REGION WELCOMES NEW OWNERS FOR FAILED BANKS

After two years of financial woes, the Exchange Banks are no longer. Following months of speculation and struggle, the Division of Finance closed and liquidated the banks late Thursday. On Friday, all five former Exchange banks reopened under new ownership.

Our communities were greatly affected by these events: Cape Girardeau and Jackson were home to two of the banks. Shareholders lost money. Customers were anxious. The business community was unsettled. Some employees were displaced.

But the Missouri Division of Finance facilitated the transition with professionalism. There was no panic; no run on the banks ensued. Customer deposits of up to $100,000 each were safe ensured by the FDIC. Exchange Bank checks were honored. It was nearly business as usual Friday morning.

But questions still remain. What happened to send these banks into fiscal failure? Commissioner of Finance Earl Manning blamed poor management and unpaid loans at the heart of the banks' demise. Criminal proceedings may grow out of the investigations.

It marked the first bank closings in the state of Missouri in two years. But the commissioner of finance feels the Exchange Bank failures will not a trend make. He sees the overall banking picture improving, and says no other banks are targeted for closure in the state this year. That's reassuring news.

Also heartening is the fact the region remains a strong banking market. No fewer than 10 banks or holding companies bid for the assets and liabilities of the closed banks. That spirited bidding reflects the strength of the local market.

When it was all said and done, Cape Girardeau welcomed a brand new banking company. Commerce Bank of Poplar Bluff purchased the Cape Girardeau Exchange Bank. A familiar name Boatmen's also strengthened its market share with the purchase of the Jackson Exchange Bank. The solid reputations of both new owners should help reassure local banking customers.

The flurry of banking activity last week also provided a grim reminder of the S&L debacle. After all, the national crisis had touched us too, with the closing of two savings and loans here: Colonial Federal and First Federal.

The new banks are well managed and well capitalized, said the commissioner of finance. But it may take a while for consumer confidence to fully return. Insolvent banks are an oxymoron. It's not supposed to happen. We can only hope that others in the banking and savings and loan industries can benefit from these mistakes. We have had our share of financial institution liquidations. Hopefully, it will be the last closing for many years to come.