Troubled Bank List May Present Opportunities, Lawyer Jerry Blanchard Says

As we pointed out earlier today, the FDIC announced that its list of troubled banks is the highest it has been since 1992.  Jerry Blanchard, a partner in Bryan Cave's Financial Institutions Client Service Group, observes that the “collateral damage from the collapse of the credit bubble and the residential real estate bubble continues to cause bank failures across the country." He also points out that, "The sunbelt, from California to Georgia, is overrepresented in the numbers but you also see significant bank failures in other states such as Illinois. We expect that

the number of bank failures will peak this year, and things will slowly get better after that." 

Blanchard, a former associate general counsel at Bank of America, believes that now is a great opportunity for investors to acquire insolvent financial institutions. "By providing loss-share agreements, the FDIC is basically back-stopping losses, which makes it very compelling to acquire troubled banks," he says.