LBA: Louisiana banks in comparatively good shape
While Louisiana bankers will soon be feeling the heat of new financial regulations, the state banking community is in better shape than much of the rest of the country, says Robert Taylor, CEO of the Louisiana Bankers Association. Louisiana banks have grown their assets by 10.4% from March 2009 to March 2010, while the rest of the U.S. banks have seen assets drop by 1.4%, according to FDIC calculations. Loan growth in the same period is up by 4.8%, while the rest of the country is in negative digits. Deposits grew by 12% as compared to 2.7% elsewhere in the U.S. What accounts for the comparative strength of Louisiana banks in handling the difficult financial environment?
Most Louisiana bank management teams were in the industry during the recession of the late 1980s and early 1990s, when interest rates shot up into the double-digits and credit was hard to come by. Based on their experience in those conditions, Louisiana bankers were more prepared to handle the current economic downturn and most did not engage in the lending practices that caused it. “We’re very blessed to have very strong balance sheets and income statements throughout the banking industry in Louisiana,” says Gary Littlefield, Baton Rouge market president of Gulf Coast Bank and Trust. “We’ve just never done crazy things.” A further boost to banks, says Taylor, has come from BP, which has poured revenue into the state as it worked to clean up the oil pouring into the Gulf of Mexico. While that source of income is winding down, it has been a boon to communities impacted by the oil spill. —Emma James