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A Mississippi Business Journal Q&A

New MBA president optimistic about industry changes

PHILADELPHIA — At the May 19 business session of the Mississippi Bankers Association’s annual convention, Steve Webb, president, CEO and chairman of the board of The Citizens Bank in Philadelphia, was elected to lead the MBA executive committee, which governs the 112-year old trade association.

MBA’s membership includes 109 commercial banks and savings institutions through Mississippi. Webb succeeds W. Page Ogden of Natchez, president and CEO of Britton & Koontz First National Bank of Natchez.

A graduate of Louisiana State University, Webb was named Citizen of the Year in 2000 by the Philadelphia-Neshoba County Chamber of Commerce, of which he is a former president. He is current president of the Neshoba County Industrial Board, past president of the Mississippi Forestry Association and former president of the Meridian Jaycees.

Webb took time to chat with the Mississippi Business Journal about industry changes resulting from the Gramm-Leach-Bliley Act, the possibility of banks getting into real estate brokerage, the state’s new collateral guaranty pool and how banks are luring investors back.

Mississippi Business Journal: What reforms in the Gramm-Leach-Bliley Act do you most see benefiting Mississippi’s businesses?

Steve Webb: The opportunity to fully compete in insurance, securities and real estate sales will allow Mississippi banks to expand and prosper. And these opportunities will help consumers, too. Banks face growing competition for traditional banking services from insurance, securities and real estate businesses already. Allowing banks to compete will benefit the consumer as well as banks.

MBJ: What is the outlook for the Mississippi banking industry and are we losing too much local control of our institutions?

SW: The outlook for banking in Mississippi is really good, in my opinion. While merger activity has continued and some local banks continue to be acquired by larger banks, competition continues to determine who is successful in a given market. In some instances, larger banks have done very well. In others, the locally based banks are doing better. In a number of communities, we have seen new charters formed. In the past four years, we have had probably 10 new charters in Mississippi, and most of them are doing well. This demonstrates the strength of the banking business in Mississippi and it attests to the success community banks enjoy in Mississippi.

MBJ: As president of the MBA, how do you feel about the proposals allowing banks to become more involved in real estate sales and how would it change the real estate landscape in Mississippi?

SW: Real estate authority is an important part of the financial modernization law. I don’t think many Mississippi banks are looking to get into real estate sales right away, but the new law sets in place a mechanism for banks to do this. Banks have the resources and expertise to compete in real estate. At the local level in particular, consumers would benefit from the competition generated by banks’ entry into the real estate business.

MBJ: With all the new services banks are allowed to offer, is there a concern that bank resources will be spread too thin?

SW: Most banking experts agree that banks’ entry into new lines of business will be healthy for the industry. Bankers have shown that they are conservative in their management of their institutions, and they are deliberate in approaching new ventures. Regulators keep banks’ safety and soundness as top priority. However, banks have the resources to expand into these areas and remain sound while making a profit and providing great benefits to the consumers. These new activities will allow banks to compete in a diversified financial services environment and provide the local support that is important to our communities.

MBJ: How will the new Mississippi Collateral Guaranty Pool benefit Mississippi’s banks and government entities?

SW: The centralized collateral system for securing state and local public deposits is one of the most significant pieces of state legislation in recent years. The new system creates efficiencies that will streamline the system of public deposits for both the governmental entities and the banks. Our bank has customers in seven counties, and we probably have 25 or 30 governmental depositors from time to time. This will allow us to secure these deposits through the state treasurer’s office. And it will allow the public entities to deal with one office and be assured that they are secured. The guaranty pool affords banks the opportunity to free up funds for more lending and the deposits in the pool will be fully secured by the collateral of all banks in the pool. The new system is very progressive, and it will benefit all concerned.

MBJ: With the funding pressures on banks, because investors funds have been lured out of the banks over the last 15 years, where do Mississippi’s banks stand and what can be done to lure investors back?

SW: Funding is a big issue for banks. Nationally, I think over half of banks’ investable funds come from non-deposit sources. In Mississippi, over 25% comes from these other sources. Banks are having to look for other sources of funding. Banks have been successful in doing this, but we are going to have to improve our products and services. While our traditional deposit products cannot compete with more speculative products, the new laws allowing us to offer new products and services will allow us to compete more effectively and remain viable as a source of loans and economic activity in our state and in our communities. I feel really good about the opportunity banks have to do this.

Contact MBJ contributing writer Lynne Wilbanks Jeter at lwjeter@yahoo.com or (601) 853-3967.


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