While the Giants Reel, Many Small Banks Are Thriving

Financial giants are wobbling. Lending is tight. The FDIC is murder on start-ups. But there's never been a better time to open a small bank

Bob Croslin for TIME

Last fall, soon after Congress decided it would spend $700 billion to shore up the nation's flailing financial system, about 100 shareholders of Reunion Bank of Florida gathered for a party. Over crab fondue and London broil, they toasted the start of their spanking new bank. It had been decades since a locally grown bank had opened in Tavares, an old citrus hub about an hour by car from Orlando. "We had folks drive from 45 miles away," recalls Reunion co-founder and CEO Mike Sleaford. "Everyone was so excited."

Partying bank investors? That doesn't seem quite right. Since September, the bad...

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