TYLER, TX (KLTV) - Bank of America announced it's getting ready to close 10% of its branches, but they have not announced the locations. Then, Guaranty, one of the largest Texas-based banks, is close to going under. However, a spokesperson says our East Texas branches are still open for business.
"Those are banks that for some reason had some underwriting problems that got over extended and were unable to see it through a soft time and that's going to happen in any recession," said Tom Mullins, with the Tyler Economic Development Council.
Despite a few that may be more vulnerable, Mullins says most locally-owned banks are expanding.
"If some of them aren't adding branches in this current economy, they have plans to do it as soon as the economy gets stronger," said Mullins.
In our fast-paced society, electronic banking has taken off. Bank of America, for instance, says 29,000,000 online customers make 3,000,000,000 transactions a year. Yet, many East Texans still prefer face-to-face interaction.
"Banking is always a personal issue," said Lonny Uzzell, Executive VP of South Side Bank. "Our model shows that people are more comfortable if you can deal directly with someone."
Uzzell says they have two new branches; one still under construction. Mullins says you'll likely see more changes in the future.
"Some of the banks, they were taken over by stronger groups, stronger systems," said Mullins. "So you see name changes. For instance, in Texas, Fanklin Bank got taken over by Prosperity."
But, they are growing and that's a very positive sign. Mullins says that where new neighborhoods and houses spring up, new banks will follow.
"Branch banking models look for traffic counts, rooftops and household incomes," said Mullins.
He says most regional banks were more conservative and did not get into risky lending habits which led to trouble for some of the bigger national banks.