Osborn: Oklahoma Will Have More Bank Failures

By Bill Johnson, Ap | THE JOURNAL RECORD, August 9, 1988 | Go to article overview
Save to active project

Osborn: Oklahoma Will Have More Bank Failures


The man who helped guide Oklahoma's banking industry through some of its darkest days says the light of improvement is flickering a bit brighter now, but is far from being turned to full intensity.

``There will still be more bank failures in the state, but I believe we have bottomed out,'' Wayne Osborn, Oklahoma banking commissioner, said in an interview. ``There is some improvement, although not a whole lot.''

Osborn expressed particular concern for the future of the savings and loan industry, saying he believes it can be saved only by massive congressional action. He said he is skeptical of a plan endorsed by federal regulators to consolidate ailing savings and loans with a healthy institution.

Osborn, who has been connected with banking for more than 35 years, supervises all the state-chartered banks, savings and loans, credit unions and trust funds in Oklahoma. Since he moved into the top job July 1, 1987, he has seen banks in every section of the state collapse, many of them through the weight of bad energy and agriculture loans.

``We had 31 bank failures in Oklahoma last year, 17 of them state banks and 14 national banks,'' Osborn said. ``To date this year, we have had 10 failures, seven of those state and three national.

``I would anticipate we will have approximately the same number of failures the second half of the year as we had the first.''

At present, he said, ``35 to 40 percent of the banks'' in Oklahoma have problems to one degree or another. Many of these banks ``are hanging on and the severity is not as great as it was a year or so ago,'' he said.

Osborn says conditions are getting a little better in western Oklahoma, where the collapse in oil and agriculture prices made thousands of bank loans worth little more than the few cents a pound they could bring as scrap paper.

``That is changing,'' Osborn said. ``Western Oklahoma was not hit as hard by the drought this year as other states. Beef prices in particular are up, and the drought has helped the agriculture economy in that area tremendously.''

And, says Osborn, who began his banking career while still in college in Fayetteville, Ark., ``there is even a small upsurge in drilling activity.''

By contrast, he said, segments of the banking industry in eastern Oklahoma are suffering, ``largely because of real estate loans. I think we all got lulled into a false sense of security through the old saying that they aren't making any more real estate, so it's always a good investment.''

That saying was true during the oil boom of the early 1980s when ``we saw an annual 5 to 15 percent increase in the price of real estate,'' he said. After the boom collapsed, so did real estate prices ``at just about the same rate over the past two to three years.''

The result: lending institutions are stuck with buildings no longer worth the cost of the original loan.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Osborn: Oklahoma Will Have More Bank Failures


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?