Cornerbank is out from under the thumb of the Office of the Comptroller of the Currency, after reducing its percentage of commercial loans and increasing its capital. Both Home National Bank and Cornerbank entered letters of agreement with the OCC about the same time, one didn't survive and one says they are stronger than ever.
Home National had huge losses in 2009 and could never recover. Cornerbank, which went after growth areas in Lawrence and Kansas City during the boom times, was not nearly in that bad of shape and has apparently weathered the storm.
It is, in a way, a tale of two banks. And a lesson to not get too bullish in the good times.
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48 banks have failed or been taken over by the FDIC this year as of 6/24/11!
The FDIC estimates that failures in 2011 have cost $3.8 billion!
It might be a tale of two banks (actually 3 as Citizens bank of Kansas was also placed under guidance) locally!
But the Sub-Prime and Commercial loan bubble was Nationwide. (World wide when you consider that loans were packaged and sold overseas!)
I think it was more about GREED than being Bullish!
The ironic thing is that the public has been so convinced that taking on debt (home/car loans, business loans, student loans, credit cards) is the only way to get what they want or get ahead. They are more than willing to just sign their name to a loan!
Thats one of the very reasons we aren't emerging from this recession as quickly as in the past and that some types of stimulus no longer have the same effects!
Don't let them fool you or tell you otherwise!
Cornerbank owners probably didn't continue to live a life of greed and excess like HNB did. HUGE difference.
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