I posted an article today about a bank in Massachusetts. I did not give the name of the bank because I wasn't sure how public the information was. I had some of it wrong, I thought the bank was in a different city. Anyway, Fox News has come out with the story. So here is the missing information.
The bank is East Bridgewater Savings Bank which has no delinquent loans or foreclosures on its books. The bank didn't even need to set aside in money in 2008 for anticipated loan losses. From late 2003 through mid-2008, East Bridgewater Savings made an average of 28 cents in loans for every dollar in deposit -- a sharp contrast to the 90 percent average loan-to-deposit ratio among similar banks.
The FDIC recently criticized this bank for not lending enough, slapping it with a "needs to improve" rating under the Community Reinvestment Act, the Boston Business Journal reported.
According to the article:
"East Bridgewater Savings ended 2008 with $135 million in assets, deposits of $84 million, $87,000 in profit, and a Tier 1 risk-based capital ratio of 31.6 percent -- more than three times higher than many community banks in Massachusetts, the Journal reported."
It seems to me that this sort of behavior on the part of the bank should be praised--not criticized. It used to be good business to lend money only to people who were likely to pay it back!
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