Banks touting stability in wake of current industry hiccups

by Lynn Lofton

Published: August 11,2008

With the mortgage meltdown, government takeovers and failures of banks, there are some disturbing events happening with banks on the national scene. How are banks in Mississippi responding?

Banks are being hit with less than desirable public relations similar to what accountants experienced a few years ago, says Dr. John M. Clark, associate professor of finance at the University of Southern Mississippi (USM).

“While the PR problems are similar in that they were ultimately caused by greed, the nexus of these stories is different,” he said. “The PR scandal for accountants arose from a failure to recognize conflicts of interest in a number of their client relationships, particularly as they pertained to the auditing function. In the case of banks, much of the PR mess was created by banks failing to have legitimate risk management plans.”

‘Creating a drain’

“In many markets, when the housing market turned downward, a number of loans failed at the same time, creating a drain on bank capital,” Clark said. “Ultimately, banks will have to change their practices and tighten lending standards and probably look toward holding loans with lower loan-to-value ratios in their portfolios.”

He says there’s not much banks can do to offset any negative perception other than continuing to maintain consumer confidence in their operations. “This means that banks must continuously work toward improving their balance sheets and strengthening their overall financial condition,” he added.

Hancock Bank is sticking with its century-old story of financial services leadership deeply rooted in the Gulf Coast region, according to Paul Maxwell, vice president and corporate communications manager. He believes the company’s record of being one of the country’s most financially stable institutions for 75 consecutive quarters sets Hancock apart.

“Although Hancock Bank was founded to help local communities manage prosperity, Hancock has helped customers weather literal and figurative storms since 1899,” he said. “In fact, strength and stability are critical components of our corporate values. In these uncertain times, reiterating that legacy of financial soundness — including that Hancock has not participated in sub-prime lending — helps reassure customers that they have a safe place to deposit their money.”

Stressing longevity and stability

Longevity and stability are also being stressed by Regions Bank. “Now is an important time for us to let customers and our communities know that Regions is strong and stable,” said marketing director Candace Simmons. “We’ve been around since the mid-1800s, are an FDIC-insured bank and benefit from the diversity of our 16-state footprint and varied lines of business.”

She also points out that the country is at an all-time low in terms of the percentage of income that is saved. “We want people to know that a bank is not only the best place to save their money, but saving itself is a vital life skill,” she said.

Trustmark Bank is reassuring customers of the system’s strength, profitability and its well-capitalized status with nearly 120 years of serving customers’ financial needs, says Melanie Morgan, director of corporate communications.

“Generations of families and businesses have turned to us for solid advice from people they know and trust,” she said. “Our business mix is diversified in terms of geography and product offerings, which enables us to offer premier service to our customers.

Contact MBJ contributing writer Lynn Lofton at llofton656@aol.com.

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