We've just started the third month of the year and already 14 banks have failed this year in the United States.

“There’s no good news; consumer confidence is low; the stock market is the market of expectation, and we're seeing that now,” said Steve Petty, a research analyst for Pension Consultants.

The sour market led to AIG's fourth government loan as the downward spiraling of big banks continues.

“The recession is going on a little longer than most people thought,” said Petty.

Banks in small towns like Billings did something right that many bigger banks didn't do.

“I wish big banks took the same approach,” said Keith Willcut, president of Bank of Billings.

Bank of Billings has been making transactions for 110 years. It's had zero government bailouts. The cozy teller windows have a charm of years past, a feeling that carries over in business.

“We lend to people we go to church with and we go to the ballgame with. We know them by their first name. We've done that for 110 years, and continue that tradition,” said Willcut.

The Bank of Billings lends the same way it did a few years ago: no good credit report, no loan. It didn't get sucked into taking on subprime mortgages or commercial land development.

“On the flip side, we did not get high return, high yield,” said Willcut. “I think we did it the right way the first time.”

Petty says, if a bank originates the same loan and doesn't take on too much risk, it's sitting just about as pretty as it can right now.

The Bank of Billings has roughly 600 loans; only one is past due. Willcut says what could break the small banks’ backs is unemployment. Then the borrowers won't be able to pay on loans that weren't high risk when they were granted.

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