What’s ahead for the banking industry?

Business is only as strong as its leadership. Being subject to the influences of manmade and natural disasters presents a sampling of challenges that impact the leaders of financial institutions and the businesses they support. Select regional bankers offer their views on the status of Tri-parish banking and what might be expected during the remainder of this year.

According to the State of Louisiana Office of Financial Institutions, the year 2010 saw a slight increase in total assets for all Louisiana-domiciled banks and thrifts, which totaled more than $62 billion. It was almost a 9 percent boost from the same time one year earlier.

Total assets crept up slightly by 8 percent during the fourth quarter of 2010 for Louisiana state-chartered banks and thrifts.

Overall, total deposits increased while borrowed money declined. Louisiana-domiciled banks and thrifts continue to compare favorably in a number of categories when compared to all banks and thrifts in the U.S.

Regional financiers anticipate increased improvement, making conditions good for business.

CEO Mark Folse Coastal Commerce Bank

“I think the single biggest challenge we face as a community bank is from the federal government. Their reaction, and maybe overreaction, to the financial market collapse in late 2008, has spawned all kinds of legislation that in theory is designed to fix some issues. [However], regulations on banks like ours, and other local banks, that had nothing to do with the collapse in the first place, is going to make the cost of doing business go up. It’s really a challenge.

“What we saw after the [BP Deepwater Horizon] oil spill and [offshore drilling] moratorium was people sitting on their hands and waiting to see what was going to happen. Not wanting to make investments.

“It has picked up in the last 60 to 90 days and we’ve seen a pretty noticeable increase in activity. I think there is a lot of optimism for the second half of the year. I guess the threat of inflation is always there, but we are not there yet.”

CEO Rusty Cloutier MidSouth Bank

“I think banking in our area is very solid. The mood is very good. People seem optimistic about where we stand. Things are a lot better overall in America in the banking sector.

“With [pending floods from the Atchafalaya River and area bayous] there will be some people affected. If you are outside the levees there will be customers impacted, I think it is going to be a bad event. We will have to wait and see. I’m concerned, but I think we will get through it.”

CFO Mickey Thomas South Louisiana Bank

“In Louisiana, banking, with some modest exceptions, is in good condition. Of course, our economy here has been better than in other parts of the nation. Louisiana banks have done a lot better than some states.

“I like to think that some of our bankers here are much better prepared for economic weakness. Hopefully, we are seeing some light at the end of the tunnel and we’re seeing some people go back to work.

“Our country is in dire need of domestic production of oil and gas, and that is the economic lifeblood of this area. We’ve seen some permits released for deepwater drilling, and I think it is going to be good for us.”

CEO Jerry Ledet Synergy Bank

“The state of banking in our region continues to be strong. While our economy suffered as the result of the disaster in the Gulf last year, banks remain sound and have worked with customers during the downturn. Despite that slowdown, our overall region has fared well compared to other parts of the country.

“The biggest hurdle to the banking industry is the increased governmental regulations placed on it including legislation like the Dodd-Frank Wall Street Reform and Consumer Protection Act. While some components are positive, several provisions will only increase the burden on banks, which are already one of the most regulated industries in the country.

“Those provisions are in direct conflict, for the community banks in particular, with efforts to continue to provide the products and services that our customers want and that our community needs for robust and sustained economic growth and prosperity.”