TEXAS LENDING INCREASES

AUSTIN (Austin Business Journal) – Despite the national recession, Texas banks increased their lending levels in 2009, with a cumulative $247.1 billion in loans sent out from the state’s 629 banks, according to the Federal Deposit Insurance Corporation (FIDC).

That is compared with $233.5 billion lent from Texas banks in 2008 and $229.1 billion during 2007.

The FDIC does not discern between the types of lending that has occurred when making its calculations. Industry experts warn that the increased lending activity is good news if it was used to prompt business expansion, but not if it was caused by increased credit card debt.

Local bankers indicate that much of their increased lending activity was from businesses applying for loans at Texas banks after being turned down by national banks.

High oil prices and banking regulations adopted in Texas following the real estate bubble of the late 1980s and early 1990s largely muted the recession’s effects. Those regulations, coupled with the Lone Star State’s business sector diversity, are contributing to its strong lending position, said John Heasley, general counsel for the Texas Bankers Association.

Nationally, total loan and lease balances fell to $7.2 trillion in 2009 from $7.8 trillion in 2008 and $7.9 trillion in 2007, reported the FDIC.