Local and regional banks could see opportunity in the midst of financial troubles for giant lenders
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By DAVID DELLECESE
Story Created:
Jul 15, 2008 at 4:42 PM EST
Story Updated:
Jul 15, 2008 at 5:21 PM EST
Federal regulators are getting ready for dozens of American banks to fail over the next year, leading many to question just how many banks could fall apart, and which one is next?
It also has many wondering just how their own, local banks would be affected.
The big boys of banking may be finding themselves in some tough spots at the moment, but believe it or not, it's actually a good time for your local and regional banks.
Dr. Zhaodan Huang, assistant professor of finance at Utica College says that while the big boys of banking may be having a tough time, it's good news for the smaller, regional banks, and now is the time for them to be taking advantage of the opportunities this now presents them.
He says that while immediate profits won't increase greatly, the market shares for these regional banks will see a significant rise.
And while in places like California and Florida housing prices have plunged 10-30%, he says we're actually in a spot to see some stability.
"In upstate New York, for example - Rochester, Syracuse, Albany, and Buffalo - essentially is the only several cities you're going to see housing prices in a stable or actually rise up a little bit," Huang said.
President and Chief Executive Officer of Adirondack Bank, Gary Kavney says "With us, it's business as usual. As part of the upstate economy, we're finding ourselves stable at this point. We are not finding any marked changes as it relates to our clients."
Kavney went on to say that in his meetings with other upstate bankers, he's hearing words like stable quite frequently, which is great when compared to other parts of the country where that hasn't been the case at all.
And with the big boys of banking scaling back their own business by a significant amount, more and more customers are turning back to their local and regional banks, leading to a lot more opportunity for both the bank...and the customers.
So take advantage of it while you can.
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