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Bank has 1,100 local shareholders in Jones, Forrest, Lamar and Pearl River counties

CEO thinks The First has ‘more of an entrepreneurial spirit’

HATTIESBURG — At a time when community banks are disappearing, a new one has formed in South Mississippi.

In January, the First National Bank of South Mississippi and First National Bank of the Pine Belt consolidated under one holding company to become The First. There are 1,100 local shareholders in Jones, Forrest, Lamar and Pearl River counties, according to David Johnson, chairman and CEO.

“We feel we have more of an entrepreneurial spirit,” he said. “We are dealing a lot with the owners. That makes us more responsive.”

This bank, as The First National, raised more than $13 million and opened its doors in 1996 in Oak Grove in Lamar County. Now as The First, they have six offices in Hattiesburg, Laurel, Picayune and Purvis and have 78 full-time employees.

“We’ve had a lot of success and have $180 million in assets after only seven-and-a-half years,” Johnson said. “Our approximate ranking is in the top 35 banks in the state in assets. We were the smallest when we started in 1996, and we’re competing with banks that can trace their charters to 100 years.”

He says The First has a focus and expertise in commercial, real estate and mortgage lending, a niché they feel they can fill. To that end, talented people in those fields were recruited, he said.

“This is a people business and we want people with those skills,” he added. “We are customer oriented.”

Johnson, 50, has been in banking since 1977 with the last 20 years in Hattiesburg. He feels that banks are becoming more segmented and the Hattiesburg banking environment is extremely competitive with good competitors. He is optimistic about the area’s thriving economy, saying it didn’t feel the pinch felt in other places.

“We have good unemployment rates — Lamar and Jones counties have under 3% — and national retailers continue to look at us,” he said. “The housing market is good, rates are still low and I don’t see it slowing down.”

Johnson, a Laurel native and graduate of Mississippi State University, says The First is “absolutely a community bank,” defined as a bank serving a geographic area and with less than $1 billion in assets. Nationally, the number of community banks has fallen by about one-third. In 1980 there were 12,400 banks classified as community banks. That fell to 7,000 in 2002 and is projected to be less than 5,000 by the year 2007.

“It’s not that those community banks were unprofitable,” he said. “Some were bought by larger banks and some grew and outgrew the category.”

He says the trend toward mega-banks is a concern to some in banking circles. All banks contribute to the Federal Deposit Insurance Corporation (FDIC) to protect customers’ deposits, and the big banks now represent approximately 10% of national banking deposits. Some in the industry want to change the laws.

“It’s inevitable that banks will get up to a large size as they grow, but I think consolidation will slow and new banks will form even though it’s expensive to start new banks,” Johnson said.

He believes smaller banks are more in tune with local communities, have more banking experience in those communities and enjoy more stability among employees who live there.

One way The First is serving the needs of the community is through the Soldiers and Sailors Relief Act, which allows banks to assist military personnel actively deployed.

“We’re proactive in that. If we know one of our customers is affected, we’ll approach them and offer to help,” Johnson said. “We can offer the restructure of debt and the modification of interest rates and payments.”

The First’s CEO says he’s in Hattiesburg for life and looking for the bank to do well in the community.

“I tell people it’s compared to a track meet,” he said. “It’s not a 100-yard dash, it’s a marathon.”

Contact MBJ contributing Lynn Lofton at mbj@msbusiness.com.


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