Investments illustrate health, diversity of local banking environment

Looking at the Shreveport-Bossier area, bankers big and small each see something different.

But as far as the market's opportunities go, they all like what they see.

To Harold W. Turner, president of Red River Bank's Shreveport-Bossier branch, which opened Monday, Shreveport is a large market that is ideal for a community bank. But to John Peak, Chase Bank's commercial market manager for northern Louisiana, Shreveport is a midsize market with a growing retail sector ripe for lending capital.

Either way, the picture ultimately shows more options for individual and commercial customers, according to Susan Beal, director of the LSUS Center for Business and Economic Research.

"Any place you have business and commercial customers, you have a viable banking environment, and that's what you have here," she said.

The Shreveport-Bossier banking picture resembles the economy: gradually diversifying and showing slow and steady growth.

Larger banks in the Shreveport area have been merging. While many of them see the opportunities for more business lending, they also see more residents hungry for the many services they can offer that smaller banks cannot.

Alternatively, smaller banks are coming to the area because they see opportunities among residents wary of larger, impersonal business entities.

Simultaneously, those smaller, community banks already here are expanding into growing areas in southern Shreveport and northern Bossier City. They hope to reach new homeowners as they follow the new rooftops and retail.

Mergers

Since July 1, 2004, Chase Bank has merged with Bank One, Capital One merged with Hibernia and Regions Bank announced it will merge with AmSouth Bank. In the cases of Chase and Capital One, respective representatives have said no branches closed and no jobs were lost.

For the Regions-AmSouth merger, spokesman David Webster said there probably will be job reductions in some areas companywide. But he said it's too soon to say what city or what positions would be involved.

He added that any losses would likely be tantamount to normal attrition.

According to Chase's Peak, larger banks merge to reduce overhead costs and be more efficient operators. The challenge for those banks is to offer great service and value to customers, and to do it efficiently to provide solid returns to shareholders, he added.

But in addition to gaining customers, larger banks such as Chase and its $1.2 trillion in assets have more resources to help businesses in Shreveport, Peak said.

Local bank expansion

At Bossier City-based Citizens National Bank, growth, demographics and opportunity drive each decision to open a new branch, Executive Vice President Glenn Jackson said. Citizens recently opened branches on Ellerbe Road in Shreveport and Stockwell Road in Bossier City, and it's also looking near Airline Drive for yet another.

Jackson referred to recent Shreveport branch openings from banks headquartered around the state as a reason for his optimism, including Monroe-based Ouachita Independent Bank, Lafayette-based Iberia Bank and Alexandria-based Red River Bank.

"All points point to northwest Louisiana for banking growth," Jackson said. "Growth potential is here; they wouldn't be coming here if they thought it was a stagnant economy."

The Shreveport 'region'

BusinessFirst Bank and Red River Bank are two smaller banks opening branches this summer that define their markets beyond Shreveport-Bossier's city limits. To both, the Shreveport-Bossier "region" denotes an area that includes all possible individual and commercial customers in northwest Louisiana.

Former Gov. Buddy Roemer, a Bossier Parish native, is entering the market on the business banking side. Jude Melville is president of the northwest Louisiana area for Roemer's venture, BusinessFirst Bank, which specializes in business lending services. Melville said BusinessFirst wants to establish multiple banking centers around the state.

"We want to link businesses, professionals and entrepreneurs from across the state," Melville said. "Shreveport is seen as the northern link of that effort."

He also said the many bank mergers and acquisitions represent a good opportunity for BusinessFirst to be able to attract top talent and serve clients in a time of uncertainty.

Turner, at Red River Bank, argued that Shreveport-Bossier cannot be separated from the region where banking is concerned. As banks continue to consolidate, he said, they're going to concentrate on larger markets and leave a gap for community banks such as Red River to come in and fill.

"We think the future of banking in a market like Shreveport's," he said, "is with community banks."

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.