ABA Banking Journal - June 2010 - (Page 38)
Cover story | part two: banks and thrifts under $3 billion Satisfy Yourself AND Your Regulator. CRE Stress Analytics© exposes credit risk at the instrument level while satisfying regulators’ demands for global stress testing. FIMAC Solutions adds value, not just regulatory response. CRE Stress Analytics© and Construction Stress Analytics© FimacSolutions.com ies around the country—including Los Angeles; Washington, D.C.; and New York City. The acquisition of Mutual Bank and its 12 branches via an FDICassisted transaction brought Central Bancorp into Chicago. This transaction also allowed Central Bancorp to book a $271.4 million gain, contributing to a $158.4 million increase in the holding company’s net income relative to 2008. The acquiring bank or thrift realized benefits from more than just the bargain-purchase gains associated with these deals. Growth in the acquiring institution’s customer base was often translated into growth in fee income. For example, Merchants Bank of Indiana (headquartered in Lynn, Ind., and No. 8 among large S-corps) experienced an increase of 73% in net servicing fees and deposit service charges, combined. In addition, some institutions used acquired deposits to reduce more expensive borrowings, as at Tri City Bankshares, Oak Creek, Wis. (No. 9 among large non-S banks and thrifts). The company reduced its total borrowings by 54%, compared to an average decrease of 18% among all large non-S banks. looking ahead A s we r e a c h t h e h a l f way point of 2010, it is clear that the macroeconomic environment will remain challenging (though there are some signs of improvement). As the examples above have shown, however, it is still possible to achieve growth in tough times. In 2010, community banks and thrifts should continue to focus on markets or lines of business that they know well, stay connected to their customers and communities, and, of course, pursue strategic acquisitions. n 38 | ABA BANKING JOURNAL | june 2010
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