regions bank -- and how are your banks doing?

[rockriver]

we live in the southeast where regions bank has been a major player.
our county was a popular bedroom county to a much larger city.
the county was growing. our school system was excellent and helped
draw incoming folks. we are attracting new business. walmart opened a supercenter.
we also have a large farming community.
--
2 or so years ago banks were getting into trouble. i walked into regions and
talked with the manager. he was confident regions was in no trouble.
he assured me that regions had "no exposure" to any of the mortgage troubles
or any of the cdo or other buzz word initials for the banking industry instruments.
he laughed. not condescending. but letting me know, clearly, that it was silly
to think that regions was in any trouble. he also emphasized that his branch,
was very strong and prospering along with the county.
--
about that time i learned about bankrate.com (where you can check the
status of your bank)
regions was a 4 out of 5 where 5 is a top score.
the other major bank in our area is suntrust. suntrust was a 3 which surpirsed me.
--
last week we got a letter from regions saying that they are "closing" the local branch.
it is the only regions bank in our county.
i haven't checked regions on bankrate recently. but a couple of months ago, it had falllen from
a 4 to a 2.
real bad indicator.

what say ye about the banks in your area?

[monkeybird]

That's interesting. We have Regions Bank in Florida also. I'll have to check it out.

[claymore]

Hope things work out for you and thanks for the site.

[610Alpha]

From what I learned from Dave Ramsey is that you bank with local banks and/or credit unions. Both usually offer better customer service and that has been my experience. Big National banks are lousy at customer service usually.

[Bill Foster]

Living in Georgia has been interesting. Here is the news from Labor Day Weekend. Patriot Bank of Georgia in Cumming, Ga. and CreekSide Bank in Woodstock, Ga closed last Friday, Sept. 2, 2011. (Both are affluent suburbs of Atlanta) That brings to the total of banks closed in GA to 70 for this year, with 3 months to go.
Back in 75, many GA banks ran into trouble. They were foreclosing on so many homes, their assets outgrew their income and many came close to default. The same banks were reluctant to loan money to people to purchase homes. Back then I purchased my first home from the FDIC because the bank that had the builder's loan had gone broke.
In the past couple of months I have noticed the resurrection of a lot of old GA bank names long gone after buyouts, such as The First National Bank of GA, which eventually became Wachovia and now Wells Fargo. Another bank name from the 70's is Citizens and Southern Bank; again, a bought out name from years ago. I suppose, the names and charters don't go away and are pulled out of the hat when needed, perhaps by FDIC? Don't worry, your money is safe...we'll just print some more if we run out.

[Bearman202]

The real problem here is that too many banks are holding mortgages that will never be paid. As it stands, if the bank still has the mortgage, (even though it's in default) it's counted as an asset. It's numbers on a page. If they write off the mortgage, it's no longer an asset, and becomes a loss. The last I read, there are over 6 MILLION homes in the U.S. that are in default, and no payment has been made for over a year. Banks have stopped foreclosing, because as soon as the occupants move out, the neighbors move in and strip-mine the house for copper, appliances, etc. and the house becomes unsalable. Worse, it becomes a nuisance. Deutchebank actually got sued by Cincinnati (?) because they had so many houses that were a nuisance there. The latest trick is for the bank to donate the house to charity, then take the write-off on their taxes. At least that way they get SOME value out of the property.

The real problem right now is that there is no way to know how many bad loans the bank is holding. They're not saying. Again, though, as long as they're holding the notes, they count as assets, and the bank can use those number as part of their reserves. If they go away, then the bank has to actually come up with something of value, and they don't have it. If they can't meet their reserves, they become officially insolvent. Again, the real problem is that we're not getting the real numbers. I think the bottom is going to fall out, and relatively soon. It's going to be a wild ride, and some of it is going to be through some raw sewage. All that said, you're still better off with a local bank. Warren Buffet just dropped 5 BILLION dollars on Bank of America, and they're still in the toilet. He's making big money on interest, but who knows if he'll ever get it back?

[monkeybird]

Here in Florida I use a local credit union that has been here for years and years. However, in Alabama I opened an account with a small local bank with plenty of hometown friendliness. Just a year later the bank became the Royal Bank of Canada (RBC). The local banks could not survive in the climate after the banking collapse of 2008. Now we're looking at the BIG banks, those we bailed out, failing.

[All Talk]

As a former banker, I can tell you that branches are neither "strong" nor "weak" from a solvency point of view. The entire bank itself is what matters. Bracnhes are opened or closed because they are individually profitable or not. closing an unprofitable branch might be a step in the right direction to improve the strength of the bank itself.

Sellling a branch, on the other hand, to another bank, could be an indication that the bank is in some cpaital trouble and despearately trying to shore up matters by shrinking.