It was hoped that the large New York and other money center banks had recognized their losses and found the bottom of the profit barrel, but it now looks like there is another wave coming. Lehman Brothers, UBS and other big players are announcing new rounds of write-offs as the credit and liquidity crunches drag on. So look for more bad news coming from the national press on banking.
But what about banks in South Louisiana? Recent information still indicates that our banks are doing well and still have plenty of capital and liquidity. Are they experiencing a slowdown in lending and are credit problems increasing? Sure, but not nearly the extent being experienced with their distant relations in other markets. And our banks were quicker to respond by tightening underwriting standards and returning to credit basics, so they are still in a
position to provide needed capital for active and growing businesses.
The hot buttons for banks looking at commercial real estate deals are old standards: stable cash flow, experienced and well capitalized sponsorship, and solid collateral values. Money is still available for good deals and deals with good stories. It just takes a little more persistence than in years gone by.
(Brian Andrews is a certified mortgage banker specializing in the financing of commercial real estate. His business is Andrews Commercial Mortgage and he can be reached at brian.andrews@acmla.com.)
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