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Banks gobble TARP money, suffer losses

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Year In Review

The housing meltdown and recession gave banks in Indiana and across the nation their biggest test in decades.

One major Indiana bank failed. Columbus-based Irwin Financial Corp., whose roots date to 1871, was seized this fall by banking regulators, which sold most of its assets and deposits to Hamilton, Ohio-based First Financial Bancorp.

What did the company in was its national home-equity-loan unit, which went into a tailspin after mortgage markets collapsed, piling up $350 million in losses.

Helping many banks weather the 2009 storm was money from the federal government’s Troubled Asset Relief Program, or TARP. Regional banks that dominate the central Indiana market scooped up the funds, as did 17 banks headquartered in the state.

But financial institutions aren’t out of the woods yet. As the year closed, falling prices for commercial real estate were forcing banks to write off an increasing number of troubled business loans, a trend that’s likely to suppress bank earnings for many quarters.

The tough conditions have led many banks to play hardball with struggling business customers they might have been willing to work with in the past. It also has made many institutions slow to lend, pinching firms that need financing for growth.

Banking observers say the pressures ultimately may spur consolidation, thinning the number of local bank competitors. The area has 559 offices spread among 54 institutions, according to the Federal Deposit Insurance Corp.

“You drive around Indy and, on so many good corners, there are four bank branches,” said longtime local banking executive Steve Beck. “There will be some consolidation.”

So far, the tumult hasn’t led to a big shakeup in bank market shares, FDIC data show. But it has brought a big new player to town. On Dec. 31, 2008, Pittsburgh-based PNC Financial Services Group Inc. acquired Cleveland-based National City Corp. for $5.6 billion.

Before their merger, PNC had no presence here, while National City was No. 2 in the city, with 75 branches in the Indianapolis area.•

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  1. If what you stated is true, then this article is entirely inaccurate. "State sells bonds" is same as "State borrows money". Supposedly the company will "pay for them". But since we are paying the company, we are still paying for this road with borrowed money, even though the state has $2 billion in the bank.

  2. Andrew hit the nail on the head. AMTRAK provides terrible service and that is why the state has found a contractor to improve the service. More trips, on-time performance, better times, cleanliness and adequate or better restrooms. WI-FI and food service will also be provided. Transit from outlying areas will also be provided. I wouldn't take it the way it is but with the above services and marketing of the service,ridership will improve and more folks will explore Indy and may even want to move here.

  3. They could take the property using eminent domain and save money by not paying the church or building a soccer field and a new driveway. Ctrwd has monthly meetings open to all customers of the district. The meetings are listed and if the customers really cared that much they would show. Ctrwd works hard in every way they can to make sure the customer is put first. Overflows damage the surrounding environment and cost a lot of money every year. There have been many upgrades done through the years to help not send flow to Carmel. Even with the upgrades ctrwd cannot always keep up. I understand how a storage tank could be an eye sore, but has anyone thought to look at other lift stations or storage tanks. Most lift stations are right in the middle of neighborhoods. Some close to schools and soccer fields, and some right in back yards, or at least next to a back yard. We all have to work together to come up with a proper solution. The proposed solution by ctrwd is the best one offered so far.

  4. Fox has comments from several people that seem to have some inside information. I would refer to their website. Changed my whole opionion of this story.

  5. This place is great! I'm piggy backing and saying the Cobb salad is great. But the ribs are awesome. $6.49 for ribs and 2 sides?! They're delicious. If you work downtown, head over there.

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