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Hancock Whitney, a regional bank based in Gulfport, Mississippi, with deep roots linked to Whitney bank in Louisiana, was the most prolific payroll program lender in the state, underwriting more than 7,200 loans out of the 73,800 total approved statewide as of June 30.

Homegrown lenders across Louisiana approved many of the $7.3 billion in loans businesses received through the federal Paycheck Protection Program, something that would typically be out of reach for community or even regional banks and credit unions.

More than 250 lenders approved loans in Louisiana, ranging from some with one loan to ones that approved thousands of loans. 

It was a shot in the arm, but as far as how customers are doing now, two bankers said the optimism has petered out as the state has stalled its reopening plans to protect public health.

Hancock Whitney, a regional bank based in Gulfport, Mississippi, with deep roots linked to Whitney bank in Louisiana, was the most prolific lender for the federal program in the state, underwriting more than 7,200 loans out of the 73,800 total approved statewide as of June 30.

Inside that figure, Hancock Whitney approved about 1,600 loans above $150,000 and 5,600 smaller than that amount, according to records released this month by the U.S. Small Business Administration.

Hancock Whitney outpaced Capital One and JP Morgan Chase, which have larger market share in Louisiana. Hancock Whitney had about 12.6% of the Louisiana market when ranked by deposits as of June 2019, according to Federal Deposit Insurance Corp. records. By comparison, Capital One had 16.9% of the market and JP Morgan Chase had 16.4% of deposits in Louisiana — figures that include both consumer and business accounts. 

Capital One approved about 2,000 loans smaller than $150,000 in Louisiana and 160 larger loans, records show. Many business customers of Capital One posted on social media about lack of responses and delays when inquiring about the program during the height of the influx. JP Morgan Chase approved nearly 4,000 loans smaller than $150,000 in the state and 857 loans above that threshold. 

Hancock Whitney said it had hundreds of workers taking overnight shifts to upload documents for loans during the peak demand for the federal program after it became available in April.

The experience was meaningful for many, said Chip Knight, chief banking officer at Hancock Whitney. 

"We've had applicants cry upon being approved. They needed money that day to stay in business the next day," Knight said. "We have restaurants and hospitality clients, especially in New Orleans, where the business is very slow."

The program was a centerpiece of a $2.3 trillion rescue bill for individuals and businesses. The program, launched in early April, set off a frenzied response from millions of desperate small companies seeking a loan.

The first $350 billion in federal funding ran out in just two weeks before being replenished with another $310 billion. Congress agreed to forgive the loans if they are mostly spent paying workers, but the money also can be used for rent, mortgage payments and utilities. As of July 21, about $132 billion remained available in the Paycheck Protection Program.

The vast majority of applicants at Hancock Whitney were existing bank customers, but there were new customers as well who moved over deposits, Knight said. The bank had a "slow start" at first but picked up the pace. Now it has more than 12,000 total loans stemming from the program, most of which are in Louisiana. 

"We were able to leverage technology and power through it," Knight said. "Before we used the technology, the majority of our loans were submitted to the SBA between 10 o'clock at night and 6 o'clock in the morning because there was so much traffic on the network; it was very slow. So we had hundreds of people work all night long to get the SBA approvals for the loans."

With funds still available, demand in recent weeks has been significantly lower as has the average loan size — closer to $25,000 for sole proprietorships and 1099 workers — rather than $150,000 per loan early on for businesses, Knight said.

A best-case scenario for businesses would be another round of loans because much of the money has already been spent by businesses to stay afloat through the prolonged pandemic, he said. 

Like Hancock Whitney, community bankers worked feverishly to approve loans before the money ran out the first time. 

For Jude Melville, CEO of b1Bank in Baton Rouge, the loan program was a unique chance for bankers to regain some trust from the public during an economically unstable time. 

"We just decided that as bankers, we needed to play the role as economic first responders," Melville said. "Ever since the last financial crisis, bankers have been laboring under a stigma," he said. "A lot of our folks didn't sleep much, but they all felt proud of it," he said of the effort to get Paycheck Protection Program loans in the hands of business owners.

B1Bank was among the smaller banks underwriting a substantial number of loans, about $400 million worth, despite its size and market share at No. 7 in the state when ranked by deposits in 2019. Since then, it completed an acquisition and would be No. 6 in Louisiana with about $3.3 billion in deposits.

The bank, which has mostly commercial customers, approved about 2,800 loans. About 500 of them were for $150,000 or more, while the majority was for less than $150,000. The bank "put a lot of resources" toward the forgivable loan program and moved forward on applications even before many lingering questions about the program were answered. 

"We're still getting a handful (of loan applications) a day," Melville said. "We did prioritize existing customers, but we were able to add new clients as well. We did establish some new relationships."

Melville said the loans gave a boost to businesses, but optimism has faded with the state's reopening stalling to protect public health. 

Robert Taylor, head of the Louisiana Bankers Association, surveyed members about the federal program in recent weeks, but that was done before the second spike in coronavirus cases across the state and mandated closures of bars that don't serve food. 

"It is too soon to give a final assessment on PPP," Taylor said.

About 95% of bankers felt like the loans helped businesses survive until they were able to legally resume operations. Asked whether businesses may need more help, the majority of survey respondents suggested businesses did not need another round at the time. 

About 73% of bankers said they found new customers through the loan process. 

"That tells me that most banks reached outside of their customer base and sought to help small businesses in their market get the capital needed," Taylor said. 

Gulf Coast Bank in New Orleans also approved many more loans than its market share would suggest. It approved 2,100 loans under $150,000 and another 406 loans above $150,000, records show. When ranked by market share, Gulf Coast Bank only had $1.5 billion in deposits as of June 2019 and sat at No. 11 in the state.

The bank created a web portal early on in the process and closed many loans electronically. 

"Most of the customers we got were through the internet. We set up a link and application online as soon as we could," said Bruce Falkenstein, chief lending officer at Gulf Coast Bank. "It was all hands on deck on 24-hour shifts."

The pace has since slowed.

"We're getting about one or two a day but nowhere near the pace we were," Falkenstein said. "It's a trickle."

Now that the economy has hit with another spike in cases, some customers are calling back.

"Up until about three weeks ago, people were pretty optimistic, but they've got to get through this next (coronavirus) wave," he said. "If you're a music venue or a bar, you have no revenue."

So far, there have been some loan deferrals and it hasn't been as catastrophic as the banker expected. However, the future is unclear.

"We really don't know how deep this is going to be. It's sort of like pot holes in the streets of New Orleans; whether it's a small one or a big one, you won't know until you hit it," he said. 

Other banks with major footprints in Louisiana underwrote loans as well.

Lafayette-based IberiaBank, before it combined with Tennessee bank First Horizon, approved more than 4,300 loans under $150,000. IberiaBank also originated 796 loans above $150,000, records show. Before the deal to combine these banks, IberiaBank had about 8.43% of the Louisiana market when ranked by deposits, or No. 4 in the state. Since the data was released, the combined banks have approved 5,325 loans about 85% of which were for less than $150,000 as of July 21 in Louisiana. 

Alabama-headquartered Regions Bank, with about 7% of market share in Louisiana, approved 2,440 smaller loans and 324 larger loans. 

Ruston-based Origin Bank, which had only 1.7% market share when ranked by deposits, approved more than 1,200 loans under $150,000 and 219 of the larger loans. 

Alexandria-based Red River Bank approved 1,111 smaller loans and 259 larger loans but had only 1.5% of the market in Louisiana. 

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Email Kristen Mosbrucker at kmosbrucker@theadvocate.com.