Questions and Answers with Kell Kelly
Questions and Answers with Kell Kelly

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Published: September 23, 2008

Q: This year has been a tough one for the banking industry — and yet so far Oklahoma seems to be surviving the storm. But is the state really going untouched by what's going on nationwide?

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A: The momentous actions on Wall Street of the past week will definitely affect Oklahoma. When the government steps in to "own” Fannie Mae & Freddie Mac, it will affect Oklahoma. When government guarantees investment bank's mutual funds and mutual fund money market funds, it will affect Oklahoma. Fortunately, economic forecasts for Oklahoma that I have heard continue to show strength, thanks to our oil and gas, agriculture, aerospace, real estate and other industries. Home values in Oklahoma also remain strong and viable as we did not experience some of the inflated valuing and sub-prime lending as we saw in states like California, Florida and Arizona. The fall-out effect of this, originating from a few states, has been significant however.

Q: Has the banking slump slowed down Spirit Bank's expansion plans?

A: As a whole, the commercial banking industry continues to do very well and is extremely well capitalized — to the tune of $1.5 trillion held in capital by all 8,000 banks. Ninety-eight percent of all commercial banks are well capitalized. This is not to be confused with the investment banks on Wall Street in the news today. These investment banks have little in common with the highly regulated commercial banks. The government "bailout” of investment banks in the news this week-end will most definitely change the degree to which they are regulated and insured.

Q: What can Oklahoma expect over the next year?

A: While we do not see some of the indicators that suggest as extreme a downturn as other states might, I think we may see many sectors "hunkering down” in order to weather whatever is ahead. This, in and of itself, may have an impact on employment and other areas. The recent failures of Wall Street are largely unprecedented, and so it will be very difficult to gauge outcomes.

Q: Spirit Bank is involved in both Oklahoma City and Tulsa. Do you see both cities continuing to grow or will national economic troubles eventually hit home?

A: It wasn't long ago that Oklahoma City was listed as one of the most "bullet proof” cities in the nation from inflation or economic downturns. And, Tulsa has done very well to diversify its industries in order to follow suit. Every downturn has an upside. It may well be that Oklahoma is one of the upsides of this economy and can prosper by attracting new entrants finding a centralized place to compete with good labor and good real estate prices. While as I mentioned, Oklahoma will not be immune from the national troubles, it's good to keep in mind that we are Main Street and not Wall Street.

Business Writer Steve Lackmeyer