San Jacinto News-Times - Local News
Stories Added - October 2008
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Local banks solid
San Jacinto News- Times - October 2008

COLDSPRING – Community banks are stable with money to loan, according to San Jacinto County bank presidents. Reassuring customers their bank deposits are safe, Peoples State Bank President Jay Estes said Tuesday, “We’re ready to do business. We’re still capable and willing to make loans.” Agreeing, The Bank of San Jacinto County President Denny Clark, said, “We have plenty of money to lend to customers with good credit.” Another move to resurrect President Bush’s $700 billion Wall Street bailout was planned for Wednesday of this week.

The fi rst vote failed Monday when 133 Republicans and 95 Democrats rejected the proposal, sending the stock market falling 778 points. Following Monday’s failed vote Congressman Kevin Brady (R-The Woodlands) said he reluctantly voted to pass the legislation. “Today the United States House of Representatives failed to pass legislation to rescue a crumbling fi nancial market and economy,” he said. Brady, a member of the Joint Economic Committee, further said, “With all their bad decisions, I don’t give a fl ip about Wall Street. But as much as I detest this bill, doing nothing is worse. I couldn’t responsibly stand by and let this fi nancial virus spread to families and small businesses in southeast Texas communities, risking their jobs or their bank accounts.” By Tuesday the Dow was up by 485 points. The Senate plan would include raising federal deposit insurance limits to $250,000 from $100,000. “We have been trying to get that done for years,” Clark said.

Raising the federal deposit insurance limits would reassure customers their bank deposits are safe, according to proponents. “Community banks are doing well. We’re blessed for being in Texas where the housing market doesn’t have the problems others are facing,” Clark said. “We would like more loans and thankful for the position we’re in.” “We’re very well capitalized,” Estes said. “We don’t deal in subprime or low equity to risky-than-average borrowers.” Depositors can assure themselves of the safety of their money by making sure their accounts are structured correctly.

FDIC guidelines provide insurance to $100,000, with account ownership structured correctly, more than $100,000 of coverage can result. IRA accounts are covered separately up to $250,000. FDIC-insured institutions are separately insured, not added together and you may qualify for more than $100,000 in coverage at each insured bank if you own deposit accounts in different “ownership categories.” Suppose you have a variety of accounts at one bank. The funds you have in various checking and savings accounts (other than retirement accounts) in your name alone are insured up to $100,000. Your portion of joint accounts – those with other people – is also separately insured to $100,000. If you also have “revocable trust accounts” at the bank, the total can be separately insured up to $100,000 for each beneficiary if certain conditions are met. Under new rules, certain retirement accounts are insured up to $250,000, up from $100,000 previously. Depending on the circumstances, a family of four could have well over $1 million in deposit insurance coverage at the same bank, according to an FDIC Consumer Affairs Specialist.

Federal law requires the FDIC to pay 100 percent of the insured deposits up to the federal limit – including principal and interest. For more information regarding FDIC coverage, visit the FDIC website at www.fdic.gov. Another way for depositors to assure themselves of their bank’s stability is by visiting Bankrate.com. Bankrate.com is a leading aggregator of financial rate information, continually surveying approximately 4,800 financial institutions in all 50 states in order to provide clear, objective, and unbiased rates to consumers. The site ranks each financial institution on a one to five star scale and evaluates capitalization, asset quality, earnings and liquidity to generate a CAEL rating. The most desirable Safe & Sound CAEL rating is one, the least desirable is five, in accordance with industry standards.

The top star rating is five; the lowest star rating is one. Performing institutions will generally receive a rating of three or better stars with the majority of banks falling into the three to four star range. By contrast, the performing Safe & Sound CAEL range would be one, two and three with the majority of institutions falling into the two range. According to bankrate.com, San Jacinto County’s three local banks size up as follows for the most recent reporting period of 2008. Peoples State Bank received a fourstar rating and a CAEL of two. The Bank of San Jacinto County received a four-star rating and a CAEL of two. First State Bank received a fivestar rating and a CAEL of one. For more detailed assessments of any bank, visit www.bankrate.com.



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