Analysts warn bank failures loom in Minnesota
June 8, 2009
By MoneyAisle
According to the Star Tribune, analysts are predicting that some banks in the state of Minnesota are facing failure by the end of the year unless the economy improves soon.
“In Minnesota, concern is centered on dozens of small, community banks – most with assets of less than $1 billion – that grew frantically earlier this decade by making loans to real estate developers and builders. Most of their loans were based on overly optimistic assumptions of future home sales and land values.”
Profits for banks in Minnesota have dropped 65% from $292.3 million in the first quarter of 2008 to $101.4 million in the first quarter of this year. About one-sixth of banks in the state have lost money.