named CEO of MidSouth Bank in August after having served about a year as president, while his father retained the title of president and CEO of parent MidSouth Bancorp.
Troy Cloutier previously held the position of chief banking officer and senior executive vice president since January 2011 and before that was regional president for more than eight years.