Oct. 9--MERCER COUNTY -- Is my money safe?

It's a question local financial institutions haven't heard from their customers in more than a generation.

Not since the savings and loan debacle of the mid-80s have banks, thrifts and credit unions had to deal with the issue of depositors' safety. Over the past week both the Federal Deposit Insurance Corp. and National Credit Union Administration have raised their insurance rates to $250,000 per person at an institution from $100,000. Both insurers are back by the full faith of the U.S. government.

Increasing the deposit insurance coverage was included in the $700 bailout measure signed into law last week. It was intended to instill confidence in the banking and financial system.

"It means the average citizen in this community should feel pretty good about making deposits in their bank,'' said Bob New, chief executive officer of Hermitage-based FNB Corp., which owns First National Bank of Pennsylvania. "First National deposits were never in jeopardy.''

Other institutions offer a similar story. But they all agree their customers are making sure their deposits are backed by insurance through the U.S. government.

"I can't imagine people would go to anyplace right now that isn't FDIC insured,'' said Ray Kaltenbaugh, Mercer County State Bank's president and CEO.

Mercer County State Bank never got into subprime loans or lent money based on 125 percent of the value of a home like other institutions, he added. Deposits at the bank are running at a normal levels along with the percentage of delinquent loans.

"We haven't seen any changes in our loans,'' Kaltenbaugh said. "People who have a good credit rating, put money down and a good income-to-debt ratio should be able to get pretty much like they did before.''

Local credit unions said their members are checking in.

"We've had a zillion calls,'' said Pam Suber, CEO of PennStar Federal Credit Union. "Customers are asking what type of insurance we have.''

Like most credit unions, Ms. Suber said PennStar will only invest funds in ultra-safe securities backed by the government. PennStar hasn't seen its loan funds dry up.

"We haven't turned down someone for a loan due to a lack of funds,'' she said. "It's just not affecting us what-so-ever.

National City Bank was among the institutions that got whacked with subprime loans and was forced to secure a $7 billion capital infusion in April. The company's stock has also been hammered as it began the year over $16 a share and then hit below $2 a share last week.

Amid all the market turbulence the bank's business has remained strong and is improving, said National City spokesman Bill Eiler.

"National City is a strong, stable, and well-capitalized company that has raised the capital we need to manage through the turmoil in the market,'' Eiler said. "National City is far better capitalized than other large U.S. banks, and we are fundamentally different than some of the institutions that have failed or have been acquired recently.''

Like other banks, National City's deposits are FDIC insured.

Dave Killa, CEO of Mercer County Community Federal Credit Union, said their organization began getting calls a week ago with questions of depositor's insurance.

"I think with the bank failures there was a lot of concern of who is safe and who is not,'' Killa said.

With an office in Sharon and Hermitage, Mercer County Community hasn't changed its lending style.

"We're lending as we have in the past,'' Killa said. "We haven't put any new restrictions on our membership.''

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