Energy industry

The Mississippi company said it decided to take aggressive measures to reduce its exposure to energy firms.

The Birmingham, Ala., company more than doubled its loan-loss provision from three months earlier and its chief financial officer said that more than half of its loans to oil and gas companies could eventually become criticized.

Bankers had asserted in April that they could handle a slump in oil prices tied to the coronavirus pandemic. Continued volatility, combined with declining collateral values and a rise in bankruptcies for exploration companies, is denting their confidence.

Deferral periods on scores of commercial loans will soon be ending, and many banks’ profits this year could turn on whether borrowers can resume making payments or will seek extensions.

Borrowers say getting the loans forgiven is just as complicated as obtaining the money; payment companies are holding some merchant funds in reserve as chargebacks spike.

Dramatic volatility in the global oil market, plummeting demand and potential regulatory risks are making some banks rethink their energy strategy.

The Dallas bank appears to be at a crossroads after its merger with Independent Bank Group was called off Tuesday.

Texas Capital also said that Keith Cargill has stepped down as president and CEO.

Even CUs that don’t directly serve the oil and gas industry are likely to be impacted, experts say.

The company reported a loss of $1.3 billion in the first quarter after setting aside more than $5.4 billion for potential loan losses.