Local banks remain steady in unsteady times
The news on the national level has been anything but rosy for banks.
But when you visit local financial institutions in western Wisconsin, there's not the panic that's being shown in New York.
For many banking customers, their worries were addressed with the upper limit of Federal Deposit Insurance Corporation coverage was extended to $250,000 in deposits. The previous limit was $100,000.
And most banks operating in the St. Croix County area never were involved in the high-risk business of sub-prime mortgage lending, so bankruptcy worries didn't materialized around here.
Still, customers have been calling their local bankers to see if their money is safe. The banks have been ready with a response.
Ed Schroeder, first vice president of commercial banking at AnchorBank in New Richmond, said it's no wonder customers are worried during these uncertain times.
"We're kind of in unchartered territory," he said. "When people on main street see the big boys fail, everybody takes notice."
But just because the major financial institutions are in need of a federal bailout, Schroeder said most small banks are doing just fine. Those local institutions are rarely involved in high-risk ventures.
Bremer Bank officials have developed some brochures and hand-outs to help customers and community residents understand what's happening in today's economy.
"You flip on the news and the news about banks is all over the place," said Heather McAbee, market manager at Bremer Bank in New Richmond. "We see it as an opportunity to serve our community and help everybody through it."
The educational pieces have been helpful in replacing fear with calm, McAbee said.
"We've been able to share with them some perspectives on what's going on, rather than feed the panic that's out there," she said.
Part of their message is that local banks remain strong and deposited monies are safe. Bremer, like many of the local banks, is well capitalized and doing well, McAbee said.
Unlike the Depression years, McAbee said, the nation's financial industry is protected so that financial institutions won't collapse completely.
"We have safety nets in place that will never allow us to get to that point again," she said.
First National Community Bank President Denny Nybakken agreed that no one needs to worry about the financial health of the local, community banks.
"Not that we don't have some issues," he said, "but we're still making money and we're not losing money."
In his 35 years as a banker, Nybakken admitted he's never seen anything quite like the current crisis.
"We've had some major corrections in the (stock) market, but I've never seen anything move so fast and go so deep," he said.
But Nybakken predicts things will begin to turn around economically once a new president is elected.
"Then, I think, we'll see some positive things happen," he said. "I'm an eternal optimist -- I think the real estate markets will begin to turn around and other positive things will happen, no matter who the next president is."
Rick Prokash, branch manager for the New Richmond office of the First National Bank of River Falls, echoed the sentiment of the other local bankers.
"It's (the national banking crisis) all definitely become a topic of conversation that people are asking about," he said. "But for the most part community banks are doing very well."
He said his bank hasn't had any foreclosures through the tough times, because lending officials try to help families find homes that they can afford.
That's in contrast to sub-prime mortgage companies who wrote loans and then immediately sold them to the eventual servicing bank.
Local banks most often hold on to the servicing of the mortgages so they can retain a relationship with the customers, Prokash said, making it important that they not lure customers into a high-risk situation.
"We're looking at the long haul with people," he said.