Banker Agrees With OSU's Bank Study

By Craig Day, The News On 6

TULSA, OK -- The largest bank failure in U.S. history is prompting concerns by many people in Oklahoma.  But, a new study says Oklahoma's commercial banks are safe.  And, industry experts say there is a big difference between banks in big trouble and Oklahoma banks.

In a stunning development for the banking industry, federal regulators took control of Washington Mutual.  The nation's sixth largest bank has been in trouble for weeks and as clients started pulling out their money, the bank was running out of cash to meet its obligations.

But, Wade Edmundson, CEO at Summit Bank in Tulsa, says Oklahomans shouldn't be concerned about their banks.

"My biggest concern is that the public misconstrues all the activity in Washington and at the money centers and brings that back to Oklahoma and is concerned about the safety of their bank," said Summit Bank CEO Wade Edmundson.

For starters, Edmundson says it's important to point out the difference between investment bank's like Washington Mutual, and commercial banks, which are most common in Oklahoma.

"The ones that are in the news, for the most part, are nowhere near banks like your viewers know," said Summit Bank CEO Wade Edmundson.

Edmundson says investment banks raise capital, and then, place that capital into things like stocks, bonds, and mutual funds.

"That's what they are all about.  Commercial banks are in the business of serving Main Street and all that means is we gather deposits and we loan it out," said Summit Bank CEO Wade Edmundson.

A new Oklahoma State University study found the state's 249 commercial banks are sound.  The study looked at data for the past five years, including past due loans, mortgage foreclosures and profitability.       

Although banks are sound locally, Edmundson does say developments on the national level could lead to more stringent lending practices nationwide, especially for mortgages and possibly other loans.

"They're in business.  They are going to try as hard as they can.  They're just going to carefully analyze the repayment ability," said Summit Bank CEO Wade Edmundson.

The Oklahoma State study found just under 5% of Oklahoma's commercial banks were unprofitable for the year's second quarter.  That's compared to 16% of banks nationwide during that time period.