Not sure how I missed this but good series over at the Trib outlining lending in Minnesota and the small local banks that got involved in “loose” lending.
Some local neighborhood subdivisions have hit a wall as far as construction goes and for some borrowers with great credit it is next to impossible to grab a business loan.
Will have to get out to a few of the neighborhoods mentioned in the article and get some video.
Most definitely got over their head and this quote says it all from the article: “”Real estate is the cocaine of the banking business.” Hopefully lessons learned but will take years to recover.
From the StarTrib
In Minnesota, regulators have seized and closed two banks since 2008 and have ordered 16 others to clean up their balance sheets. Another 65 of the state’s 430 banks and thrifts are on a secret watch list, and state banking officials expect more to fail as they are pulled down by bad real estate loans.
No doubt small local banks bet heavy on commercial and residential real estate, often leveraging themselves to the point with hardly any assets on the books.
Minnesota Bank Failure Poll
If you haven’t already please read the article first, but based on predicted amount of closings… how many do you think will shut this year?
photo cred startrib
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