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