Bank Lending Can’t Keep Up with Deposit Growth

Growing deposits at banks in South Texas has been news ever since lease bonuses from the Eagle Ford began rolling in. Now, rising salaries combined with royalty income means deposits are rising faster than the banks can lend. At 20 banks surveyed by MySA:

  • Deposits increased by 46.8%+ at 12 of the 20 banks – (National Avg 14.7%)
  • Karnes County National Bank led the region with 110% deposit growth ($168 million)
  • 14 of the 20 banks reported loan growth between 6.5% and 62.2%

That’s all since the end of 2009. While it has been slow to date, lending will grow as more commercial, retail, and multifamily developments come to the area. For now, I’ll say having too much money is a good problem to have. [Read more…]

Eagle Ford Bank Deposits Setting the Pace in Texas

Bank deposits in South Texas are benefitting from a growing population of skilled workers who have higher paid oil & gas jobs and mineral owners who are reaping the benefits of new found royalties. Bank deposits grew a little over 10% from 2008-2011 across Texas, but deposits in South Texas grew more than 15%.

While that’s impressive, I expect the gap will only widen in the next couple of years. Development activity just began hitting its stride in 2011. Royalties are trickling in, but there is much more to come. In many wells, there are dozens to hundreds of people cashing royalty checks once production starts. [Read more…]

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