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Covenant Bank created to fill service void

New trend? Former UP executives starting community bank

CLARKSDALE — It seems like only yesterday when a start-up bank in Mississippi was a relative rarity. However, with all of the recent merger and acquisition activity in the industry, an environment ripe for the birth of small banks has developed. The trend toward bigger, corporate banking has not only created for some an attractive-looking niche for the locally-owned and -operated community bank, but has also created frustration in a number of experienced bank executives who find corporate banking personally and/or professionally unfulfilling.

Willis Frazier and Freddie Britt are prime examples of long-time bank officers who have grown disgruntled with corporate banking and see the small bank as a viable competitor with its bigger rivals on the local level. That’s what led the pair to leave the very familiar confines of Union Planters Bank — with more than 30 years of combined tenure — to form Covenant Bank (in organization) in Clarksdale

“Willis and I were both trained in personal, one-on-one banking service,” Britt said. “That’s what we enjoy, that’s what we know.”

By the fall of 1999, Britt, a Cleveland native, had been with Union Planters, which is headquartered in Memphis about 80 miles north of Clarksdale, for 13 years and was senior lender and executive vice president over 19 banking locations in the Clarksdale district which stretches from the north Delta to east Alabama. And by that time his discontent had grown to the point that he finally picked up the phone and called Frazier.

Clarksdale native Frazier, the chief executive officer of the Clarksdale district who had been with Union Planters for 17 years, was sympathetic and receptive to the idea of starting a bank, though both said they were also sensitive to their responsibilities to Union Planters. After spending months talking, planning and seeking expert advice, Frazier and Britt decided starting a new bank in the north Delta was feasible. On Jan. 31, 2000, both men gave notice to Union Planters.

Covenant Bank (in organization) is in the process of applying for state charter with the Department of Banking and Consumer Finance. Frazier and Britt said they were hoping the state will begin reviewing Covenant’s application at its July meeting. Both said federal approval will probably take longer.

Britt characterized the charter process as “overwhelming. Thus, both men said that early assistance they received was key to the process. The men hired Baton Rouge-based American Planning Corporation and the law firm of Gerrish & McCreary for direction.

They also received assistance from the Bankers Bank in Atlanta. Banker’s Bank is one of about a dozen companies in the U.S. that offers products and services to start-up banks.

“Getting Bankers Bank on board was huge for us,” Frazier said. “Another bank, say Trustmark, could come up and offer to do our correspondent-type work with them. But they are competitors. Bankers Bank is not allowed by law to be in the banking business. So, they want to do business with us.”

The local investors are Joe Noe, Charles Neel White, Rives Neblett, Mike Chaffin, John McKee, Bowen Flowers, Shaw Johnson Jr., Andy Carr, Cliff Heaton and Hamp Bass IV, all of Coahoma County; Richard Melton, Ken Whittington, Dutch Parker, Nancy Parker, Brad Cobb, Jimmy Eubanks and Paul Battle, all of Tunica; and, Bert Robinson of Robinsonville. Together, they have made a non-binding commitment of more than $10 million to the start-up, more than double original goals and estimates.

Originally planned for September, with state and federal regulatory approval still pending Frazier and Britt, who will serve as chief executive officer and president, respectively, are now projecting October for opening. And the bank has already announced plans to open offices in Tunica and Robinsonville in November.

The Clarksdale office will be located in the downtown area in a former 24,000-square-foot department store. About 14,000 square feet have already been torn out making ready for renovations which were in the blueprint stage at interview time.

The Tunica office will be situated across from the courthouse, while the Robinsonville facility will be located on U.S. 61. Both will encompass more than 3,000 square feet, and all three construction projects are being executed by White Construction.

Britt said the Clarksdale office will employ 24 workers, and Tunica will have nine on its payroll. The Robinsonville facility will initially employ six, but Covenant has planned for growth in that market and has room for more positions.

Covenant will be a full-service bank. Being in the Delta, Britt and Frazier said they will be focused on agricultural loans. But they will also offer innovative products such as Internet banking which will include check imaging.

Contact MBJ staff writer Wally Northway at northway@msbusiness.com or (601) 364-1016.

About Wally Northway

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