Friday, October 17, 2014

Griggs Capital Management merges with Raleigh firm

Charlotte-based wealth management company Griggs Capital Management and Raleigh-based VisionQuest Wealth Management announced Thursday that they have merged.

Randall Griggs, president and founder of Griggs Capital Management, said the merged company will go by the VisionQuest name and remain headquartered in Raleigh but plans to open an office in Charlotte.

He said the merger was finalized Oct. 1. Terms of the deal were not disclosed.

Griggs, 66, said he searched for about a year and a half for someone to merge with as part of a succession plan for his company, which has just two employees and roughly $30 million in assets under management.

The primary driver of the merger was an opportunity to give his clients access to more services and the experience of VisionQuest, which has a staff of about eight, Griggs said.

Under the deal, Griggs will serve as senior vice president at VisionQuest and be a member of its investment committee.

Thursday, October 16, 2014

BB&T reports higher third-quarter profit

BB&T Corp. said Thursday it made higher profit in the third quarter compared with a year ago, when the regional lender's earnings were lowered because of a tax dispute.

Winston-Salem-based BB&T said it earned $520 million in the quarter, up from $268 million in the same quarter last year.

In last year's third quarter, BB&T's earnings were impacted by $235 million it had to set aside for income taxes after a judge ruled against it in a tax case involving the Internal Revenue Service. The ruling came after the IRS had challenged BB&T on its use of foreign tax credits in a 2002 transaction.

BB&T said it would have made $503 million in profit in last year's third quarter if it hadn't had to set aside the $235 million.

In the recent third-quarter, BB&T made $2.32 billion in revenue, down slightly from $2.35 million in the same quarter last year.

“Our results for the third quarter were strong, with solid fee income, broad-based loan and core deposit growth, and continued improvement in credit quality,” CEO Kelly King said in a statement.

Monday, October 13, 2014

Local bankers raise $350,000 for nonprofits

Charlotte's financial services industry raised $350,000 for seven local nonprofits during the annual "Banking On Our Community" event last week.

Kelligrew (Stephanie Chesson Photography)
The event, which is in its third year, was held Thursday at the Mint Museum in uptown Charlotte. The amount raised this year exceeded last year's level by $50,000.

“Charlotte’s nonprofit sector took a hit during the recession, limiting the breadth of essential services it could provide," Jim Kelligrew, an executive for U.S. Bancorp, said in a statement. "Now that the economy’s back on track, it’s important for our region’s vibrant financial services industry to band together and invest in our community."

Kelligrew, who is based in Charlotte and heads the bank's fixed income and capital markets group, came up with the idea for the event. He and Wells Fargo executive Lisa DeCarlo have co-chaired the event since its launch.

Over the past three years, the event has raised about $900,000 for nonprofits in Charlotte, according to a news release.

More than 250 members of the financial services community attended Thursday's event. The funds raised will go to Autism Charlotte, Charlotte Bridge Home, Habitat for Humanity of Charlotte, the John Crosland School, Lily Pad Haven, Mint Museum and the United Way of Central Carolinas.

Monday, October 6, 2014

Senator questions BofA contract

A U.S. senator is raising questions about a multimillion-dollar government contract awarded to Bank of America for work involving the federal prison system.

The letter from Sen. Chuck Grassley, a Republican from Iowa, comes after The Center for Public Integrity reported in a story last week that Bank of America has collected at least $76.3 million over the past 14 years from the contract awarded by the U.S. Treasury Department. The center, a nonprofit news organization, reported that the contract was awarded without a competitive bidding process.

According to the center's story, the contract has been amended 22 times in the past 14 years, growing from its initial $14.4 million value. The original deal called for the bank to manage federal inmates’ accounts and prison store inventory but has been expanded to include other services, including electronic money transfers, phone technology and e-messaging, according to the story.

Bank of America spokesman Bill Halldin declined to comment.

In a statement, a Treasury Department spokesperson said the department entered into the deal with Bank of America as it sought to create a "cashless" prison system at the request of the Bureau of Prisons. The deal expires May 31.

In his letter to Treasury Secretary Jack Lew, Grassley writes that the Treasury department's decision to repeatedly amend the contract rather than put it through a competitive-bidding process "raises significant questions."

"This original agreement, signed in 2000, has now been amended 22 times yet it has never been competitively bid and it is unclear how much money Bank of America has received from taxpayers and inmates as a result of this agreement," Grassley wrote.

"Government contracting rules require vendors to report credible evidence of fraud and conflicts of interests to the agency’s inspector general and the officer overseeing the contract," Grassley wrote. "It is concerning that these requirements do not apply to financial agency agreements such as the one with Bank of America."

According to the story, Bank of America and the Treasury designated subcontractors to perform at least some of the work. It is unclear how much of the $76.3 million has been paid to subcontractors. Halldin referred all questions about the contract to the Treasury Department.

Thursday, October 2, 2014

Wells Fargo opens tech-lending office in Raleigh

Pushing to lend to high-tech companies in the Research Triangle region, Wells Fargo has opened a "technology banking group" office in Raleigh, the lender said Thursday.

The location, which will serve the Carolinas, is Wells Fargo's 12th technology banking group office in the U.S.

Wells Fargo created the technology banking group in 2006 and has since opened similar offices across the country. The group serves four segments: life sciences, technology, "clean tech" and venture fund services.

The technology office is an expansion of a commercial lending office Wells Fargo was already operating in Raleigh.

Wells Fargo has named Matt Godwin, former chief financial officer of Williams Realty & Building Company in Raleigh, to head the new technology operation.

Godwin is a former Wells Fargo employee. He also was a senior auditor for the now-defunct accounting firm Arthur Andersen.

Monday, September 29, 2014

Fed questions BofA on move to lower hedge fund taxes

Bank of America has been questioned by U.S. regulators over a strategy that helps hedge funds and other clients reduce taxes owed on dividend payments.

The strategy, "dividend arbitrage," involves a bank transferring ownership of a client's shares to another jurisdiction before the client collects dividends on the shares. The move allows the clients to reduce the taxes they must pay on the dividends.

The Federal Reserve Bank of Richmond, which oversees Bank of America, has looked into the practice at the Charlotte-based bank.

"In the course of our regular and intensive supervision of Bank of America, we identified dividend arbitrage trading as an activity that required further examination of the risk and governance of the business," Richmond Fed spokesman Jim Strader said in an email to the Observer. "Bank of America has cooperated with our examination of the practice."

A Bank of America spokesman declined to comment.

According to The Wall Street Journal, which reported on the Fed's examination of Bank of America earlier Monday, the maneuver typically enables bank clients to reduce taxes from as much as 30 percent of the dividend payment to about 10 percent -- or sometimes to zero. The client, bank and entities that take ownership of the shares then divide up the savings.

It is unclear if other banks have also been questioned about the strategy.

On Monday, in an unrelated matter, the Securities and Exchange Commission said Bank of America has agreed to pay a $7.65 million civil penalty to settle charges resulting from the bank’s multibillion-dollar miscalculation of its capital ratios.

Friday, September 19, 2014

Yadkin Bank to pilot smaller branch

Yadkin Bank could become the latest lender to cut costs through smaller branches.

The Raleigh-based lender, which has operations in Charlotte, plans to open a 1,000-square-foot branch in Raleigh some time next year, Yadkin CEO Scott Custer told me Friday. The branch will be opened as part of a pilot project, and it's unclear whether Yadkin will open more of the small branches.

It's not unusual for banks to be experimenting with smaller branches these days. That's being driven by two key factors:

First, banks are trying to reduce costs as they struggle with weak revenue growth. Second, banks see less need for the large, expensive-to-run branches of the past at a time when consumers can do many basic banking activities on their phones and computers.

Bank of America and Wells Fargo are among big banks that have rolled out smaller branches in the past year and a half.

Yadkin represents a smaller bank taking a hard look at how it might reduce its branch costs as consumer habits change.

The bank's test branch will about one-third the average size of a Yadkin branch, which is 3,500 square feet. Custer said it will be staffed by two full-time employees and one part-time employee.

Smaller branches could allow the bank to operate less-expensive branches while also ensuring it has enough locations to provide convenience for its customers, he said.

Yadkin bank is part of Yadkin Financial Corp.

In July, Elkin-based Yadkin Financial Corp. merged with Raleigh-based VantageSouth Bancshares, forming North Carolina's largest community bank.

The merged bank holding company kept the Yadkin Financial Corp. name.

Custer, who was VantageSouth's president, became CEO of the combined company.