Hovde noted that larger banks are lending but said “community banks are seeing nothing but pain.” He said the minute that they add any commercial real estate or land loans to their books, their examiners downgrade the loans.
In response to a question at the event, whose theme was “Finding Opportunities in a Challenging Environment,” Hovde said that regulators are unlikely to approve any new bank charters; instead, they’d prefer that groups with capital to invest do so in an existing bank.
He said that of the approximately 100 banks that have opened in the Atlanta area in the past 10 years, more than 60 could end up failing. That’s partly because they became dependent on hard-hit construction and development loans, a business segment where smaller banks traditionally find it easier to compete with bigger banks, he said.
The FDIC is opening a Schaumburg office with up to 500 temporary staffers and contractors who will help manage receiverships and liquidate assets from failed Midwest banks.
Bad news for voters. We’ll now have to listen to Alexi G again tell voters how bad the economy was to cause the failure of Broadway Bank.
Of course, he’ll leave out the facts of: management incompetence, i.e. concentrating all of their business with developers; dealing with borrowers of known questionable character issues like felons; he and his family draining $120+ million in dividends, leaving the bank undercapitalized; and his bank’s failure costing us taxpayers over $394 million to make depositors whole.
I wonder where Mark Kirk banks. I think it’s the First National Bank of Military Records Embellishment at the corner of Lies and Deception, right across the street from The Closet Store and The Resume Depot. Then again, I’m sure this story will change, too.