Monday, July 28, 2014

Will Warren Buffett change stake in Wells Fargo?

Warren Buffett’s Berkshire Hathaway will soon report whether it has changed its stake in Wells Fargo, one of the investment company's "Big Four" investments.

On Friday, Omaha, Neb.-based Berkshire Hathaway is expected to release its results for the second quarter, followed by a securities filing reporting on its stock investments.

Last year, Berkshire Hathaway increased its investment in San Francisco-based Wells Fargo to 9.2 percent, up from 8.7 percent in 2012, according to Berkshire Hathaway's annual letter to shareholders. The letter said the company owned 483.5 million shares of Wells Fargo that were worth almost $22 billion.

Berkshire Hathaway is Wells Fargo's largest institutional shareholder, followed by Vanguard Group. As of the end of the first quarter, Berkshire Hathaway owned 463.5 million shares of Wells Fargo.

Friday, July 25, 2014

Farewell for a year

Nearly three years after joining the Observer's business desk and launching this blog, I'll be taking a hiatus from banking coverage for a new challenge: education.

Our veteran schools reporter, Ann Doss Helms, is taking on a year-long project covering the Affordable Care Act and all of its implications in Charlotte. I've been tasked with filling her shoes while she does so, starting Monday.

It'll be sad to leave the finance beat, which has been ever-changing since the heated days of 2011 when I started. I've loved diving into Charlotte's premier industry while covering everything from debit card fees to the mortgage finance boom to the ecosystem of boutique investment banks in Charlotte.

The blog won't be going away and the beat remains in good hands. Deon Roberts will remain covering banking and all things finance in Charlotte.

Meanwhile, you'll be able to find me on our schools blog. Please keep in touch.

Wednesday, July 23, 2014

Yadkin Financial profit narrows in 2nd quarter

Raleigh-based Yadkin Financial Corp. on Wednesday reported lower second-quarter profit from a year ago as it recorded merger-related expenses and its mortgage business slumped.

The parent company of Yadkin Bank posted profit of $3.8 million, down from $4.2 million in the same period last year.

Expenses connected to its merger with Raleigh-based VantageSouth Bancshares weighed on earnings. The merger was completed earlier this month, making Yadkin the largest community bank headquartered in the state.

During the quarter, Yadkin reported its mortgage banking income fell 69.8 percent from a year ago to $769,000. The drop came as demand to refinance home loans nationwide has waned since interest rates began rising last year.

"2014 has been an eventful year for the company," Scott Custer, Yadkin president, said in a statement.

"The combination of two of North Carolina's largest community banks provides Yadkin with the growth opportunities, scale and footprint to continue to deliver a best-in-class customer experience, offer competitive financial services and solutions, provide a rewarding experience for our teammates and generate top-tier financial performance for our shareholders."

Yadkin Bank has 74 branches across the Carolinas, including in the Charlotte region.

Tuesday, July 22, 2014

Capitala Finance reports $22.6M in 2nd quarter investments

Capitala Finance Corp., a SouthPark-based company that invests in other businesses, reported Tuesday that it made about $22.6 million new investments in the second quarter.

Also during the quarter, the company completed a public offering of notes that generated $113 million in gross proceeds and priced $100 million in notes that will be used to continue its investments.

So far in the third quarter, the company has made about $26.5 million in new investments.

Capitala went public last year. It makes debt and equity investments in small and lower-middle-market companies.

The company will hold a second-quarter conference call Aug. 13.

Former N.C. banking commissioner carving out new career

Former North Carolina banking commissioner Joseph Smith is carving out a new career for himself overseeing major legal settlements in the financial industry.

Smith has been in the public eye for the past two years as monitor of a $25 billion national mortgage settlement entered into between state attorneys general and Bank of America, Wells Fargo and three other major banks. It resolved investigations into shoddy mortgage servicing practices, including "robosigning," or mass production and signatures of foreclosure documents without being read. Smith has produced periodic reports on how well the banks were offering the consumer relief they were required to do and how well they were complying with the 300-odd new rules the settlement brought with it.

Now Smith is in charge of overseeing a $13 billion deal with JPMorgan Chase and the U.S. Justice Department over bad mortgage bonds. His first report, issued Tuesday, breaks down what Chase is required to do and how Smith will make sure it's carried out.

And there could be more settlements for Smith to oversee. He's launched a website, JASmithMonitoring.com, that touts that Smith "specializes in overseeing complex financial services settlements through a rigorous, fair and effective process." Records indicate the website was registered in February.

Friday, July 18, 2014

Housing official: Foreclosures still big threat to Charlotte

Bob Kucab
On Thursday, a RealtyTrac report showed foreclosure rates in Charlotte and elsewhere continue to fall to levels not seen since before the housing bubble burst.

Time to pop open the champagne?

Not yet, says Bob Kucab, executive director at the N.C. Housing Finance Agency.

As Kucab pointed out to me Friday, the threat of lenders foreclosing on homes in Charlotte and across the state remains elevated for a variety of reasons.

“It’s still taking people longer to find jobs, and there still are people taking jobs that pay less than the job that they left,” he said.

“I think the economy has improved, but it’s been slow. And the jobs available, while they’re there, are sometimes not matching up with the needs of households.”

In Mecklenburg County, he said, many people remain at risk of losing their homes because of high unemployment.

In May, the most recent month for which there is data, the county’s unemployment rate was 6.7 percent. That was above the national rate, 6.3 percent, for the same month.

Kucab said it might take another two years before foreclosure filings in North Carolina drop to levels of 2000, a year that saw about 20,500 initial foreclosure notices in the state. This year, the state is on pace to record roughly 35,000 filings, he said.

Highlighting the ongoing need for foreclosure assistance in the state, this week the N.C. Foreclosure Prevention Fund announced an expansion of the program.

The program is designed to help people who are having trouble paying their mortgages because of a hardship, such as losing a job.

Through the expansion, the program, which was already available to veterans enrolled in certain programs approved by the The Department of Veterans Affairs, is now open to veterans who are receiving GI Bill benefits and obtaining education or job training.

The N.C. Foreclosure Prevention Fund, funded through the U.S. government's financial crisis-era bailout program, has prevented about 17,000 homes statewide from going into foreclosure, according to the finance agency.

Kucab, whose nonprofit agency administers the fund, said the program has capacity to help another 4,000 or so homeowners by the time the program sunsets in 2017. He said the foreclosure threat will likely still be looming even then.

“There will probably be need remaining at the end of the program, and that’s a sad fact.”

Those interested in seeking assistance from the program can call (888) 623-8631 or go to http://www.ncforeclosureprevention.gov/

NewBridge launches middle-market group in Charlotte

NewBridge Bank said Friday it has launched a middle-market group in Charlotte to serve companies that generate $25 million to $250 million in annual revenue as the bank expands its commercial banking capabilities.

The Greensboro-based community bank said middle-market banking, its newest line of business, will be focused on companies across the Carolinas.

NewBridge CEO Pressley Ridgill said in a statement that his bank sees an opportunity at a time when the middle-market sector is being under-served as a result of bank consolidations and large, national banks' changing strategies.

The new banking group will be made of six people: five in Charlotte and one in a Greenville, S.C., office.

In Charlotte, Michael McMahan, formerly of Bank of America, will lead a team of bankers that have experience at Bank of America and Wells Fargo.

Thomas DeMint, who has worked for Bank of America and Wachovia, will work in the Greenville office.

NewBridge said it plans to expand the middle-market banking team in the region where the bank is headquartered as well as in the Triangle.

NewBridge has roughly $2.4 billion in assets and 40 branches in North Carolina.

The hiring of the middle-market team comes after the bank announced in April an expected 5 percent workforce reduction as it overhauls how it staffs its branches.