Kyle Waters, Loan Evaluations co-owner, was quoted in New Orleans City Business in an article reporting the trend of declining community banks in the state. Scroll down for excerpts from the article, or subscribe to City Business for the entire post.
As the state continues to follow a national trend of community banks declining in number, local institutions are changing tactics to stay relevant amid their larger competitors.
There were 105 community banks in the state in March, according to the Louisiana Office of Financial Institutions. That’s four fewer than at the end of 2014 and 14 fewer than at the end of 2010.
The decline has been steady over the last five years because of a combination of normal competition, new federal regulations, tired executives and boards and the opportunity to trade up into stocks with more liquidity or cash out, according to industry analysts.
Even so, the state’s banks have continued to show improvements over the past five years.
The LOFI noted in a 2014 report that total loans and leases increased by 2.30 percent during the fourth quarter of 2014, from $42.75 billion to $43.73 billion – an increase of $984 million.
Total loans and leases have gone up in 15 of the past 20 quarters, according to the report.
Average assets have rebounded from three years ago, when banks were making below .80 percent return on average assets. As of 2014, they had a 1.00 percent return on average assets, slightly below the national average.
“Those ratios will tell you that Louisiana banks and thrifts are healthy and continue to improve,” said Kyle Waters, owner of Loan Evaluation Services LLC.
Still, community banks are eyeing expenses closely now that they must meet strict federal regulations enacted in recent years.
Click here to read the article on City Business (for subscribers only)
Click here to read/download full article as a pdf