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Southeast Banks: Rate cuts add to good times in a strong regional economy.(A)(INDUSTRY SNAPSHOT)
Byline: Steve Watkins
Plunging interest rates and a powerful regional economy are putting southeastern banks in the sweet spot. Thanks to five Federal Reserve rate cuts,banks are paying less for the deposits they need to make loans and earning more on the spread.
That's gravy to southeastern banks, which operate in a part of the country that's booming. The region's population has grown steadily. So have jobs. Companies looking to relocate or expand often turn to the Southeast. In recent years, four automakers planned or finished huge plants.
"That's still the strongest part of the country," said Christopher Kelley, analyst at Morgan Keegan & Co.
Still, not all is rosy. The slowing national economy poses the threat of more loans going bad. And nonbank rivals are inching onto banking turf.
1. BUSINESS
Southeastern regional and community banks' main business is making loans andgenerating a profit on the spread between what they pay for deposits and what they charge for loans.
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