Independent Banker - January 2021 - 53

WHERE SHOULD
YOU LIST?
EXCHANGES
VS. OTC
" THERE ARE GREAT COMPANIES
THAT ARE PRIVATE, JUST LIKE THERE
ARE GREAT COMPANIES THAT ARE
PUBLIC. YOU HAVE TO EVALUATE
WHAT YOUR GOALS ARE
AND WHAT YOUR LONGTERM
VISION IS FOR
YOUR COMPANY. "
-Drake Mills, Origin Bank
obtaining a public valuation is the next
logical step in their growth, " she adds.
THE COMMUNITY
BANK EXPERIENCE
Origin Bancorp Inc., the holding
company of Origin Bank in Choudrant,
La., went public in 2018. Drake Mills,
chairman, president and CEO of the
$7 billion-asset community bank, says
its IPO was its next stage of evolution.
" Certainly, there are great companies
that are private, just like there are
great companies that are public, " he
says. " You have to evaluate what your
goals are and what your long-term
vision is for your company. "
Mills says the move afforded Origin
Bank the freedom to grow the way it
wanted to. " For us, it came down to
wanting to be able to raise capital to
fund our desired growth by accessing
the public markets, " he says. " We
believe this allows us to continue to
chart our own path and expand our
brand and our way of doing business
in a more dynamic way. The longterm
value that can be provided as a
public company is very beneficial to
Origin Bank and our shareholders. "
Not far away, in Baton Rouge,
La., $3.9 billion-asset b1Bank did
a direct listing in 2018, followed by
a follow-on offering a few months
later. " First, going public gave
us access to public markets for
acquisition purposes, " says president
and CEO Jude Melville. " It has also
been a recruitment tool to help spur
organic growth, and it allowed us to
provide liquidity for shareholders
who had given 10 to 15 years of
support to our company. "
Melville acknowledges that while
the timing for a community bank IPO
might not be ideal right now, a bank's
path forward should be determined
by its own long-term opportunities
and context, not by trying to time the
market. " The decision to go public
should not be an 'end of the journey'
kind of decision, " he says, " no
matter what the market or current
economic scenario. "
Don Sadler is a writer in Georgia.
One of the most important
decisions community banks
must make when going public
is where they will be listed. The
main options include major
exchanges like the New York
Stock Exchange and Nasdaq
Composite Index, and over-thecounter
(OTC) markets like the
OTCQX Market.
The OTC Markets Group
launched the latter in 2015
to provide community banks
with an alternative to the high
cost and complexity of listing
on an exchange. It claims to
offer a less complex and more
cost-efficient path to going
public for community banks
that's referred to as a " Slow PO. "
Using this process, community
banks can enter the public
markets by making previously
restricted shares available
for public trading by brokers
on the OTCQX, OTCQB and
Pink markets.
According to Laura Hamilton,
vice president of OTC Markets
Group, the Slow PO is akin to
a direct listing on an exchange
where a company goes public
without raising money and
without underwriting as in a
traditional IPO. " The longer
on-ramp allows seasoned
companies with an established
investor base to avoid the high
costs and time pressures of a
traditional IPO while growing
their liquidity organically over
time, " she adds.
To date, Hamilton says, 150plus
community banks with
assets ranging from $100 million
to more than $4 billion have
joined the OTCQX Market.
Independent Banker - January 2021

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