Texas Banks Boost Reserves For Souring Energy Loans
More money being set aside in case loans to energy industry go bad
By Andrea Rumbaugh, Houston Chronicle
February 7, 2016 Updated: February 7, 2016 5:37pm
Texas banks are socking away more money to cover problem loans as the oil price slump persists and as their own stocks take a beating over concerns about the energy economy.
This increase in reserves was widespread late in 2015 among publicly traded banks that lend to energy companies.
“I think we all just decided it (the price of oil) is not going to go up anytime soon,” said Geoff Greenwade, president and CEO of Houston-based Green Bank, which set aside $12.5 million in the fourth quarter for problem loans, bringing its reserves to $32.9 million.
Boosting reserves could prove wise, as some banks reported an increase in energy borrowers who may become unable to make payments.
“There are headwinds, without a doubt, but it’s not hurricane-force winds,” said Steve Scurlock, executive vice president of the Independent Bankers Association of Texas.
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