Eagle Fore creating problems for the banks

[dan_s]

According to the San Antonio Express:

South Texas landowners getting fat checks from oil companies for drilling on their land have been a boon to banks based in the Eagle Ford Shale.

Deposits at most of those banks have surged. The Karnes County National Bank's deposits rocketed 110% to almost $168 million from the end of 2009 through the first quarter of this year.

Eleven other institutions registered jumps in deposits that ranged from 46.8% to 82.7%. By comparison, domestic deposits at U.S. banks increased 14.7% during the same period.

But the influx of deposits has left the Eagle Ford-area banks with something of a challenge: how to deploy that money at a time when loan demand isn't nearly as strong.

"It's a problem, but it's a good problem," said H.B. "Trip" Ruckman III, president and chairman of The Karnes County National Bank in Karnes City. Its deposits rose by $88 million from the end of 2009 to March 31, while its loans rose by $19 million.

"We have had depositors come in with more than a million dollars at a whack," he added. "So it is a challenge to keep the money invested."