Our Financial State of Health

By Chaney Ferguson
The Times of SWLA




The Times of Southwest Louisiana sat down with two of our local financial instutions to discuss their take on the local economy and its affects on their operations.


CSE Federal Credit Union

What type of plan do you make with members who come in and they have just lost their job? What is the procedure of that plan?
The credit union motto is "People helping People." Life changing events can happen to anyone, at any time. We take the time to sit with our member, listen to their story and their problems, and then we go over what CSE can do to help- from consolidating debt to lowering monthly payments, or extending the loan to give them time to get back on their
feet. We try to work out problems, as long as our members are willing to help us help them.

Has your advice to members changed with the recession? How has it changed?
No, our advice to members has always been in the best interest of the member, whether we are in good times or bad. If we think the member should not borrow money because it might overload them, our advice is to not borrow the money. Credit unions have always promoted thrift, and in times of recession, thrift is the best defense.

Have you noticed people becoming more frugal?
Yes, our members' deposits into their share accounts have increased dramatically over the
last year or so, probably close to 17%. Lending is still brisk, with members financing and refinancing homes, building new homes, and buying new and used cars.

You mentioned saving is the number one principle, but what is the best way to save?
There are many ways for our members to save. We've seen a steadily increase in direct deposits and payroll deductions. It is the out of sight, out of mind philosophy- what you don't see, you don't spend. If a person can put aside $25 each pay period, $625 would be
accumulated in one year, and would earn interest on top of that. You would also be surprised at how many people, especially our younger members, save change and utilize our lobby coin counter machines to help them save.

Do you have tighter lending restrictions for 2009?
CSE experienced phenomenal loan growth in the past year and it hasn't really shown any
signs of slowing. One of the reasons for this is that CSE has not tightened its credit standards. As a matter of fact, right now, in this economy, our members need us more than ever. We have very sound underwriting standards and we have very loyal members.

Do you have less availability of cash for lending?
No, CSE has money to lend. Our member's interest is first when it comes to our lending
practices. CSE is well-capitalized and financially strong. We're owned by our members. We are a not-for-profit financial cooperative and our sole purpose is to serve our members. Our earnings are given back to our member-owners in the form of lower rates on loans, lower fees on services, and higher dividends on deposits.

What is your outlook on the economy of the area?
The economy in Southwest Louisiana is generally better than it is in other parts of the
country. Property value has actually increased instead of decreasing as in other areas. Unemployment is much lower here than it is around the rest of the country. It could be that the hurricanes we've had over the last four years are still having an effect, creating opportunities for growth and for new businesses to come into the area.



Jeff Davis Bank & Trust Company

How has your bank been affected by the economic climate?
a. We have seen growth in our deposits as people withdrew from the market at the end of 2008 and the beginning of 2009. They were seeking safer places to house their monies and conservative community banks, such as ours, are a good place to be.
b. Also, because of the housing crisis, the government will enforce new legislation upon financial institutions which will further complicate our operations.
c. The large number of bank failures across the country have put a strain on the Deposit Insurance Fund. This fund is at a low level and Banks will have to pay additional premiums this year to try to replenish the fund. The general public doesn't realize that their Bank actually pays for the insurance on their own deposits. And, like any other insurance, when there are many claims, rates must go up. Our premiums paid in 2009 will be 7 fold of those paid in 2008.

What is your position on lending in 2009 and how has it changed?
We did not participate in any of the high risk lending that caused the housing crisis, so we did not have the loss experience that those institutions did. Loan demand was down during the last quarter of 2008 and the first quarter of 2009 because people were not making as many major purchases or big decisions for their households. We began to see an increase in volume, though, once the Spring season arrived, which is a positive. We have always taken a conservative approach in making loan decisions and will continue to do that in the future.

Do you have less availability of cash for lending?
No, actually we have more. Because our deposit base has grown, we have plenty of cash available to lend.

Are you affected by the softer housing/business climate?
Home construction is slower at the present time than it was one year ago; however, we are still financing new construction. The businesses we serve are very healthy, for the most part. Because we did not have rapid growth and development in our area, we should not feel the pain that other areas of the country that did overbuild are having at this time.