SAN DIMAS, Calif. — As it divvies up its $700 billion relief plan, the Treasury is dividing banks into two categories: healthy enough to save and too-far gone. So said Dwight Johnston, Western Corporate FCU's vice president of economic and market research, during his Oct. 13 weekly economic podcast, OnDeck, and again on Oct. 15 to Credit Union Times.

Johnston also predicted the demise of some large, name-brand regional banks during the next few months, saying that some banks simply have too many losses to save. Additionally, despite lawmakers' and banks' best intentions, many bad mortgage loans have such poor underwriting, they can't be saved by refinancing, recasting or even more creative solutions. California, Ohio and the Southeastern U.S. will be the scene of the biggest conservatorship shockers, he said.

"We're talking banks with a lot of real estate lending, with residential, commercial and construction loans. That sort of top-heavy loan makeup," Johnston said. "Big regional banks, especially those that were trying to expand into national banks and went into hot areas and did a lot of lending are prime candidates."

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