A number of BE banks are still reeling from hefty loan losses and the Treasury department’s more stringent capital requirements as they aim for new customers. In fact, federal banking regulators have closed or forced the sale of nearly 350 banks nationwide—including five black-owned institutions in the past eight months—since the financial meltdown of 2008. (BE’s list of the largest banks fell from 25 to 20.) In some cases, banks with stronger balance sheets were able to acquire those that failed. Seaway Bank and Trust Co. (No. 3 on the BE banks list with $516.6 million in assets) is among them, having assumed control of Legacy Bank, the 2009 BE Financial Services Company of the Year, when the institution went into receivership after hefty loan losses.
While community banks fight for survival, Buddy Howard, president and banking analyst at Equity Research Services Inc. in Raleigh, North Carolina, says other institutions need to differentiate themselves from larger competitors through a combination of local decision making, personal service, innovative product introduction, and technology-enhanced service offerings such as mobile banking.
CEO Alden McDonald Jr. at New Orleans-based Liberty Bank and Trust Co. (No. 5 on the BE banks list with $463.8 million in assets) has invested $1 million into several new technology systems, including one that will allow individual and commercial customers to process checks or make deposits from their home or office. The bank this year is also launching a mobile banking unit to allow customers, particularly young professionals, to open accounts via Facebook and Twitter. “We’re going to compete with the big banks through the social network,” McDonald says.
Chicago-based Loop Capital Markets L.L.C. (No. 1 in taxable securities with $29 billion in lead issues and No. 2 in tax-exempt securities with $2.8 billion in lead issues on the BE investment banks list) led more than $10.6 billion in underwriting transactions in 2010, up 32% year over year, says Kourtney Ratliff, a partner who works in the firm’s equity division. The firm is in growth mode: In January 2011, it acquired Gardner, Underwood & Bacon L.L.C., a Los Angeles-based independent financial advisory firm. Moreover, Loop has doubled the size of its global equity trade desk to allow it to trade in more than 50 countries, doubled its fixed-income trading and sales teams, and tripled its corporate advisory services department.
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