Small Charlotte area banks still haunted by bad loans

The six community banks based in Mecklenburg County are still struggling to tame troubled loan portfolios, as the economy and real estate markets continue to sputter, federal data show.

Five of six saw their troubled loans increase compared to the first half of 2009. Half the banks have posted losses so far this year. And while some large banks, including Charlotte's Bank of America, have begun to reduce their cushions for bad loans, all but one of Mecklenburg's small banks continued to sock away more money for potential losses.

Unlike the big banks, the small players can't turn to more profitable business lines or regions when the local economy falters.

"We're not out of the woods by any stretch," said Frank Knautz, a community banking consultant in Florida. "There are several quarters of challenges ahead for banks of all sizes. No one is immune to what has happened here."

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