Newspapers, television newscasts and the Internet have been filled with stories about the losses being experienced by banks due to write-offs of mortgage-backed securities. Most of the news has focused on Wall Street investment institutions rather than "Main Street" commercial banks.

When a person is ruminating about the condition of the banking industry, it is important to distinguish between the two - an investment bank versus a commercial bank. A main reason this is important is that the Federal Deposit Insurance Corporation (FDIC) provides insurance coverage on deposits at highly-regulated financial institutions that display the FDIC logo throughout their branches, website and in their advertising.

This is not to say the commercial banking industry has not sustained significant losses due to mortgage-backed securities, subprime mortgages or from construction loans. And even though the banking industry in general is not doing as well in 2008 as it did in 2007, it’s important to realize today’s difficulties are not of the same magnitude as the banking crisis of the late 1980s to early 1990s when 28 institutions failed in Arizona. In 1991, there were 1,430 banks on the FDIC’s problem bank list. Today there are 115, and only 15 of these are in the West. As of Sept. 5, when Nevada-based Silver State Bank was taken over, the FDIC reported there had been 11 bank failures in 2008.

How can customers be certain their money is safe on deposit at a commercial bank?

The first line of defense is for a bank to have significant capital and reserves to cover losses during tough economic times. The FDIC reports Arizona’s banks are highly capitalized with an average capital ratio of 10.31 percent — well above the national average of 7.89 percent. A good resource to use to check up on the financial health of your bank is to go to www.bauerfinancial.com, which rates banks on a number of factors and provides an overall rating of one to five stars with one star being the worst and five stars being the best. The site proclaims, "No institution pays for its rating, nor can they elude it."

However, the last line of defense — and the most important — is the FDIC’s coverage that insures up to $100,000 per depositor per insured bank and up to $250,000 for individual retirement accounts (IRAs). Insured accounts include savings accounts, checking accounts, certificates of deposit and money market accounts.

As has been stated innumerable times, no depositor has ever lost a penny in an FDIC-insured deposit when a bank has failed. There are many ways for an account to be protected. You can go to the FDIC’s website - www.fdic.gov/deposit/deposits - to determine how FDIC insurance works. Using the website, you should be able to restructure an account in a way to bring more of your deposits under protection if your total accounts at a particular bank are over the FDIC’s insured limit.

I think all would agree these are difficult economic times in Tucson and in Arizona. However, the state’s banking industry is diversified, with more than 80 banks serving customers every day at hundreds of locations statewide. Arizona’s banks have provided capital for Arizona’s growth for decades and will continue to fuel our state’s growth in the years to come.

Contact Fred Dawson Jr., executive vice president and chief credit officer for Commerce Bank of Arizona, at fdawson@commercebankaz.com or (520) 325-5200. Commerce Bank is a locally-owned community bank specializing in serving small- to mid-size businesses in Tucson.