by JQ Adams

Created on: August 11, 2009

With the banking crisis still in full swing, the press always goes to the huge banks and financial institutions because big numbers draw eyeballs and fascinates people with their mind boggling scope. Of course the fact that these huge banks are important to our economy and way of life adds to that being a legitimate reality, and will continue on that way.

But what has quietly emerged in the midst of this turmoil is opportunity, and that opportunity is for community bankers who are thrilled to enter into the fray and offer up solid loans to qualified buyers, gaining strength and generating business they wouldn't have otherwise received in more normal economic times.

With the large banks and financial institutions fighting for survival and having to wind down many of their assets, they haven't had much time to focus on building up new, solid business.

So at the time the large regional banks are cutting back on lending until they get back on solid ground, the smaller local banks are gaining market share and strengthening themselves even more.

CEOs of smaller banks are reporting the banking environment at this time is wild, and they're really making some strong moves to shore up their loan portfolios and positions. Demand has been incredibly strong for loans, and local banks are in the best position to provide them, and they're doing it in a good and healthy way.

To show how strong this is, a number of local banks in a variety of areas in America have enjoyed increases in loans of over 10 percent in just a three-month period ending on June 30. That's tremendous growth by any measure, and would of course work out to 40 percent increase of loans for the fiscal year if it continues at this pace.

This is important because the large regional banks, in most cases, aren't even close to turning things around, and are still fighting to survive, and continue to wind down, or sell off, their assets.

For example, in most loans by the nation's largest banks dropped in percentages, from between two to three percent in many cases. So that means not only are the local banks picking up that business, but they're also the ones generating new loan business as well.

Over the long haul this should be good for the health of our financial institutions, as it'll spread the loans out more, and provide more competition in a way that should help prevent failures of this type from occurring in the future. Banking failures will always happen because of the quality of management, but failure at the current level came from reckless and crowd thinking which everyone one followed one another off the cliff, as far as the large financial institutions go.

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