Modesto Bee: Small, locally owned banks say customers are flowing in

[marmar]

Small, locally owned banks say customers are flowing in
Customers reportedly bailing from big banks

By Eve Hightower
[e-mail]


Chris Courtney can see the effects of big bank failures from his office overlooking the busiest intersection in Oakdale.

Residents literally have walked out of Washington Mutual with cashier's checks in hand, crossed the street and opened accounts at Oak Valley Community Bank.

"We've had a net inflow of deposits," said Courtney, president of Oak Valley Community Bank.

Courtney and other officials at community banks in the Northern San Joaquin Valley have seen money flow into their vaults over the past few days, but, like Courtney, they prefer not to speculate why.

"We're just starting to track it," said Thomas Smith of Merced-based County Bank.

"I wouldn't be surprised if they are seeing more deposits from customers leaving big banks like Washington Mutual," said Jeff Michael, the director of the University of the Pacific's Business Forecasting Center.

Community banks credit their conservative approach to lending and their close relationships with customers for largely avoiding the troubles that thrust Washington Mutual and Wachovia into the headlines.

"When you work for a community bank, customers see you walking down the street. When they look into your eyes and ask if their money is safe, you want to be able to say 'yes.' That's the difference between a Wall Street banker and Main Street banker," Courtney said.

Community banks' nature means they don't make the big bucks in good economic times, but they survive the bad times. .......(more)

The complete piece is at: http://www.modbee.com/local/story/448441.html

[burythehatchet]

1. THIS is the beauty of the market, and an expression of the common wisdom

of ordinary people. All economics MUST return to a local scale; it's the only real path forward.

[The Backlash Cometh]

4. And you think the local market is any less corrupt?

I don't know whether to laugh or cry.

[DeschutesRiver]

8. In my area, it would be the kiss of death to do this

of course, we suffered from the building boom syndrome big time in some areas here. The local banks? Up to their eyeballs in quickly defaulting debt as multiple builders file bankruptcy.

Some of these local banks are totally insolvent, and others are teetering. You just can't assume that because it is a local bank, that it didn't do foolish things. There "local" banks who also invested in real estate in other states, places where home values are falling apart. I was shocked at how wildly risky some local banks here got during the boom times.

[burythehatchet]

11. Are you serious?

A local bank financing a local mortgage is a somewhat healthier eco-dynamic than a home buyer purchasing financing that is a digital transaction carried out by a set of banks all over the world. EVERYTHING has to migrate to a local scale including food production, financing, education and general governance.

[The Backlash Cometh]

12. Then we are lost.

I DO live in a Republican county in Florida, however, so maybe there are local areas outside this state that work the way you describe.

[bullwinkle428]

2. As a kid growing up in the 1970s, I really don't recall the presence

of ANY of the big, national mega-banks, as places to handle your money (NOT talking about investment banks and the like). It seemed to me that nearly everyone did their business with small, locally-owned and operated banks!

Edit to add: I've kept my money with a small, local credit-union through my entire adult, working life, and have no desire to change now!

[louis-t]

3. Not many local banks left around here.

All were swallowed up. I'd have to use a local credit union. That might work. I hate BOA, which swallowed LaSalle, which swallowed Michigan National, which swallowed First of America, which swallowed Community National.

[marmar]

5. You forgot Standard Federal swallowing Michigan National, then got swallowed by LaSalle...

.... I hate BofA too.

[louis-t]

10. Ooooh, forgot that one. I kept looking at it

thinking I missed one. Thanks.

[Gregorian]

6. Are the small banks less prone to failure?

I do see in the article that it's not just the size of the bank. Argh, I don't like having a small fortune in WaMu.

[Hydra]

7. No but they are loaning, unlike the whiny oversized crybabies

And with more money on the books, they can loan more out. If we don't bail out the big banks, they'll have to get with the program or miss out.

And as someone said further up, this is how the market is SUPPOSED to work. If you can't hack it, someone else will offer the service.

[Gregorian]

9. Yeah, I just got off the phone with Mendocino Savings Bank.

They haven't had any of the troubles the bigger banks have had. I think pulling money is going to be another problem for them.

Now I'm seriously thinking that the smaller more conservative bank is where I want my money. Not even from a safety point, but that they should be rewarded for their good behavior.