In 2011, community banks will revisit many of the troubled loans restructured in the past year.
Among institutions with less than $20 billion of assets, troubled debt restructurings rose 64% as of September 30 (compared to a year earlier). More than a third of such loans fell back into delinquency, making it difficult to determine whether more restructuring will fix the problem or extend the misery.
These figures indicate bankers were a bit too hopeful that giving borrowers a little more time with smaller payments would fix the ongoing problems.
Hope is apparently not a strategy.
Original reference article by Rachel Witkowski in American Banker
Director of Internal Audit
Philip Gonzalez, Director, has over 40 years of experience in the financial services industry, holding a wide variety of executive and senior management experience at community banks and financial institutions.