Three questions with St. Louis Fed's Julie Stackhouse
Braden Lammers
Julie Stackhouse, senior vice president of the St. Louis Fed, said the St. Louis Fed's second quarter report showed several positive indicators for Louisville banks.
- Braden Lammers[1]
- Reporter- Business First
- This email address is being protected from spambots. You need JavaScript enabled to view it.[2] | Twitter[3]
I recently sat down with Julie Stackhouse[4], senior vice president of the St. Louis Fed, to discuss Louisville's second quarter banking results[5].
She said the St. Louis Fed's second quarter report showed several positive indicators for Louisville banks including loan growth, improved earnings performance and better results from nonperforming loans.
I asked Stackhouse three questions about what drove those improvements and the expectations for Louisville banking performance.
What factors will drive loan demand in Louisville?
Loan growth likely will come from general economic growth, Stackhouse said.
The more certainty there is in the economy, the more businesses will be confident in expanding facilities and operations, which will boost the loan demand in the region.
There has been overall improvement in nonperforming loans for Louisville banks. Some local banks' nonperforming loan numbers have improved significantly. What is driving this change?
"What we observe with commercial real estate is that it is a cycle," Stackhouse said.
She said typically banks try to work with a borrower that is behind on a loan. If the loan is not paid and enters a non-accrual status, meaning that it has not been paid for 90 days, it is more likely to default. If the loan defaults, and the property is turned over to the bank, it gets classified on the bank's books as other real estate owned (OREO). Once classified as OREO, the bank then can resell the property to recoup its losses.
That cycle is being completed more often in the Louisville market and is reflected in the drop in the amount of nonperforming loans in the second quarter report.
Braden Lammers covers these beats: Financial services, residential real estate, law, property and casualty insurance, construction, unions, engineers, architects and agriculture.
References
- ^ Braden Lammers (feeds.bizjournals.com)
- ^ This email address is being protected from spambots. You need JavaScript enabled to view it. (feeds.bizjournals.com)
- ^ Twitter (twitter.com)
- ^ Julie Stackhouse (feeds.bizjournals.com)
- ^ Louisville's second quarter banking results (www.bizjournals.com)