Banks, banks, banks!

March 11, 2009 5:16:53 PM PDT
With the talk of multi-billion dollar stimulus packages and banks closing their doors and losing money, it's no secret banks across the country are in trouble. [SIGN UP: Get headlines and breaking news sent to you]

In Houston, you can't go anywhere without seeing a branch bank on almost every corner. So what impact does the financial crisis have on our banks?

It's hard to pass a street corner without seeing a bank. Regardless of the company, it may seem as though banks and their branches have saturated our neighborhoods. However, with the banking industry having trouble lately, it's a trend that could be changing.

It's almost cliché to talk about a coffee shop on every corner. We see so many of them everywhere, but if you put your cup down long enough to notice, most of our corners aren't caffeinated at all.

It seems banking is the new flavor of the month, with more and more branches pouring themselves into our neighborhoods.

Here's a perfect example: In this one single shopping center, you'll find one bank which sits right next to a second bank, and then a third bank and then a fourth one just beyond those trees.

In fact, from 2006 to midway through last year, the number of federally insured bank branches in Texas jumped 10% to nearly 6,900.

"This huge explosion is going to come to an end and all these banks with all these branches are going to have to figure out what to do with them," said Geoff Greenwade of Green Bank.

Greenwade is president of Houston-based Green Bank. He used to work for some of the larger chains and knows all about branching out.

"I'd sit in meetings where we'd say XYZ bank is going up and we gotta get there. We gotta find land to buy, we gotta get that branch out there because rooftops are going up," said Greenwade.

Green Bank has fought that temptation, going out of its way to encourage customers not to use its branches with remote check deposit machines for businesses and only a handful of smaller locations.

"Technology and customers habits change," said Greenwade.

Green Bank is somewhat the exception with the banking industry almost grinding to a halt in recent months.

"It won't surprise me to see less growth because as banks have less excess money on their balance sheets, they'll have to be selective about what they invest in and branching might be one of those things that they cut back on," said Julie Hill of the University of Houston Law School.

It's sometimes hard to see what investments make sense without looking at them through the filter of time, especially when you're banking on them.

Interestingly, regardless of the ultimate bank shakeout, the trend of growing branches and shrinking numbers of actual institutions is not new.

In the decade ending with 2004, the number of branches nationwide went up 15%, while the number of companies went down nearly 30%.

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