Small daily takes frank look at troubled local bank

For most of the time since the banking crisis hit, more than a year ago, the Institute for Rural Journalism and Community Issues has encouraged community newspapers to report on the health of their community banks, using easily available public information gathered by federal regulators and public-interest organizations. We have no idea how good the coverage has been nationwide, but we think it would be hard to beat what we've seen this week in The State Journal of Frankfort, Ky.

First the newspaper reported that the leading bank in town, Farmers Bank & Capital Trust Co., plans to start repaying the $30 million it borrowed from the Troubled Asset Relief Program, and that its non-performing loans increased from $29 million to $44 million over a six-month period earlier this year, according to the Securities and Exchange Commission. Reporter Paul Glasser also cited a recent report by the bank to the Federal Deposit Insurance Corp., revealing that it lost money in September, after making $4.3 million in September 2008.

Those are the kind of figures that could make depsitors worry about the solvency of their bank. The newspaper confronted those fears and figures in an editorial, saying, "This doesn’t mean the local bank, or its holding company, is on the brink of failure. Most failed institutions are said to have troubled asset ratios of 100 percent." But the editorial also noted that the bank plans to sell stock to repay TARP "at the risk of diluting current shareholders," that the Investigative Reporting Workshop of the American University School of Journalism to report that the bank's troubled assets rose to by more than a fifth this year, and its "troubled asset ratio" was 36.9 percent in September, far above the national average of 14.1 percent." And it went back to the start of TARP, noting that the “Treasury Department insisted the loans were not bailouts of participating banks, merely a helping hand to get sound institutions through tough times. But ProPublica, a nonprofit group of investigative journalists, said some of the banks 'have turned out to be not so healthy.'”

The editorial continued relating the local situation to the national, saying the bank "is in the same predicament as its customers: Even though some economists say the recession is over, the recovery is too weak to make anyone feel especially secure. [It] finds neither businesses nor individuals are in the mood to borrow much money, which inevitably depresses the bank’s revenue outlook," the editorial continues. "If Americans really have resolved to reduce their indebtedness, that’s not a bad thing. Farmers Bank was established in an era of fewer consumer goods when people found it prudent to borrow only if they really needed to, and vigilant bankers kept them from diving in over their heads. It’s past time for financiers, and the rest of us, to rediscover the proven wisdom of living within our means." (Read more)

That's a frank and helpful look (accompanied by a cartoon) at a town's most powerful financial institution, by a newspaper that has a circulation of only 8,000 and is often considered the "local little sister" to metropolitan papers in Louisville and nearby Lexington. While Frankfort is the state capital, it is not metropolitan; it has a population of only 27,000 and a county population of fewer than 50,000, so The State Journal is still very much a community newspaper. It's owned by Ohio-based Dix Communications.

Denver convention programming

Hello from Jacksonville!

Once again, the chipping and wheeling and dealing are over, and we have come up with a great program (we think) for August's AEJMC meeting in Denver.

Many thanks to vice head/programming Andris Straumanis for all his hard work. Now, give research head Joe Marren something to do by getting those papers ready to come in by April 1. Or volunteer to be paper reviewer.

Here is our line up for Denver:

Wednesday
10-11:30 a.m. News coverage and commentary about local government, co-sponsored with Newspaper Division
This session examines the coverage of city government bhy daily and weekly newspapers, TV and radio stations, and citizen journalism sites using a National Science Foundation sample of more than 200 cities.

1:30-3 p.m. Citizen journalism research co-sponsored with Civic and Citizen Journalism IG
This panel will share current research examining citizen journalists, their role conceptions, motivations for contributing content, training, and other areas.

5-6:30 p.m. Media ethics in my little town. Co-sponsored with Media Ethics Division
This session explores the ethical dilemmas facing journalists working in small communities and the implications for ethics educators.

Thursday
11:45 a.m. - 1:15 p.m. Refereed research
Come hear some of the great research being done in this area.

8:30 p.m.: Membership meeting
Part of it will be held in conjunction with CCJIG. Executive committee meeting to follow.

Friday
Noon: J-lab luncheon, co-sponsored with CCJIG.
Progress in the Networked Journalism project, which pairs five news organizations with at least five hyperlocal sites in their communities.

1:45-3:15 p.m. Community newspapers: Healthiest in the trade, but for how long? Co-sponsored with Newspaper Division
Smaller newspapers have not been hit as hard in this recession, and this panel looks at that and also at how smaller newsrooms will have to adapt to a 24/7 world.

3:30-5 p.m. Into the mean streets: Lab community newspapers take on tough neighborhoods. Co-sponsored with CCJIG
Four journalism programs have separately launched lab newspapers and Web sites devoted to immer-city or at-risk neighborhoods. How did they do it? Get the answers here.

(In addition to the refereed research session, we also will have slots in one of the two midday scholar-to-scholar poster sessions.)

This is a great program. I hope you'll come to Denver for it.

-- Doug