The Wonderful Dullness of Small Banks

David Segal writes about a topic that’s near and dear to our hearts—the boring stability of small banks. There are tons of little banks across the country that have barely noticed that credit crisis. Their businesses are boring and predictable, plus many of them are publicly traded.
Segal quotes a small-town banker:

“I was on vacation in California and this guy I had just met said, ‘So, traveling on that bailout money, huh?’ ” said Blake Heid, of First Option Bank in Paola, Kan., which didn’t take any bailout money. “I didn’t find that very amusing.”
Though they greatly outnumber the national and regional banks, community banks have barely registered in any of the fallout from the credit crisis, in part because they hold less than 10 percent of the $13.8 trillion in bank assets nationwide.

A few years ago, I wrote about three high-quality small-town banks. Not a single analyst followed them. Not long after I highlighted them, all three were bought out.

Posted by on May 12th, 2009 at 1:31 pm


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