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Get Rid Of Your Fears. Do The Math.

by Mark Singleton


If you are fearful of your bank closing its doors, especially independent banks in Ellis County, then we need to revisit fourth grade math.  You will find, I believe, a welcoming sense of relief that a remarkable number of community banks should not be lumped in with all those rascals that are causing havoc in the financial marketplace.

There are approximately 8,300 banks in America that are insured by the Federal Deposit Insurance Corporation.  Last year, according to Sheila Bair, the chairperson of the  FDIC, 16 of those banks failed.

If there were 16 of approximately 8,300 banks that became insolvent in 2008, that left around 8,294 that kept their doors open, or 99.8% that sustained the chaotic economic times.  That is not a bad percentage.

 So what about this year?  Well, things are worse.  According to the FDIC, 21 banks have been closed through March
27th.  If that trend goes on throughout 2009, then the solvent banks will dip down to 98.5% of the banks in America that are doing just fine.

 Many economist forecast that by the third-quarter of 2009, there will be a leveling out of the downward spiral we have experienced in the past 12 months.  If that is the case, then we won’t see banks failing, but rather being a major reason why the economy is rebounding.

Here is the problem we face.  The top 20 banks in the United States in relation to size of deposits represent 80% of all the deposits in the nation.  Therefore, if one of those 20 banks is forced to close its doors, the affects are significant.  And, we hear every day that several of those top-tier financial institutions are experiencing difficulties.

Anyone that has followed the crisis with those Big Boy Banks will tell you that greed, sub-prime mortgage loans, hedge funds, risky investments and a get rich quick mentality all contributed to the banking crisis that the media keeps reporting.  However, I can assure you that it wasn’t the other 8,300 banks in American (I’m sorry, the projected 8,134 banks left at the end of 2009) that caused the chaos.

The independent banks in Ellis County are doing just fine.  You can access their balance sheets through the FDIC website ( and see that they are all financially secure.   I’m very proud to be part of the 98.5% of the banks that put responsibility to their customers in front of personal greed.