The Independent Community Bankers of America® (ICBA) and its nearly 5,000 community bank members are kicking off ICBA Community Banking Month by encouraging small business owners and consumers to bank locally with a community bank. By doing so, customers will make a hometown investment they can be proud of because community banks put local deposits back to work right where it belongs—in the community.

“Community banks help area families achieve financial stability while also driving small business lending in their communities—all of which helps their local economy and community to thrive,” said Bill Loving, ICBA chairman and president and CEO of Pendleton Community Bank in Franklin, W.Va. “Throughout the month of April, our goal is to celebrate the unique role that community banks serve in our nation’s economic system while helping to educate consumers and small business owners about the benefits of banking locally with their community bank.”

By driving local economies and creating local jobs, community banks are an integral part of our nation’s financial system. With nearly 5,000 members, representing more than 24,000 locations nationwide and employing 300,000 Americans, ICBA members hold $1.3 trillion in assets, $1.1 trillion in deposits, and $800 billion in loans to consumers, small businesses and the agricultural community. There are almost 7,000 community banks, including commercial banks, thrifts, stock and mutual savings institutions, with more than 50,000 locations throughout the United States. Assets may range from less than $10 million to $10 billion or more. Community banks constitute 96.8 percent of all banks.

Read the full press release from the Independent Community Banks.

In a nation obsessed with home ownership, savers have long been let down by policymakers’ one-eyed focus on mortgage interest rates – never more so than today in this era of unprecedented monetary stimulus when millions of savers are earning negative real rates of return on their money. But while personal savers are beginning to build up a head of steam as they protest at the raw deal they’re getting, who is looking out for the interests of small businesses who hold money on deposit?

To the editor:

The Independent Bankers Association of New York State welcomes a new study released by Gov. Cuomo and state Financial Services Superintendent Benjamin Lawsky which found that community banks provide most of the loans for small businesses and small farms in New York.

We believe the study reinforces the fact that New York’s local, independent community banks know our customers, understand our markets and are strongly committed to reinvesting in their future. With locally based ownership and a commitment to our communities, we are very close to the economic pulse of New York’s cities, towns and villages.

The study notes that with less than a quarter of all bank assets in New York, community banks generate more than half of all small business loans and nearly all the small farm loans in the state. Indeed, the state’s smallest banks, those with assets under $1 billion, account for almost 28 percent of all small business loans and 43 percent of small farm loans in New York.

Read the full article on small bank importance here.

Community banks are finding ways to do more with less when it comes to staffing branches.

Banks have long sought out ways to control costs but there is greater urgency now as branch transactions decline and earnings face intense pressure. So more banks are eager to reduce head count, industry experts say.

Every bank with at least five branches must be considering efficiency efforts, says Jamie Eads, senior project manager at Bancography. “Everyone is trying to get the most bang for their buck.”

Staffing expenses often account for two-thirds of a branch’s costs, Eads says. So reducing staffing, even if it involves trimming the equivalent of half of a position, can help the bottom line. “Banks are compelled to adjust their costs based on revenues,” says Judd Caplain, KPMG’s advisory leader for banking and diversified financials. “That’s driving a lot more innovation.”

Banks collect a range of data as they study branch staffing, using the results to determine the best way to allocate resources, industry experts say. Managers must consider all sorts of items, including branch volume and transaction types, process times and the number of deposit accounts per full-time employee

Read the story here at Bank Investment Consultant.

I’m not saying the Big Banks love the 2010 Dodd-Frank financial regulation bill. I’m saying they can live with it — and that their smaller competitors cannot. Thus, the law will cause more consolidation in the financial sector, possibly leading to more instability.

This is part of what JP Morgan chief Jamie Dimon meant when he said Dodd-Frank would expand the “moat” around the big banks. This is what the Columbia (Mo.) Business Times reported on, regarding the regulatory threat to small banks. This is part of the reason Wall-Street’s lobbyists talked Republicans out of trying to repeal the law.

Bloomberg News has the latest report on this front [emphasis added]: Small banks will seek mergers because their management teams are aging and new regulations are too costly to bear, [investor Joshua Siegel] says.

“If you need one major overriding theme of the industry in the next three, five, seven, 10 years: massive consolidation, thousands of banks,” says Siegel, whose firm managed $5.1 billion as of the end of last year and invests in small banks. In the U.S., “I do see probably anywhere from 2,000 to 4,000 banks being swallowed up, and what you’ll see then is a more-concentrated system.”

The US government is going to kill the small banking industry in the US. The  irony is hard to miss. It was not the small banks that threatened the financial  system in the crisis of 2008. Yet they will bear the brunt of the regulatory  costs imposed in its wake. The end result will be that US banking assets will  collect into the hands of even larger banks.

The Death of the Small Bank in the US?.

Delinquent and defaulting mortgage loans to struggling US borrowers have become big business on Wall Street, as investors scoop up bonds backed by non-performing loans (NPLs), writes Adam Tempkin.

With millions of borrowers still under water or facing foreclosure, real estate investment trusts (REITs) and others are snapping up NPLs at a discount, hoping to earn returns from their eventual resolution or liquidation.

And the more value that can be extracted from each loan, the better the returns – which means it is in the interest of investors to work with troubled borrowers to find solutions.

Read the full Reuters press release here on bad loans.

The unit being sold purchases home loans originated through correspondents  and brokers, a business Ally and other lenders’ have scaled back in over the  last two years. The deal covers about 300 mortgage professionals, 1,770 “active  client relationships” and intellectual property tied to the business, Ally  said.

Neither Ally nor Walter disclosed a price for the deal, though a spokeswoman  for Ally said the amount wasn’t material to the company. The deal is expected to  close Feb. 28.

Read the complete story about Ally Financial here.

Hundreds of European banks are rushing to repay cheap loans they borrowed from the European Central Bank a year ago, in a show of confidence that financial markets are returning to health three years into the region’s debt crisis.

The ECB will get back €137 billion ($182.2 billion) from 278 banks on Jan. 30, the first day that the three-year loans can be repaid—and nearly two years before they are due—the European Central Bank said Friday.

That represents more than one-quarter of the €489 billion that banks tapped from the ECB in December 2011. Banks borrowed an additional €530 billion in a second installment of three-year loans last February, bringing the total to more than €1 trillion.

The ECB didn’t provide a breakdown in loan repayment by bank or country. Roughly one third of the money that was repaid came from Spanish banks, according to a person familiar with the matter.

The data provide one of the clearest illustrations to date of the surprisingly swift healing of large swaths of the European banking system. It removes a major impediment to a gradual recovery of the broader European economy, which hinges on the health of its banks.

Read the story here at The Wall Street Journal.

That is the one-word answer given by Yale University professor and noted housing and markets expert Robert J. Shiller when asked to describe the current state of the U.S. housing market.

“It’s going up in the short run. What it will do in the longer run is hard to say. Maybe it will go down,” Mr. Shiller said in an interview on the sidelines of the World Economic Forum annual meeting in Davos, Switzerland.

Housing is still a “somewhat risky investment,” said Mr. Shiller.

Asked if his view is more pessimistic than others who see housing prices and sales rebounding after a late-2000s collapse that ignited the financial crisis, Mr. Shiller responded that those who study housing closely don’t have extremely rosy views.

“Experts do not seem to think, any of them, that we are going back to the same boom,” he said. There might be “cheap talk” that housing is “off to the races again,” but people “who think about it seriously doubt it,” Mr. Shiller said.

Read the story here on the housing market called “neutral”.