Are Houston banks safe?

October 6, 2008 9:05:03 PM PDT
In addition to the markets ups and downs, one of the financial headlines this year has been banks.A number of the financial institutions have failed and it's something, for the most part, we're not seeing here in Houston.

Fourteen financial institutions have failed this year and they include big names like Wachovia, Washington Mutual and Lehman Brothers. Experts caution there could be more, but they also encourage you to consider the Houston landscape.

With all the economic gloom and doom circulating that piggy bank may be tempting right about now, but stop. You live in Houston. There have been no long lines outside failed banks, no emergency takeovers. There have been plenty of questions.

"The questions all come down to is my money safe in your bank, how can you show me it is and do I need to worry," said CEO of Amegy Bank Paul Murphy.

The overall answer is no says Murphy. He has been doing more handholding lately but reassuring clients isn't all that difficult.

You see, banks reflect their local economies and Houston's strong oil and gas industry, medical center and port all contribute to the city's financial health and growth. Keeping banks here isolated and in some cases making them incredibly successful.

"We're having our best year ever in history of bank," Murphy said. "Our earnings are up problem assets are stable."

In fact 68 Houston banks are faring well. That's according to a report by the Austin firm Sheshunoff and Company Investment Banking. And one number says it all. When IndyMac Bank failed in July, seven and a half percent of its assets were problem loans. Compare that to Houston banks. On average less than one percent of their assets are bad.

"They're managed by local people who know their markets well," said managing director Curtis Carpenter. "It's easier to make loans in your own backyard with people you know as opposed to some of these networks that are all throughout the country."

So while the view of the credit crisis beyond Houston looks bad, here in the city, it's not even close to the point where you should start storing your pennies in ceramic.

"I can say with confidence your money is safe," Murphy assured.

An added level of comfort, the new FDIC insurance kicked in, increasing the guaranteed government coverage from $100,000 to $250,000.

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