If bankers learned anything from Hurricane Katrina, it's that disasters often bring opportunity.
As a result, Gulf Coast bankers are optimistic about the potential for new business stemming from the recovery effort after the recent oil spill.
Fishermen who aren't able to fish are using their boats to assist with cleanup efforts. BP, the company that owns the leaking oil rig that exploded late last month, has been hiring contractors to assist in the cleanup as well as inspect other wells and pipelines for problems.
Bankers say those customers need loans for working capital and equipment and to hire more workers.
"Our loan demand has shot through the roof because all these people have to go out to work," said Rusty Cloutier, the president of MidSouth Bank in Lafayette, La. "Every boat in southern Louisiana is out on the Gulf of Mexico working."
And bankers say they and their commercial borrowers are using the lessons learned from Katrina to minimize their exposure.
At Hancock Bank in Gulfport, Miss., relationship managers have actively contacted customers from sectors that could be affected by the oil spill, said Carl Chaney, the bank's chief executive.
Hancock, with $8.6 billion of assets, counts among its customers several major seafood processors. So far they've been able to obtain fish from other parts of the Gulf of Mexico, or move their fleets. Most also had plans in place to handle service disruptions, Chaney said.
"Katrina taught us all some very valuable lessons, that disasters can and do take place, that you need to have disaster contingency plans in place," he said.
As in the wake of Katrina, businesses also are seeking to supplement their lost income through the cleanup effort.
There was a tremendous demand for debris removal after the hurricane, for example, and customers with dump trucks came to Hancock for loans to buy more trucks and hire drivers, Chaney said. This time, he expects to see out-of-work fishermen pursue cleanup business.
"There are plenty of boats in the market, as you know, with this economy," he said. "They could pick up some additional boats at a very, very attractive price."
MidSouth's Cloutier said his $974 million-asset bank is still trying to survey the spill's impact on his customers. He has heard from restaurant owners concerned about their ability to obtain fresh seafood. And many of the bank's commercial customers are in the oil field services industry. But it's too early to tell whether those customers will be affected, he said.
"There are people that are concerned today, but I'm really not sure how much I should be concerned," Cloutier said.
Meanwhile, the Small Business Administration announced last week that it would make direct, low-interest economic-injury loans available to small businesses along the Gulf Coast.
At the same time, 500 miles northeast, banks in Tennessee are in a similar predicament after widespread storms and flooding across the state caused an estimated $1 billion in damage, and killed dozens of people.
Charles Burkett, the president of banking at First Horizon National Corp. in Memphis, said the bank is already starting to field loan requests as a result of the storms. "There will be a lot of rebuilding, [and] there will be a lot of people that need to reinvest in their business and homes," Burkett said.
The $25.8 billion-asset bank is extending credit limits, expediting loan requests within hours and relaxing loan rates and automated teller machine fees.
Like the hurricanes on the Gulf Coast, the storms in Tennessee affected most businesses in the state. But the oil leak, while devastating, is limited to a few industries.
Loren Scott, an economist and professor at Louisiana State University's E.J. Ourso College of Business in Baton Rouge, said even though Louisiana is No. 2 in the nation in terms of fish caught, seafood is not the state's primary industry.
"My guess is that there are not a lot of banks that are heavily weighted toward fishing," Scott said. He could not estimate how much of an overall effect the disruption to fishing would have on the state's economy.
But Guy Williams, the president of the $986 million-asset Gulf Coast Bank and Trust Co. in New Orleans, said he worries about the broader policy implications the spill could have on the state's No. 1 industry — oil and gas production. He said a "knee-jerk" reaction from the federal government, such as limiting production in reaction to the disaster, could have much more dire consequences for Louisiana's economy, and its bankers.
"We finance a lot of people that are in the oil field," Williams said. "If the oil field goes away, that would be a big deal."