Interview with Clyde White, president of Louisiana Bankers Association

Clyde White took his first banking job in 1969 with Louisiana National Bank in Baton Rouge. Ten years later, he returned to his hometown of Monroe to become executive vice president of Louisiana Bank of Ouachita Parish.

White was named president and CEO in 1981 and served in that capacity

until the bank was sold in 1995 to Deposit Guaranty Corp. of Jackson, Miss. After a brief period as Deposit Guaranty's city president for Monroe, White left to start working on the charter for Ouachita Independent Bank. Eager to reintroduce a locally owned bank to the Monroe market, White's bank received its charter in 1997.

When we opened, we were the first (in-state) bank to seek a charter in the state of Louisiana in the previous 11 years, he said.

Entering its eighth year in operation, Ouachita Independent Bank reported assets of more than $246 million at the end of 2004.

Recognizing White's drive and vision, the Louisiana Bankers Association named him president for 2005-2006 at its May 6 convention in New Orleans. He succeeds Guy Williams, CEO and president of Gulf Coast Bank and Trust in New Orleans.

What's your diagnosis for the health of the banking industry in Louisiana? Are there any risks it faces or factors that could bolster it?

As an industry we're in very good shape. We hear our state banking regulator (John Ducrest, commissioner, Louisiana Office of Financial Institutions) talk all the time that we have very strongly rated banks. Most are making good money and that's tracking national trends. Banking profitability is good nationally; it's good in Louisiana, too.

Louisiana is still not a hot market like you see in Florida, Georgia or Texas, where you see banks clamoring to get in those markets. That's just not happening much in Louisiana. And until our economic and financial situation gets a little better in Louisiana, I don't think you're going to see a whole lot of that.

With Capital One's takeover of Hibernia, Louisiana will be left with only two home-based banks - Whitney Bank and IberiaBank - with assets in excess of $1 billion. Do you see other banks in the state reaching that scale or will we continue to see the out-of-state acquisition trend continue?

You're going to see organic growth (from in-state banks). You might see community banks continue to look for ways to do things cooperatively in, if not in a merger, something short of a merger. There might be some affiliations among community banks. You'll continue to see that where the synergies exist and the personalities are right.

Size does help. It helps you become more efficient but it's a double-edged sword. Growth tends to lead to a less personalized level of service. That's what's driven the community banking market. We can be just a little more nimble than the bigger banks.

Do you expect the federal interest rate to continue its quarter- point climb through 2005, and how do you expect Louisiana banks to react?

There's even been some talk that they'll move a little more aggressively with increases in half-point increments. Even though the numbers don't seem to indicate you have inflation concerns, I think (Federal Reserve Chairman Alan) Greenspan is absolutely certain he doesn't want that to happen on his watch.

Every prognosis I see calls for incremental increases in interest rates, and I think most banks will continue to move with that. It should help our margins a little bit. Most banks are now what we call asset sensitive, where they have more of their assets repricing over, say, the next year timeframe. That would enable them, if they have floating rate loans, to broaden their margins a little bit.

What part can the banking community take in Louisiana's economic development efforts?

It's a huge role. Most of our banks ... we feel like we are the primary source for small- to medium-sized businesses. They're going to come to us. They're going to feel more comfortable with us. This is not any indictment against the big banks, but in smaller communities the community bank has got to be the lifeblood.

Most of us are looking for good loan opportunities. Most of us got smarter during the tough times, the late '80s and early '90s, and we underwrite and price our loans a lot better.