A look inside a struggling small bank

The headlines are dominated by the woes of big banks, the likes of Citigroup and Bank of America. But the most vulnerable banks of course are the small local banks, the ones that hitched themselves to the real estate and construction boom. Fortune offers an interesting look at a small community bank in Arizona that stands as a nice proxy for a lot of small, "entrepreneurial" banks around the country. Towne Bank received a cease-and-desist order in March from the FDIC. Sure, the quality of its loans was poor. Unsatisfactory practices plagued its lending and collection attempts. But you know what? No one cared when times were good. For a lot of these banks, the only way to survive will be to return to banking basics with a vengeance. That will have profound local economic implications. On the flip side, Hudson City Savings Bank of Paramus, NJ is thrift and has fared very well.

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- here's the article

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