The recession has negatively affected many businesses in this country, whether they are big or small.

The lead article in The Wall Street Journal on Feb. 24 reported, "U.S. banks posted their sharpest decline in lending since 1942 at the end of last year, suggesting that the country's continued slide is making it hard for the economy to recover."

While top-tier banks are recovering at a faster clip, the rest of the industry is still suffering, according to a quarterly report from the Federal Deposit Insurance Corp.

The Journal article said, "Bank are fighting for survival, especially those plagued by losses on commercial real estate, and are less willing to extend loans, siphoning credit from businesses and consumers."

The pattern of lending among four local banks -- GreenBank, First Tennessee Bank, Greeneville Federal Bank and American Patriot Bank -- in recent years parallels that of banks nationally.

Those local banks have had their outstanding loan totals rise when the economy was growing, but then saw drop-offs when the economy declined.

However, there was no such drop-off in lending during the last couple of years among three other Greeneville-based financial institutions -- Andrew Johnson Bank, Heritage Community Bank and Consumer Credit Union.

GreenBank, whose headquarters is in Greeneville but which has more than 60 offices throughout Northeast Tennessee and Middle Tennessee, reported these outstanding loan balances during the 2005 to 2007 boom period:

2005: $2.01 billion;

2006: $2.17 billion;

2007: $2.35 billion.

During that boom period, the total of GreenBank's outstanding loans increased by 17 percent.

However, GreenBank experienced a negative trend in its total outstanding loan balances from 2007 to 2009, as follows:

2007: $2.35 billion;

2008: $2.22 billion;

2009: $2.04 billion.

Jim Adams, a GreenBank senior vice president, observed, "As the recession began to have its influence on people, businesses and markets during the waning months of 2007, regardless of our efforts to help stimulate the economy, our portfolio began to shrink."

Adams added that in both 2008 and 2009, GreenBank has "had to charge off $50 million" in loans in which repayment is unlikely despite the bank's efforts to obtain repayment.

First Horizon Corporation, parent company of First Tennessee Bank and a major regional bank, reported First Horizon's total outstanding loans were strong in 2005, 2006 and 2007, but dropped off in 2008 and 2009, as follows:

Tony Nix, First Tennessee's community bank president here, said the figures "reflect the impact of the recession."

He added that over the years he has noticed that this region's economic figures "typically follow those of the state and nation by up to six months or longer."

Similarly, Greeneville Federal Bank's total loans outstanding increased from 2005 to 2008, but then declined from 2008 to 2009, as shown here:

2005: $129.5 million;

2006: $149.0 million;

2007: $165.5 million;

2008: $169.2 million;

2009: $166.9 million.

Bobby Wells, Greeneville Federal Bank's executive vice president, noted the bank experienced "double-digit" growth of its total loans outstanding in the 2005-2007 period, but the bank's total loans outstanding declined from 2008 to 2009, reflecting the recession and the bank's tightened loan underwriting requirements.

American Patriot Bank's total loans outstanding also increased from 2005 to 2008, but then declined from 2008 to 2009, as follows:

2005: $64.7 million;

2006: $77.6 million;

2007: $92.9 million;

2008: $105.7 million;

2009: $92.5 million.

Don Belew, American Patriot Bank's president, said its decline in loan volume from 2008 to 2009 was "basically for two reasons. First, because of the recession, there were not as many loan applications, and secondly, the bank tightened its credit standards."

The outstanding loan totals for three other local financial institutions have, however, increased steadily throughout the 2005-09 period.

Andrew Johnson Bank reported that its total loans outstanding have increased during each of the five past years.

Shane Hite, an Andrew Johnson Bank senior vice president, reported that the bank's loans totaled:

2005: $165.3 million;

2006: $190.9 million;

2007: $203.6 million;

2008: $226.1 million;

2009: $227.3 million.

Bill Hickerson, Andrew Johnson Bank's president, said the bank has continued to expand its lending in Greene, Hamblen and Washington counties, thanks to its capable loan officers.

"Approving only "quality loans." That's the key, 'quality,'" Hickerson said.

Heritage Community Bank's total loans outstanding during the past five years have steadily increased.

Ben Lindley, Heritage Community Bank's chief financial officer, noted that Heritage Community Bank is a young bank, having only been founded at the end of 2003.

He reported that lending by Heritage Community Bank rose in each of the past five years, as follows:

2005: $54.9 million;

2006: $67.2 million;

2007: $85.9 million;

2008: $95.0 million;

2009: $99.2 million.

However, Lindley said that since 2008, Heritage Community Bank's growth in loans outstanding has moderated, as was expected for such a young bank.

Because of the nation's sluggish economy, Lindley said, he doesn't expect much growth in the bank's loan totals during the next couple of years.

Consumer Credit Union reported that its total loans outstanding have increased in each of the past five years.

Sam Miller, CCU's president, said the credit union's outstanding loan totals in the last five years were:

2005: $99.6 million;

2006: $102.3 million;

2007: $110.8 million;

2008: $118.2 million;

2009: $133.2 million.

Miller said the CCU has been able to steadily expand its total loans because its officers review loan applications "the old-fashioned way," working hard to be sure the loan applicants are financially sound.

Bank of America, the largest bank in the nation, and BB&T, another major bank, each have one office in Greeneville. Total loan figures for those two offices weren't available.

Why did several local banks in the last two years have reductions in their total loans outstanding, while some other local banks did not?

The president of one local financial institution said that some local banks during the economic boom period had more liberal policies in regard to making loans than did other banks, so those with the more liberal policies were more vulnerable when the recession hit.

Referring to the national situation, The Wall Street Journal reported on Feb. 24, "It remains unclear whether the sharp decline in loans outstanding stems from banks' tightening standards or from weak demand from potential borrowers spooked by the downturn.

"Another cause could be the banks' actively reducing the size of their loan portfolios."