In a recent article Sheshunoff & Co. Investment Banking reports:
"Though 14 banks have failed nationwide in 2008, the outlook for Texas banks appears more positive, the report shows. Sheshunoff credits the strong Texas economy and continued migration into the state as two factors that have enabled the state’s banks to stay healthy despite the growing financial crisis. Meanwhile in rural areas, the high price of farm commodities coupled with the small number of real estate transactions have made it possible for agricultural banks to remain stable."
The report goes on to say:
"One measure of how well or poorly a bank is faring is its ratio of bad loans as a portion of total assets. Referred to as the non-performing assets to total assets ratio, the figure measures the quality of a bank’s assets and indicates the scope of the problem. The higher the percentage, the more troubled the loan portfolio. Although there is no hard and fast rule, a NPAs/total assets ratio of less than 1 percent is an indicator of good asset quality; the lower the ratio, the better the quality of the bank’s assets."
The report also makes available reports for banks in major areas of the state of Texas:
Asset Quality Reviews for Top Five Texas MSAs
You can read the full article here:
It seems there is some good news for Texans in the current financial crisis. It looks like our Texas banks are doing pretty good through the first half of 2008.
Be aware. Be informed. Be prepared.