Smaller lenders struggling to rally

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While large banks are showing signs of recovering from the financial crisis, many of the country’s small banks are still in big trouble.

Small banks’ efforts to clean up portfolios stuffed with bad loans are forcing them to sell branches, tap investors for fresh capital and restrict lending.

Some have fallen out of compliance with stock-exchange requirements, and others have gotten delisted altogether as a result of their woes. Scores have missed dividend payments owed to the government, which has injected billions of dollars into the banking industry through the Troubled Asset Relief Program.

“I think we have a very bifurcated industry. There are the haves, the have-nots and the walking wounded,” said Dory Wiley, president and chief executive of Dallas-based Commerce Street Capital LLC, a firm that invests in banks and also advises them.

Full Story: Smaller Lenders Struggling to Rally –