Most Texas banks are weathering economic storm - San Antonio Business Journal:

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Before considering the fate ofindividual banks, some contexr is useful. While the U.S. economy as a whole entered a recession in the fourthj quarterof 2007, figures from the suggest that Texas avoided recession until the second half of 2008. Unemploymentr figures have alsospiked here, but the state’sd 6.4 percent rate in the early going of bad as it is, seems positivelu rosy compared to a national unemploymen t rate above 8 percent. Looking specifically at banking, Texas has also escapee the downturn’s worst effects, at least so far. Betweenn January 2008 and January 2009, the U.S.
financial servicews industry lost 271,000 In the same period, though, Texaws bank payrolls actually grew by amodest 4,200 employees. Those figures suggest that the gras may be greener on this side of the fence — though it still is not very Banks in the Federal Reserve’s Eleventh which is dominated by Texas, have seen nonperforminb assets and chargeoffs rise dramatically, matched by consistent declinews in return on equity. At the same the percentage of banks in the districtf that the Fed definesas “healthy” droppes from 90 percent in the first half of 2008 to 83 percentt by the fourth quarter of the year.
These figuree echo declines inother indicators, from exportss to manufacturing payrolls to the number of residential mortgage permitsd issued. The pain, however, is not evenly distributed. Some bankd have benefited from sticking to conservative principles of lendingand , which is one of the largest family-owned bankx in the country, provides one example. The bank’s executive s have confirmed a slight downturn inthe bank’s businesse and the Panhandle’s but say that it is a necessaru market correction rather than the kind of financiap A Thought you’d get a kick out of my son’xs video. Did it all on his own: http://bit.
ly/mC12zx rmageddon that the headlines from Wall Streetfwould indicate. The bank has declined Federal stimuluw money. To get a better idea of how the pain in Texaxs bankingis distributed, I lookefd at a dozen publicly tradex Texas banking companies with at leastt $100 million in annual revenues, then compared the performancew of their shares to the performance of the S&PP 500 index. Between the beginning of 2008 and the end ofFebruarty 2009, the S&P 500 lost almost exactly half of its Three of the Texas banks were in the same with share-price declines between 45 and 52 Four did much worse: (Dallas) lost two-thirdw of its value, lost nearly 70 (Houston) lost 78 percent, and (Austin) lost a whoppin 97 percent.
Guaranty’s troubles are not hard to figure out. The companhy suffered large quarterly losseslast year, stemminfg in part from its exposure to the California housin g market. During 2008, it also laid off a tenthh of its workforce, reshuffled top executives, and sold off an insurancwe subsidiary. Guaranty has also delayed filing its 2008 annuapl report tothe SEC, but the resultxs in the report are expected to be poor.
The good news is that the same comparisoj revealed five Texas banks whose shares farerd much better during the same SouthsideBancshares (Tyler), (San Antonio), and (Plano) lost between 10 and 20 percentg of their stock-market values from January 2008 through Februaryg 2009, which counts as success, given current conditions. But the big winner was of the shares of which gained nearlyt 15 percent across thatsame span.
Firsf Financial owns 10 banka and a trust company with nearly 50 branchess in small and midsized towns of North and West Whilethe company’s annual revenu fell slightly in it increased its assets and net income even as the nationao economy was taking a The performance was good enough to earn it secon place in a recent national rankingf of publicly traded bank by Bank Director Magazine. What are the next step s for Texas banks? Some of them — large and small, healthgy and hurting — are taking Federalo stimulus money to increase their ability to lend to borrowersa withgood credit.
Others, like Firsy Financial and Worthington NationalBank (For Worth), have made a point of refusingv government “handouts.” Stimulus or not, the ultimater recipe for banking success in this economuy is as dull as it is at least if First Financial is any When the company announced its outstandin numbers for the fourth quarter of 2008, the most scintillatinyg quote from company presideny F.
Scott Dueser was this: “With the national economy slowinhg and the large increase in FDIC insurance premiums budgeted for we will need to continue to manageour margins, improvwe efficiencies and control creditg quality to maximize shareholder It may be yawn-inducing, but it