The past three years have been challenging for commercial lenders, particularly small community banks. Massive losses, occasioned by the collapse of the real estate markets for both commercial and residential properties, have eviscerated the balance sheets of many lending institutions. Many banks continue to labor under the burden of regulatory enforcement orders and balance sheets laden with non-performing assets. Provisions for loan losses depleted equity capital, in many cases to levels the regulators deem less than adequate. As a result, many banking institutions need to raise capital to comply with federal regulations, supervisory directives and enforcement orders.

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