Oct. 1--Business as usual or economic crisis? Local bankers and economy watchers are split on what might happen after the failure Monday of the federal government's $700 billion financial rescue.

While the region's number two bank, the troubled Wachovia, is acquired by Citigroup, other banks large and small say business continues. Community banks, known for conservative lending practices, insist the loans they make are solid, their balance sheets sound, their access to capital free of obstruction.

Still, some fear a widening credit crisis that could extend to them and increase the cost of other loans. Talk on the street is that some businesses are having a tough time getting money.

The sky didn't fall Tuesday and the sun was shining on Landmark Community Bank in Pittston. Chief Executive Dan Nulton reflected on his bank's best year ever -- the loan portfolio is up and sound, deposits are up, and the bank remains profitable.

"Life is going on and things are happening," Mr. Nulton said, as though the credit crisis was a faraway concern.

Unlike megabanks that use exotic sources to support their lending, smaller banks have more basic sources that will be neither crimped nor greased by a bailout.

Community banks support their lending from their own deposits. Many can get funds from the government-chartered Federal Home Loan Bank, or the Federal Reserve Bank discount window. Publicly-traded bank companies can issue stock to raise capital.

The region's top bank by market share, PNC Bank, hasn't tightened its credit standards over the last year and continues to make personal and business loans, said spokesman Ed Kozmor.

"Our lending practices have always been sound and they haven't changed," he said. "People with good credit scores and histories that we have relationships with are getting loans."

Wilson Smith, an independent bank equities analyst with Patriot Financial Partners in Philadelphia, said bailout backers overstated the consequences.

"This fear surrounds investment banks and major large commercial banks who rely on outside sources of funding -- not community banks," Mr. Smith said. "Community banks stayed clean. They know their customers and they have access to capital."

Bailout opponent Anthony Liuzzo, Ph.D., professor of business and economics at Wilkes University, isn't surprised business continues after the bailout's defeat. He said credit markets will loosen on their own once financiers book the losses and feel the pain of their bad decisions.