These Banks Are Worth Saving

As many larger players sweat the details of the next phase of the government's bailout efforts, several regional banks that have better weathered the storm look more worthy of saving.

Investors in giants Citigroup(C Quote) and Bank of America(BAC Quote) will hang on every word Tuesday, when Treasury Secretary Timothy Geithner is expected to unveil the Obama administration's plans to shore up the banking system. Both banks sold $45 billion stakes to the government and received billions of dollars more in guarantees on bad assets, allowing them to potentially benefit greatly

Many regional banks, however, haven't made the bad decisions that led to Citi or BofA receiving the government's ample help. They were conservative and steady. Save them. Ditch the losers.

Bank Directors magazine's recent 2008 bank performance scorecard, covering 150 banks, ranks seven mid-sized banks with assets ranging from $3 billion to $11 billion in its top 10.

These top bananas shied away from many of the financial products with fancy names like collateralized debt obligations and credit default swaps and stuck to traditional lending. By extending credit to businesses with sound credit histories, instead of lending heavily in real estate and construction, some of these banks are coming through the credit crisis in much better shape than more well known competitors.

Glacier Bancorp (GBCI Quote), headquartered in Montana with 94 branches, ranked at the top of the list. First Financial Bancorp (FFBC Quote), with only $3 billion in assets, came in at number two by maintaining close ties to its local community, allowing it to sniff out trouble with customers before it becomes a crisis.