By Rubenstein, Jim
Independent Banker , Vol. 45, No. 1
It was certainly tough times back in the 1980s for Louisiana banks, but J. B. Falgoust, president and CEO of First American Bank and Trust of Vacherie, boasts that he "never lost a night's sleep."
Indeed, that's because he was confident his bank--now $250 million in assets--was holding to a conservative lending and investment policy that t the times.
Today that policy seems to be have paid off in a successful office expansion program in key Mississippi River towns.
"Back in the 1970s and early '80s, when some people thought you could not run a profitable bank unless you were 80 or 90 percent loaned up, we were often less than 25 percent loaned up," Falgoust recalls.
It was in the decade of the '80s that Louisiana's economy got jammed between a major slump in oil prices and a deep real estate recession. Between 1984 and 1989, more than 100 of the 300 community banks in the state and X6 of the 90 savings and loans "flew the coop," Falgoust says.
First American still maintains a low loan-to-deposit ratio of 40 percent but the bank is advertising heavily for loans.
"Our philosophy has always been that we are in business to serve our customers and to help them," says Falgoust. "You are not helping them when you make customers loans they will never be able to pay back because of the kind of extremely high interest rates we saw in the '70s and early '80s."
According to Falgoust, when a bank's customers get in trouble the bank often gets in trouble, too. Real customer service, plus hard-nosed, common-sense banking with an eye toward taking full advantage of opportunities for growth, make up what Falgoust considers First American's success formula.
Since 1980, First American has grown from three offices and $27 million in assets to more than 14 offices spread over five Louisiana parishes (counties). The bank has returned 1 percent on assets every single year.
First American had long been an opponent of branching beyond parish lines, but when the law changed in 1986, Falgoust said he saw no reason to miss expansion opportunities for his bank. …