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Specialized business models are what regional banks are all about.

  • Here in S Jersey, regional banks fill the gap where summer homes are often multi-unit properties with not heat etc. it’s hard to get a loan from a national bank
  • In Texas, regional banks fill the gap where wild cate oil drillers etc. find it’s hard to get a loan from a national bank
  • In other places it getting a farm loan to cover a corn crop you haven’t harvested, or fishermen getting a loan for the season before they catch any fish.

Specialized customer-base aside both banks faced the same basic set of problems

  1. Since 2001 US Treasuries have paid tiny tiny rates
  2. Since Dodd-Frank regional and other banks are forced to make those tiny-tiny-rate-bonds a mainstay of their balance sheets
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  3. When rates eventually go up, long-term bonds keep their long-term value but their “sell-now value” drops. -->Which does not matter at all, unless you have to cash them in early.
  4. Both banks were faced with a need to sell or mark-down their long-term bonds early, reportedly the mark-down was not so large as to cause insolvency BUT led to a panic which did.