Why are local banks merging like crazy?
For the most part, local banks didn’t engage directly in the sub-prime fiasco. But they did lend heavily to developers who were selling units based on buyers getting loans, buyers flush with cash from a refinancing or buyers with a job in an industry that relied on consumers spending like mad. Then late last year they looked in the mirror and had an “uhh ohh” moment. Now they want to make sure you can pay back your loan, and want to make sure a business is on solid footing. And within the last month, six Virginia banks have paired up faster than high schoolers on prom night. Business owners, meanwhile, say their local banks are becoming dangerously stingy — in some cases even threatening the lifeblood of business. Late last week BizSense sat down with the the founder of Strategic Risk Associates, a consultancy that helps banks address risk, to discuss the state of local banking and what it might mean for local businesses. Below is an edited transcript with Michael Glotz and his busines
