Since the financial crisis of 2007-2008, referred to as the Great Recession, banks are under greater scrutiny because of the extent of the massive numbers of home foreclosures as a result of the collapse of the subprime market. Home loans were guaranteed when there was no clear evidence of the consumer being able to afford the loan at the prime rate of interest. Thus, the rules were changed allowing mortgage loans to be offered at subprime rates, risking default.
Over the last ten years, banks have become very stingy in making home loans as a result of the near-collapse of the banking system. NexBank is the 14th largest bank in the state of Texas, headquartered in Dallas which provides nationwide financial core services such as Commercial Banking, Mortgage Banking, and Institutional Services. NexBank does not provide consumer services.
Nonetheless, John Holt, who is the President and CEO of NexBankCapital Inc., is very concerned about Community Banks. He served as a panelist at the Texas Bankers Association’s 5th Annual Strategic Opportunities and M&A Conference in New Orleans, Louisiana which discussed the Community Bank crisis.
According to the Independent Community Bankers of America, small and local banks have declined since the Great Recession. Some believe that community banks were squeezed out of the banking system due to the Federal oversight of a bank which subjects banks to certain requirements, restrictions, and guidelines.
NexBank is a corporate or a “wholesale” bank and community banks are “retail banks.” The corporate bank, such as NexBank, has a range of clients from small to mid-sized local businesses to large conglomerates with billions in sales. The community banks, unlike the corporate bank, provides the consumer checking and savings accounts, Certificates of Deposit, mortgages on residential and investment properties, automobile financing and credit cards.