Small and midsize banks also face subprime fallout

[kickysnana]

http://www.iht.com/articles/2008/02/26/business/banks.php

NEW YORK: The credit crunch is tightening the screws on thousands of small to midsize banks across the United States, squeezing local builders and businesses that depend on such lenders for financing.

Losses are mounting so rapidly at some of the banks that a small number of them, perhaps 50 of the 7,500 nationwide, could fail over the next 12 to 18 months, analysts said. Other lenders are likely to shut branches or seek mergers as the weakening economy strains their finances.

Local lenders, however, are in far less danger than they were during the 1980s and early 1990s, when roughly 1,600 government insured institutions failed during the savings and loan crisis. But the breadth and depth of the industry's troubles have caught even bank executives by surprise.

<snip>

Mark Fitzgibbon, the director of research at the financial adviser Sandler O'Neil Partners, said the small and midsize lenders may ultimately account for $105 billion, or 15 percent, of what could reach $700 billion of losses industrywide.

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[Hannah Bell]

1. Yeah, everybody's terribly surprised.

They never guessed when they rescinded the banking regulations put in place to forestall this kind of thing, it might lead to trouble.

No, no one had a clue.