District Banker

Banks are No Longer Failing

Silly article.

Big banks were failing for different reasons than community banks. The community banks that have failed did so (generally) because they made big bets on real estate in their (confined) market footprint. When things go sour in their local economy, it doesn't take much to drag the bank down. If you don't believe me, ask yourself why we've had clusters of failures in particularly weak geographic areas (GA, FL, etc).

Community banks are no longer failing for two reasons. Either:

1. The government gave them TARP $ to fortify their balance sheets and try to attract deposits or,

2. Because of the tax change regarding NOLs in acquisitions, it is now FAR more attractive to buy a failing franchise than it was prior to the tax code change.