Amid banking worries, N.C. banks are strong

Posted July 15, 2008

In the nearly steady stream of bad news about banks, many consumers are likely wondering if any bank is safe.

Financial institutions of all sizes are facing problems with souring debt in a weak economy, even if they haven't been hit hard like Wachovia Corp., or like IndyMac Bank F.S.B., which the government took over Friday.

Even so, earnings reports and an analyst's assessment of Wachovia on Tuesday showed that financial companies are still suffering credit losses – and portended more bad news as more banks' second-quarter results come out.

"I would not anticipate that any of North Carolina's institutions are really at the worst end of what's going on, but that's speculation," said Paul Stock, executive vice president of the North Carolina Bankers Association.

The association says that although individual institutions might struggle, the state's banking system is strong and will remain strong.

"I think the message is, one, not to panic; and two, the banking industry is exceptionally strong in North Carolina," Stock said.

The Federal Deposit Insurance Corp. insures consumers’ deposits up to $100,000 per depositor per bank and up to $250,000 for retirement accounts, the Bankers Association said.

Across the nation, analysts say they don't see consumers fleeing en masse from their current banks in search of safety elsewhere. IndyMac customers were lining up for their money despite government assurances it was safe, but so far, that seems to be an isolated case.

"Yes, there was a bank failure. Yes, there [were] a lot of people wanting to get their money. But I don't think there is any sort of distrust in our banking system," said Keefe Bruyette & Woods analyst Jefferson Harralson. "Some banks, as it is right now, are just more risky than others."

Bart Narter, senior analyst at Celent, a Boston-based financial research and consulting firm said, "If people pull out their money [from] one bank, they will put it in another bank."

"The FDIC works," Narter said. "I think that consumers can rest easy that their deposits are insured."


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  • Rolling Along Jul 16, 2008

    Wachovia, Bank of America and BB&T are regional/national banks, and yes Wachovia, BOA and BB&T are going to be hurting. Banks like First Bank and some other smaller regional banks are in much better shape, because of their conservative loan practices. The big boys got greedy and were handing out money to anybody and everybody that had a body. It is now time to pay the piper for their bad practices. Unfortunately it is going to be on the backs of the taxpaying working American citizens.

  • duster 340 Jul 16, 2008

    FDIC has a web site that has a list of fail Banks. There has been 5 to fail this year since Jan. 08 !

  • mramorak Jul 16, 2008

    Robbing them seems to be a plus.

  • oldschooltarheel Jul 16, 2008

    Wachovia & BB&T have both been referred to nationally when discussing banks in danger because of their poor lending practices. FDIC insurance is to $100,000 - many recommend keeping no more than $90,000 in any one bank. When one looks at interest rates offered and factors in income taxes on that interest & the current inflation rate, it begins to make sense to withdraw that cash & ferret it away...

  • Bendal1 Jul 16, 2008

    Don't believe ANYONE working for banks are acting as their lobbyist when they say "not to worry". Wachovia is, last time I looked, a NC bank, yet here's a banking official saying "NC banks are strong". Uhhhh, not all of them are.

    IndyMac wasn't the last one that will fail this year. However, if you've got less than $100,000 in any one bank, FDIC will cover you. It's the people who had over that in IndyMac I feel bad for; they just found out that their money over $100k was worth half what they thought it was worth.

  • ThisIsMyName Jul 16, 2008

    These days I would not trust the government to insure any of my money.

  • ThisIsMyName Jul 16, 2008

    Some people I know are considering taking their savings out of the bank in cash and putting it in a safe place. Scary times.

  • Deacons Jul 16, 2008

    WAchovia is not far from there.

  • davidgnews Jul 16, 2008

    I thought Wachovia was in trouble and under investigation - for other reasons than the current 'crisis.'

  • Pseudonym Jul 16, 2008

    Remember that this is just another media-created frenzy.


    At least this article mentioned that your $$ is insured by the FDIC up to $100,000, which is more than I can say about many articles about IndyMac lately.