Banks of all sizes are likely to feel the impact if job growth stalls in metro Baton Rouge over the next two years. But community banks are likely to be hit the hardest.

Unlike the big banks, smaller ones do most of their lending in the local community, says analyst Woody Briggs of Chaffe & Associates in New Orleans. For such community banks, the local economy "is where their basic health comes from."

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"They don't spread their risk," he adds.

But Briggs thinks big banks will also be bruised if projections of two years of tiny job growth hold true. Growth at all banks is likely to slow, and lending in some areas could generate losses in the Baton Rouge market.

"It's got to hurt them," he says.

Two local bankers say they aren't surprised by the outlook, citing the petrochemical sector's continuing struggle. But neither predicts major fallout from stalled growth.

Still, Rob Stuart, regional president for Hibernia National Bank, says he'll be closely watching real estate lending for signs of trouble. Problems could surface in two areas.

Builders could encounter problems paying back construction loans if demand for all the new homes being built cools off as fewer people move into the area for jobs.

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Also, the vacancy rate at local apartments could rise as apartment dwellers buy homes at a time when fewer people are moving into town to fill those empty units. That could endanger loans to apartment owners, Stuart says.

In general, the lack of job growth limits lending opportunities, since it means banks are likely to do fewer small business loans, he says.

"More than anything, this is a loss of opportunity, rather than a loss in money," says Stuart.

Mark Bensabat, Bank One's regional president, says he's hoping new projects that haven't been announced publicly will provide a buffer against the job slowdown.

"There may be some," he says. "That's my hope."

Bensabat and Stuart agree on the long-term fix to the current slowdown: diversifying the economy so that its fortunes aren't so dependent on petrochem.

"Industry can't be counted on to produce jobs the way it used to," Stuart says.

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