Coming out of several years of pain, Yadkin Financial Corp. executives told investors Wednesday that they want to double loan production from what it was in 2011.
According to a presentation filed with the Securities and Exchange Commission, the Elkin-based bank projects loan production of $490 million this year. That's more than 50 percent over last year's total of $298 million and double the 2011 total of $233 million.
The largest growth -- about $90 million worth -- is expected to come from owner-occupied commercial real estate.
It's quite a change for a bank that closed branches, laid off a quarter of its workforce and raised capital to write off millions in bad loans over the past few years.
The growth drive also coincides with a name change. Yadkin Financial dropped the "Valley" that used to stand in the middle of its name.
Wednesday, July 31, 2013
Yadkin Financial plans to double loan production
Lower swipe fee cap could hit banks
It feels like it's been forever since we've heard much about debit card swipe fees -- those transaction fees banks charge retailers when customers pay with plastic.
But after two years of legal wrangling, a federal judge in Washington on Wednesday invalidated the cap regulators placed on them as part of the Dodd Frank financial reform law in 2011, saying the cap was set too high.
It's a major victory for retailers, who sued over where the cap was set: an average of about 24 cents per swipe. Before the cap, transactions cost around 44 cents.
But should the Federal Reserve have to come up up with a new, lower, cap -- as the ruling implies -- it will certainly further crimp bank revenue.
Bank of America had already estimated the debit card fee cap would cost the Charlotte bank $2 billion per year. The bank's most recent annual report says Bank of America's interchange revenue was down $1.7 billion in 2012 over the year before, on top of the $430 million reduction in the last quarter of 2011.
Wells Fargo reported giving up $365 million in revenue the first quarter after the cap went into effect.
Both Bank of America and Wells declined to comment.
Here's what the American Bankers Association has to say: "We’re deeply disappointed in today’s court decision, which will harm banks of all sizes and make it more difficult for institutions to serve their customers. ... It was – and still is – all about trying to help retailers increase profit margins while providing no real benefit to consumers. All this as retailers continue to enjoy the benefits of debit cards – from faster checkout to lower fraud costs – without paying for it or keeping their promises to U.S. consumers."
Wells Fargo putting branches in some Kroger stores
Wells Fargo is putting branches inside Kroger stores for the first time, the Atlanta Journal-Constitution reports. It's unclear how widespread they'll be, but the newspaper cites three locations in the Atlanta area.
Kroger is known for having bank branches inside its locations. Oftentimes, they're Fifth Third branches. Both the grocer and Fifth Third are Cincinnati-based companies.
Of course, the local wrinkle is that Kroger is buying Harris Teeter. Will this mean that we'll see Wells branches inside our neighborhood Teeters? I guess we'll see. Currently, some HT locations have SunTrust branches within them. There aren't any in the Charlotte area, but there are some in the Triangle.
DEALCLOUD INKS ANOTHER PARTNER: The Charlotte start-up has signed up Washington D.C.-based MyEyeDr. for its deal-evaluating software service as it prepares to buy up optometry practices. DealCloud business development director Tim Whitmire says the parntership shows the ability of his company's "platform to work for a broad range of business models."
SWAPS SUIT NAMES BOFA: Bank of America is among a dozen or so banks named in a pair of lawsuits alleging antitrust activity in the swaps market, the Wall Street Journal reports. Among other things, the suits say the big banks put up big barriers to keep smaller players from becoming swaps clearinghouses.
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Tuesday, July 30, 2013
Fifth Third to pay retiring chief risk officer $1.7M
Cincinnati-based Fifth Third Bank said Tuesday in a securities filing that it expects to pay former Chief Risk Officer Paul Reynolds $1.7 million in retirement compensation.
Reynolds' last day with the bank was Friday. His retirement was announced in June, the same day the company said Chief Administrative Officer Todd Clossin would retire July 5.
Under the terms of the deal, the bank will pay Reynolds in a lump sum six months after his last day with the company.
In its 2012 report, the bank said Reynolds was 51. His total compensation last year was $2.2 million, including base salary of $550,000.
Reynolds began working for Fifth Third in 1990 as vice president of the legal department.
Carolinas banks to pitch investors in NYC
Park Sterling Bank and several of its peers will be in New York City starting today at one of the community banking industry's key investor conferences.
And it comes at a pretty good time for them: After several years of struggles, small banks are outpacing their larger brethren in loan growth (6 percent vs. 2 percent) and earnings estimates are being bumped up four times as often as revised down, according to data from financial firm Keefe, Bruyette and Woods, which is hosting the conference.
Charlotte's Park Sterling disclosed a sneak peak at what they'll say with the SEC late Monday. Key themes: The bank is taking cost-saves from mergers and plowing the money back into new bankers and product specialists in personal and business banking in its best metro areas (i.e. Charlotte).
Of note -- the bank's stock is up 22 percent this year. But even that's still below the industry's 30 percent year-to-date growth, per KBW data.
WHY ARE SMALL BANKS OUTPERFORMING? KBW posits it could be because lending teams are moving from big banks to small ones, regulatory pressures are lighter on community banks, or a greater risk-taking attitude at community banks.
Other Carolinas' banks presenting at this conference include SCBT Financial Corp., NewBridge Bancorp, BNC Bancorp and Yadkin Financial Corporation.
CHARLOTTE HOME PRICES OUT TODAY: Housing values in the region have been going up for more than a year now. The region's prices rose 7.3 percent in April over the year ago period in the most recent results. Chances are the rally will continue despite slowly rising interest rates. We'll have a story up this morning with the results.
LOCAL UNEMPLOYMENT RATE OUT TODAY: Also coming today are county unemployment rates. Mecklenburg County's rate was at 8.9 percent in May, lower than last year, but still stubbornly elevated.
DIRTY BOFA TOWER: Bank of America has put a lot of effort into making its newer skyscrapers LEED certified, meaning that they adhere to a number of environmental sustainability standards. But a story in The New Republic says that despite that, its Manhattan tower produces more greenhouse gases per square foot than most other buildings, including twice that of the Empire State building.
What gives? According to The New Republic, you can get credit toward LEED status for things like putting in bike racks and educational displays, which don't really help the building be efficient. It also takes a lot of juice to power all those computer workstations.
The story does give a nod to the bank by saying the building isn't as bad for the environment as it could be. It doesn't, however, offer the bank's voice in response.
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Monday, July 29, 2013
Wells to stop selling off some debt, report says
Wells Fargo is planning to stop selling consumer loan debt its customers fail to pay to third-party collectors, the American Banker reports (paywall).
The move comes as regulators have been taking a harder look at this type of thing, particularly as evidence has emerged that collectors have gone after payments that have either been already made or discharged.
JPMorgan Chase has also stopped some of that activity in its credit card unit, as well.
DEPOSIT BOOM COULD BE OVER: For several years now, banks have been flush with deposits as low interest rates and market volatility made people keep their money in the banks. Interest rates are now inching up, and deposits across the FDIC were down in the second quarter for the first time since 2010, SNL reports.
Bank of America is one bank that's done a lot of work in this arena, as SNL points out. The Charlotte bank has been getting rid of high-cost CDs and bringing in low-cost deposits.
BANKS OF THE FUTURE WILL HAVE FEWER TELLERS, MORE TECH: As more and more transactional business gets done online or with technology, bank branches today are being built with less space for tellers and more room for specialty services. Not everybody's a fan. Advocates for the elderly say this cuts down on their access to banking services. The change also means fewer job opportunities for high-school educated people.
PITTENGER TO HOLD TOWN HALLS: The first-term Congressman will hold four around the area next week: in Charlotte, Mooresville, Cornelius and Waxhaw. The Charlotte Republican sits on the House Financial Services Committee.
****This is The Charlotte Observer's Bank Watch Morning Report, bringing you banking news from the region, the top financial headlines, and the news driving activity in the Charlotte market. *****
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Friday, July 26, 2013
More scrutiny coming for student lenders?
The federal government makes the vast majority of student loans these days, but banks like Wells Fargo and JPMorgan Chase still do a decent bit of business in private loans. They could be set for more scrutiny from regulators, if a bulletin from the Federal Reserve, FDIC and OCC is any indication.
The one-pager tells financial institutions to take extra care with student loan customers who are having a hard time paying back the loans. It also says bank examiners will give them a little lee-way when taking a look at loan books for soundness if they're giving help to troubled grads.
Hint, hint: "Prudent workout arrangements are consistent with safe-and-sound lending practices and are generally in the long-term best interest of both the financial institution and the borrower."
Student loans have been in the news quite a bit lately as Congress negotiates what to do with interest rates on federal loans. The standard rate doubled to 6.8 percent earlier this month. The Senate has passed a bill to bring them back down.
PARK STERLING POSTS RECORD RESULTS: The Charlotte bank earned $3.5 million for shareholders, up 10 percent. The record, execs say, comes from operating earnings, which exclude merger expenses.
PARK STERLING'S FIRST CASH DIVIDEND COMING: Because of those results, the bank's board has approved a cash dividend for the first time in the bank's history. Two cents per share for holders as of Aug. 6. The bank hopes to make quarterly dividends.
TREASURER CLOSER TO GETTING HER BILL: After years of advocating for it, state treasurer Janet Cowell put out a statement praising the state Senate for passing a bill giving her office more flexibility to invest where she sees fit. Before, state law had capped at a low percentage the amount that could be put in alternative investments. Opponents worry about pension funds being put in risky investments. From Cowell's statement: "The risk in its most fundamental sense is for our fund to not be able to pay out promised pensions over the long-term. This legislation improves our ability to protect and grow the pension fund while keeping its long-term cost to the taxpayers at a reasonable level."
WELLS PULLING OUT OF MORTGAGE VENTURES: Wells Fargo mortgage bankers in Charlotte could have their jobs affected by the bank's decision to get out of its joint ventures in the home loan business, citing regulatory pressure. The bank had partnered with mortgage origination companies it co-owned, like HomeServices Lending in Huntersville. That firm, by the way, is becoming wholly owned by Berkshire Hathaway.
The move isn't completely out of the blue. Wells Fargo had already ended its business with independent mortgage brokers, choosing to instead originate in-house. That decision last summer was spurred by a mortgage discrimination settlement the bank said stemmed from loans made by brokers.
CMCU HITS $300MM IN DEPOSITS: Charlotte Metro Credit Union said Thursday that it ended the last quarter above $300 million in deposits for the first time. Executives cite its marketing pushes as well as an emphasis on service. They said they've tweaked their hiring to focus more on personal service.
The credit union has been touting a lot of success lately, in memberships and business loans as well, tracing some of its recent popularity to the surge in anti-bank sentiment of a a year or so ago. CMCU says its membership has grown 5 percent (or 1,800) in the first half of this year.
FIFTH THIRD BANKER JOINS MOTORSPORTS BOARD: Commercial banker Lee Fite will serve on the North Carolina Motorsports Association board of directors, the bank says. NASCAR racing has been quite an area of interest for the Cincinnati bank of late. It sponsors the No. 17 car and has also built up a commercial lending team around the industry here in Charlotte.
FRONTIER INKS A DEAL: Charlotte private equity firm Frontier Capital has made an investment in recruiting and consulting firm WilsonHCG, Frontier says.
NEW BOFA ATMS COMING THIS FALL: Bank of America will be introducing its new "teller assist" ATMs here in Charlotte in the fourth quarter. They feature a video screen that lets you talk to a teller sitting in a call center in Delaware or Florida. These ATMs are already in place in Atlanta and Boston.
****This is The Charlotte Observer's Bank Watch Morning Report, bringing you banking news from the region, the top financial headlines, and the news driving activity in the Charlotte market. *****
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Thursday, July 25, 2013
Wells Fargo ends joint venture home-lending
Three years after the signing of the Dodd-Frank Act, Wells Fargo has announced it will end its remaining home-lending joint ventures, blaming the financial-industry overhaul for the demise of the deals that generated 3 percent of the bank’s mortgage production.
About 300 jobs at Wells Fargo, possibly including some in Charlotte, will be affected.
On Thursday, Wells Fargo said that it is pulling out of the arrangements with the independent mortgage origination companies it co-owned, including one in Huntersville.
San Francisco-based Wells Fargo said it will take 12 to 18 months to wind the operations down.
For more, click here.
Bank of America's 'Teller Assist' ATMs set for 4Q Charlotte debut
They're already in Atlanta and Boston and, come the fourth quarter, Bank of America's new automated teller machines will come to Charlotte, the bank said Thursday.
The "Teller Assist" machines have video screens that allow customers to get real-time assistance from a teller. The tellers are in call centers in Delaware and Florida.
The bank said Founders Hall will be one of the first locations in Charlotte to get the new ATMs. The bank has not released the other locations in Charlotte that might get the new machines.
Since unveiling the ATMs in April, the bank has put 36 of them in Atlanta and Boston.
Ally Bank hits $40 billion in deposits
Ally Bank, which has a significant portion of its retail bank here in Charlotte, announced the milestone Wednesday. Deposits grew 32 percent year-over-year in the first quarter, the bank said. It's small fries compared to banks in neighboring towers uptown, but Ally doesn't have any branches.
WELLS IS MOST VALUABLE BANK: Wells Fargo overtook a large Chinese bank to become the most valuable in the world by market cap, the Wall Street Journal reported. The Chinese bank has been hit by fears of a slowing economy there.
BOFA NAMES NEW DIRECTORS: Both are former bank executives, one at JPMorgan and one at Deutsche Bank.
WELLS TALKS UP AG HUB: Gov. Pat McCrory was again talking up a bank expansion, this time Wells Fargo's new East Coast agricultural lending hub. The hub will be based in Charlotte, but the bank today was announcing a team for the Triangle that will focus on eastern North Carolina.
****This is The Charlotte Observer's Bank Watch Morning Report, bringing you banking news from the region, the top financial headlines, and the news driving activity in the Charlotte market. *****
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Wednesday, July 24, 2013
Wells Fargo becomes world's biggest bank, Wall Street Journal says
Wells Fargo is the world's top bank by market capitalization, surpassing Industrial & Commercial Bank of China Ltd., The Wall Street Journal has reported.
On Tuesday, the newspaper reported that San Francisco-based Wells Fargo accomplished the feat June 26. ICBC gained the top spot on the eve of the financial crisis, overthrowing Citigroup, the newspaper reported.
Here's an excerpt from the story:
"The subsequent near collapse of many large Western banks, including Citigroup, only added to the sense among many observers that banks in the U.S. and other slower-rising, rich nations had become riskier than those in poorer but fast-expanding China.
But reduced expectations for China's economic growth and a cash crunch that hammered the nation's financial sector this spring -- along with signs that the U.S. economy is recovering and the end of ultralow interest rates may be in the offing -- have shifted those perceptions again."
According to the Journal, a long-awaited rally in U.S. bank shares has boosted the value of companies like Wells Fargo and JPMorgan Chase & Co.
Wells Fargo shares hit a 52-week high of $44.48 Monday. Bank of America shares hit a 52-week high of $15.03 Tuesday.
Bank of America adds directors
Bank of America's board has grown by two directors, the bank said Wednesday in announcing the appointments.
The appointments of former banking industry executives Clayton Rose and Pierre de Weck bring Bank of America's board membership to 15.
Rose, 54, a professor of at Harvard Business School, is a former executive of JPMorgan Chase & Co.
De Weck, 63, is former chairman and global head of private wealth management for Deutsche Bank. De Weck has also been an executive for Citicorp and UBS.
“Clayton and Pierre are strong leaders who understand the operations of global financial institutions," Bank of America Chairman Charles Holliday said in a press release. "Their joining the board enhances the already strong diversity of experience our board contributes to the benefit of shareholders."
The news comes after the bank announced in January that it was adding two directors.
Wells Fargo names Eastern agricultural lending team, board members
In an event attended by Gov. Pat McCrory, Wells Fargo on Wednesday announced an expansion of its Eastern food and agribusiness lending hub, which the bank opened in Charlotte this year.
On Wednesday, San Francisco-based Wells Fargo named its agricultural lending team for the Triangle East region, which includes 51 counties in eastern North Carolina.
Also on Wednesday, the bank named the first 12 members of a new "Ag Board," which Wells Fargo said will give it advice on "local agricultural-related issues" in the Triangle East area.
Wednesday's announcement comes after Wells Fargo said in June that it had picked Charlotte as the location for the hub, which is designed to grow its share of the agriculture-lending market east of the Rocky Mountains. Up to now, the bank has concentrated its agribusiness lending expertise in the West.
“Farmers in North Carolina are the ultimate workers,” McCrory said in a Wells Fargo press release. “Agriculture will
continue to be our top industry and our backbone for many years to come. We can grow that industry
through continued support, research and sound agricultural policy.”
Brent Williams will manage the Triangle East team, which includes:
- Duke Piner, in Greenville;
- Matt Babcock, in Washington;
- Mike Hoggard, in Elizabeth City;
- Brandon Berry, in Wilson and Rocky Mount;
- Mark Harrell, in Clinton;
- Susan Fader, in Goldsboro;
- Heath Nisbet, in Greenville; and
- Lee Anne Hill, in Kinston
- State Sen. Brent Jackson, R-Autryville;
- Jeffery Lee;
- Bartley Warren;
- Maurice Berry;
- Lisa Lacy;
- Phil Smith;
- David Davenport;
- Chris James;
- Daren Armstrong;
- Kent Smith;
- Joe Austin; and
- Frankie Waters
Also Wednesday, Wells Fargo said it will hire 30 bankers throughout the East Coast to work for the hub.
Bank of America still cutting most branches
Over the past four years, Bank of America has dropped more branches than any other bank, and half of them are in areas where the median income is below $50,000, according to an analysis from SNL Financial.
Since 2009, the Charlotte bank has lost a net 675 branches, the research firm found. Of those, 324 are in the lower-income census tracts. Executives have regularly talked about their efforts to "optimize" its branch network in conference calls with analysts.
Wells Fargo has a similar ratio of net closings to those in lower-income areas. Wells cut 508 branches since 2009, of which 237 were in areas with less than $50,000 in average income.
Industry-wide, poor areas are losing the most branches, SNL found. Banks dropped 3 percent of their branches in places where the median income is less than $25,000 per year -- the steepest drop of any income group. The largest number of net closings in these areas has already occurred this year.
Banks added nearly 8 percent more branches in areas where the median income is above $100,000.
So what's the upshot? SNL doesn't offer one. But it reflects big banks' increasing focus on high-net-worth customers who are more likely to buy multiple financial products. Non-banks like Walmart are increasingly filling in the gap for the "underbanked."
EXTENDED STAY FILES FOR IPO: The Charlotte-based hotel chain -- currently owned by private equity groups -- is looking for $100 million, according to securities filings. Deutsche Bank, Goldman Sachs and JPMorgan Chase appear to be running the deal.
FORECLOSURE RATE FALLS: The Charlotte region's foreclosure rate is now below the national average. About 2.2 percent of homes in the area were in some stage of foreclosure in May, down from 3.3 percent last year.
BANK OF COMMERCE BREAKS EVEN: The Charlotte bank earned just $1,000 for shareholders in the second quarter after its securities gains were wiped out.
PLEXUS CAPITAL CLOSES FUND: Plexus Fund III has $300 million, half private and half borrowed from the SBA's Small Business Investment Company program.
HAMP REDEFAULTS: A new special inspector general report criticizes the percentage of HAMP refinancings that ultimately resulted in homeowners redefaulting. Bank of America and Wells Fargo received about $200 million in incentive payments on loans that went back into foreclosure.
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Tuesday, July 23, 2013
Bank of Commerce roughly breaks even
Charlotte-based Bank of Commerce earned $1,000 for shareholders in the second quarter, a steep drop from the $116,000 it earned in the same time period a year ago, the bank said Tuesday.
Executives blamed a decline in money it made by selling securities. Portfolios have seen steep price drops as rising interest rates causes bond prices to fall.
CEO Wes Sturges said the bank was able to whittle $1.8 million from its troubled assets in the quarter.
Plexus Capital closes $300 million fund
Plexus Capital, an investment company headquartered in Charlotte and Raleigh, said Tuesday it has closed its latest $300 million fund.
It's the company's third fund, and has been certified in the Small Business Investment Company program, the company said. That means it is able to borrow low-cost capital through the federal Small Business Administration to invest alongside private money. That borrowed money makes up half of the fund.
Plexus makes subordinated debt investments in medium-sized businesses.
Banks courting first-term House members on financial committee
Newcomers to the House Financial Services Committee are racking up campaign contributions at a far faster rate than peers not on the committee, Politico reports.
Freshmen on the committee brought in an average $322,000 in the second quarter. Those not on the committee were given about $222,000, Politico found. Commercial banks make up one of the largest industries making these donations, an Observer look at campaign records shows.
U.S. Rep. Robert Pittenger, a Charlotte Republican first-termer on the committee, is not cited in the Politicio report. FEC records show he brought in about $200,000 in the quarter. To be fair, his district is a fairly safe Republican district, unlike some of his peers that are bringing in more money.
CLUB FOR GROWTH OPPOSES WATT: The conservative group has called the FHFA director confirmation a "key vote" and urged the Senate to vote against Charlotte U.S. Rep. Mel Watt, a Democrat. Says the alert: "...it is entirely inappropriate for a politician to fill this role who has explicitly advocated for greater involvement by the federal government in the mortgage industry."
CHARLOTTE HAS LITTLE INCOME MOBILITY: The New York Times made Charlotte one of its prime examples of cities where children born into poor families have little chance of rising to become high earners in a story that gained a lot of traction online Monday. In fact, much of the South scored low in terms of income mobility, as the Times refers to it. Why? Well, the researchers who put together the data aren't sure. Findings included that cities where poor families live in mixed-income communities do better.
BOFA EXPANDING HIGH-TECH BRANCHES: Bank of America has opened another "flagship" branch in Boston that are in a new, streamlined and tech-driven format. The first was in uptown Charlotte at 100 N. Tryon. These branches have laptop terminals for customers, tablets for bank employees, and special rooms for different product specialists.
****This is The Charlotte Observer's Bank Watch Morning Report, bringing you banking news from the region, the top financial headlines, and the news driving activity in the Charlotte market. *****
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Monday, July 22, 2013
Bank of America opens 'flagship' branch in Boston
Bank of America on Monday opened a "flagship" branch in Boston, the third for the Charlotte-based bank, which could end up with as many as 15 of the high-tech locations.
The flagship branches, larger than traditional Bank of America locations, are touted as coming equipped with the latest technology, such as the bank's new Teller Assist automated teller machines. They also feature space for customers to meet with Bank of America "specialists" -- financial solutions advisers, small-business bankers and mortgage loan officers.
In Boston's Back Bay neighborhood, the flagship branch is in addition to one in Charlotte at the bank's 100 N. Tryon St. headquarters and one in Livonia, Mich. Other flagship branches are expected to open in coming years.
Bank of America is putting the flagship branches in "top markets," spokesman T.J. Crawford said Monday. The flagship branch in Charlotte was the first to open, he said.
Noteworthy about the flagship branches are the laptop stations for customers and the bank employees that use tablet computers. The flagship branches also have the Teller Assist ATMs, which were unveiled this year and have a video screen that allows a customer to interact with a teller in real time -- and after normal banking hours.
At least one of the Teller Assist ATMs is coming to the Charlotte flagship branch, at Founders Hall, this year, the bank has said. Bank officials have not said when, though.
The Boston branch is decorated with art from Bank of America's own collection, Crawford said. Charlotte's flagship branch has a collection of antique mechanical banks, he said.
In Boston, he said, said two Bank of America branches, within blocks of each other, were consolidated into the flagship site. No jobs were lost as a result, he said.
Bank of America has been shuttering branches as it tries to cut costs. It plans to reduce the number to about 5,000 by the end of next year. But, like other banks, it says there's still demand for its "banking centers," Bank of America's term for branches.
"That's why we're focused within those banking centers on making our expertise more accessible in person through these specialists," Crawford said.
He said Bank of America has roughly 6,800 specialists in approximately 2,000 branches across the U.S.
(For a Boston Globe story on the Boston flagship branch, click here.)
Moynihan 'vindicated' by big bank resurgence?
Three years and a roller-coaster ride later, Bank of America's stock price is nearly back to the level it was when CEO Brian Moynihan took the helm. In a piece examining the first boost in big-bank revenue in four years, Bloomberg says the bank's performance has "vindicated" the chief executive and his counterpart at Morgan Stanley.
Greg Donaldson of Donaldson Capital Management tells Bloomberg: “Big banks are absolutely back ... The bleeding has stopped, and now they can spend time on figuring out how to make more money.”
STICKER SHOCK TO AFFECT HOUSING RECOVERY: When you go shopping for a home, you generally take a look at what your monthly payment will be. And while the recent rise in mortgage rates might not seem like much in the historical scheme of things, it adds up, the Wall Street Journal says.
Since mortgage rates started rising, the average payment on a $200,000 house has gone up $100 per month. For a $450,000 abode, it's gone up $250. That could keep some people on the verge of buying on the sidelines, experts told the Journal.
So the housing recovery is not over, and mortgages are still pretty affordable. But it's sure to have an impact on demand.
CHARLOTTE SPARED IN WELLS MORTGAGE LAYOFFS: Wells announced 350 layoffs in its mortgage unit as rising interest rates crimp demand. None of them, however, are coming in the Charlotte area -- which does a decent bit of mortgage business.
UNEMPLOYMENT UNCHANGED: The N.C. unemployment rate stayed at 8.8 percent. Business and professional services added the most jobs.
SUNTRUST PROFIT RISES: The Atlanta bank's profits rose 35 percent, barely beating Wall Street expectations, as expenses fell.
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Friday, July 19, 2013
No Wells Fargo layoffs for Charlotte, spokesman says
A Wells Fargo spokesman said Friday that a round of job cuts the company is making as it downsizes its U.S. mortgage staff does not affect the Charlotte region.
The Des Moines Register reported Thursday that San Francisco-based Wells has told 350 mortgage and retail lending employees that their positions are being eliminated. According to the newspaper, the layoffs were triggered by rising mortgage interest rates, which has slowed loan refinancing.
"There are no layoffs in Charlotte connected with that," Wells Fargo spokesman Josh Dunn told the Observer.
Wells Fargo has a mortgage-serving operation in Fort Mill, S.C. The company employs roughly 20,750 in the nine-county Charlotte region, Dunn said.
Dunn said the bank does not provide breakdowns of employment by job type. So, it was not immediately clear Friday how many workers are in the Fort Mill operation.
“The low interest rate environment of the past few years allowed us to staff up to meet the demand we were seeing,” Wells Fargo spokeswoman Angie Kaipust told the Register. “As this fast-paced demand for refinancing is slowing somewhat, we need to reduce staff to align with the business need.”
Banks across the country are keeping a close eye on refinancing, which has boomed in recent years because of record-low interest rates. As rates climb, refinancing is expected to dry up, leading banks to predict a decrease in mortgage revenues.
"We remain concerned about revenue for the back half of the year," Goldman Sachs Group wrote in a report Friday. Mortgage origination income could fall by 35 percent in the second half of 2013, the report said.
SunTrust Banks' Q2 profit rises
Regional banking company SunTrust Banks said Friday that its second-quarter profit rose 35 percent, thanks to lower expenses and a decline in the amount set aside for loan defaults.
Atlanta-based SunTrust, which has branches in the Charlotte area, reported net income available to common shareholders of $365 million, or 68 cents per share, barely beating the 67 cents expected by analysts. That compares with $270 million, or 50 cents per share, a year ago.
"Overall for the quarter, we demonstrated progress in our strategic initiatives to grow and diversify our business, and our financial results continued to trend favorably," CEO William Rogers said in a call with analysts Friday.
Revenue fell 7 percent, to $2.1 billion, because of declines in net interest income, mortgage-related revenue and trading income.
Profit was boosted by a 52 percent decrease in reserves for loans that go bad. The reserves were reduced to $146 million, down from $300 million a year ago.
Many other banks are also reducing such funding pools, a sign that borrowers are doing a better job of paying back loans. SunTrust said it wrote off $179 million in nonperforming loans, compared with $350 million a year ago. It attributed the decline to a decrease in residential loan charge offs.
Net interest income -- the difference between what a bank makes from loans and pays on deposits -- fell 5 percent, to $1.2 billion. The decrease stemmed, in part, from lower commercial loans swap income and the loss of dividends from SunTrust's sale last year of 59 million shares of Coca-Cola Co. stock, the bank said.
Noninterest income fell 9 percent to $858 million, as mortgage and trading income decreased.
Average deposits rose less than 1 percent to $126.6 billion.
Consumer banking and private wealth management profit rose 21 percent to $145 million. Wholesale banking profit rose 37 percent to $230 million.
But mortgage banking lost $76 million, down from a loss of $116 million a year ago.
PNC performance lagging in the Southeast, for now
As PNC executives tell it, there's still a long, hard slog to go to get the bank's performance in Charlotte and the Southeast up to the level of the rest of its footprint.
A year-plus after entering the region through its acquisition of RBC Centura, the Pittsburgh bank's new territory is lagging behind the rest of the bank in terms of efficiency, sales and other core activity, executives said on their quarterly earnings call this week.
PNC has been focused on getting rid of non-core business and investor-owned real estate that it doesn't want -- and working to replace them with new customers the bank does want.
Analyst Betsy Graseck of Morgan Stanley asked about the South's performance specifically. CEO Bill Demchak: "We don't have exact internal metrics where we compare efficiencies by regions, but I would tell you without having those that the Southeast is much worse than everywhere else."
Later, courtesy a Bloomberg news transcript: "This isn't a one or two or a three year game, it's going to be a long-term game ... We knew that going in."
Much of this is to be expected, of course. PNC has many more products than RBC did, and the new bank had to install completely new teams in some cases. In wealth management, for example, RBC didn't have anything here.
And the bank's perspective certainly isn't bleak. Earlier in the call, Demchak had taken a more positive outlook. He said the bank was making "good progress" in its growth in the Southeast, including "a dramatic increase in new client wins in corporate banking." He said he was pleased with the progress so far.
BB&T EXPENSES HIGH: The Winston-Salem bank had record profits, but a restructuring of the bank's retail markets -- including Charlotte's -- sent expenses way high in the quarter.
WELLS LAYING OFF IN MORTGAGE: As interest rates rise and mortgage demand falls, Wells Fargo is trimming its staff in its mortgage division, the Des Moines Register reports. About 350 people were fired on Wednesday. Almost 60 were in Des Moines; it's unclear where the rest are.
GE CAPITAL WOOS CHARLOTTE BUSINESS: GE Capital toured Hissho Sushi in Charlotte and later hosted 100+ business executives at the NASCAR hall of fame. We've got video of the GE Capital execs rolling sushi.
WATT GETS FIRST APPROVAL: U.S. Rep. Mel Watt got approved by the Senate Banking Committee to be the next head of the FHFA overseeing Fannie Mae and Freddie Mac. It was a close vote, and the Charlotte Democrat still faces a high hurdle in the full Senate.
BLUEHARBOR BANK PROFITS DOUBLE: Net income at Mooresville's blueharbor bank were up 111 percent in the second quarter. Loans are up, deposits down.
FORECLOSURES POINT TO IMPROVEMENT: Foreclosure says are up and foreclosure inventory is down, both signs the housing market is improving, Charlotte hard money lender Lima One says in its analysis of market data from RealtyTrac.
LAMPE LEAVES FOR WASHINGTON: Financial services attorney Don Lampe, who was with Dykema in Charlotte, has left to take a similar role in the Washington, D.C. office of Morrison & Foerster LLP.
****This is The Charlotte Observer's Bank Watch Morning Report, bringing you banking news from the region, the top financial headlines, and the news driving activity in the Charlotte market. *****
Thursday, July 18, 2013
BlueHarbor Bank reports 111 percent rise in Q2 profit
Mooresville-based BlueHarbor Bank logged a 111 percent increase in second-quarter profit from the same quarter last year, as its expenses fell and it set aside less money for bad loans.
Although loans rose, deposits fell for the bank, even though other, bigger banks -- Bank of America, BB&T, Wells Fargo -- have grown deposits from a year ago.
BlueHarbor, which has only two branches, had earnings of $315,011, or 14 cents per share, up from $149,243, or 7 cents per share, a year ago.
“We are pleased to report that the second
quarter of 2013 is the 15th consecutive quarter of positive earnings for BlueHarbor Bank," Jim Marshall, president and CEO, said. "We are especially pleased that our earnings for the first six months
of 2013 exceeded our earnings for all of 2012.”
The bank's deposits fell to $105.3 million from $114.8 million in the second quarter of last year. Loans grew to $104 million from $91.3 million. Assets dropped to $134 million from $136.9 million.
The bank's main branch is in Mooresville. Its other branch is in Huntersville.
GE Capital to tout middle-market business in Charlotte
Another competitor is coming to town. Executives from GE Capital, the middle-market finance arm of giant General Electric, will be in Charlotte today as part of their countrywide roadshow touting the importance of medium-sized businesses.
We'll be there with them at 8:30 a.m. as they tour Hissho Sushi, the fast-growing Charlotte company that now distributes to sushi bars across the country. In other cities they've visited, GE Capital has also hosted other business owners for policy discussions. GE Capital has retail finance, corporate finance and commercial equipment business here in Charlotte.
The middle-market in Charlotte has been pretty attractive for outside financiers lately. JPMorgan Chase made a big splash two months ago by building up its team in that segment and moving into a new uptown office. Chase's commercial bank CEO said it wants to be a player in the middle market here for the next 50 years.
BOFA EARNINGS NORMAL, FOR ONCE: Bank of America reported earnings early Wednesday, and for the first time in a good long while, there wasn't anything extraordinary to report. Earnings per share were the highest since fall 2011.
MORTGAGE BUSINESS WILL WANE: Mortgage origination was up big in the second quarter at Bank of America in the second quarter, but expect that to come down quickly. Like the rest of the industry, the Charlotte bank is starting to feel the pinch from rising mortgage rates at a time when refinances were already coming down.
CFO Bruce Thompson says the origination pipeline coming into the third quarter is 5 percent smaller than the quarter before. Even that has helped BofA pick up market share, he said, because other banks' have gone down more.
Related note: New home purchases made up 17 percent of originations in the second quarter, up from 7 percent the quarter before.
BOFA, WELLS SHARES HIT HIGHS: Again. After a strong Bank of America report, its stock jumped about 3 percent to a new 52-week high on Wednesday. Wells Fargo hit a high in the morning as well.
BB&T RECORD EARNINGS: Profit at BB&T jumped 7 percent in the second quarter, hitting a record 77 cents per share, the bank reported early Thursday.
WELLS NAMED TOP CORPORATE DONOR: Giving away $316 million to charity last year, Wells Fargo came out as the nation's top corporate donor. Speaking of Wells charitable actions: Charlotte market president Kendall Alley penned a blog post about the bank's "Day of Caring" in Charlotte and the role of business in the new model of civic leadership.
VINROOT BACKING STATE TREASURER FLEXIBILITY: Former Charlotte mayor Richard Vinroot is backing a bill that would give the state treasurer more authority to direct investments where he or she sees fit. Current treasurer Janet Cowell has said current law makes it tough to hit the 7.25 percent return target.
Vinroot, now practicing law at Robinson Bradshaw & Hinson in Charlotte, wrote a letter to the state House finance committee advocating its passage.
The upside for Charlotte: If the bill passes, Cowell will be looking for new hedge funds, asset managers and real estate investors to take more money. She has a history of tapping Charlotte-based firms.
AQUESTA BANK PROFITS: The Cornelius bank's net income grew 16 percent in the second quarter. Loans and assets both up.
MCCOLL PARTNERS CO-FOUNDER STEPS DOWN FROM SONIC: David C. Vorhoff, who co-founded boutique investment bank McColl Partners, is stepping down from the board of Charlotte's Sonic Automotive after his bank was acquired by Deloitte Corporate Finance. The announcement says only that his resignation was required by his new employment arrangement.
EDGEVIEW DEAL CLOSES: Charlotte boutique investment bank Edgeview Partners said last month it would be acquired by larger middle-market firm Piper Jaffray. Well, the deal is now done. They're still not disclosing financial terms.
****This is The Charlotte Observer's Bank Watch Morning Report, bringing you banking news from the region, the top financial headlines, and the news driving activity in the Charlotte market. *****
Wednesday, July 17, 2013
Wells named America's top corporate donor
Wells Fargo was named the country's most generous corporate donor for its charitable giving last year, according to the The Chronicle of Philanthropy.
The bank gave away about $316 million over the year, more cash than any of the companies surveyed, Forbes reports. That comes to 1.3 percent of its pre-tax profits of the year before. Wells gave away $15.6 million in North Carolina last year, the bank said.
Bank of America came in No. 7 on the list, giving away about $183 million. The bank lost money in 2011.
Over all of Corporate America, charitable giving was fairly flat. The figure grew 2.7 percent last year, to $5.3 billion, according to the Chronicle's survey of the 300 largest companies.
Aquesta Bank profit grows 16 percent
Cornelius-based Aquesta Bank reported Wednesday that it earned $360,000 in the second quarter, up about 16 percent from a year ago.
Both loans and assets grew at a double-digit annualized rate at an expanding bank. Aquesta is building its first Huntersville branch and added two new lenders in May. The bank issued its first stock dividend in April.
“Our improved earnings and strong loan growth in the first half of the year reflect our previously announced mindset change from playing defense to going on the offense," CEO Jim Engel said in a statement. "Every facet of our business has shown significant improvement, including asset quality, core deposit growth, insurance agency revenue and, of course, profits."
Aquesta Bank primarily serves businesses in the Lake Norman area.
Bank of America, Wells Fargo shares hit 52-week highs for second day in a row
Bank of America's announcement Wednesday that it earned $3.6 billion for shareholders in the second quarter helped boost its share price, which hit a 52-week high.
Shares of Wells Fargo also reached a 52-week high Wednesday and climbed to their highest closing price ever, after the San Francisco-based company reported record second-quarter profit Friday.
Both banks had set 52-week highs Tuesday.
On Tuesday, shares of Charlotte-based Bank of America stock hit a 52-week high of $14.02, a sign that investors were optimistic ahead of the second-quarter earnings report. That was surpassed Wednesday morning after the bank said it earned 32 cents per share, which was higher than the 25 cents that analysts were forecasting.
Bank of America shares climbed to $14.44 early Wednesday afternoon, an increase of more than 3 percent from the day before and up 24 percent for the year. Its shares closed at $14.31, their highest closing price since March 2011.
Wells Fargo shares closed at $43.51 after rising to a 52-week high of $43.88 during the day. That eclipsed the high of $43.45 hit Tuesday.
The price of both banks' shares has been trending upward all year, although Wells Fargo's trajectory resembles more of a steady rise when compared with Bank of America's.
Still, the increase indicates growing investor confidence in Bank of America, which has been dogged by lawsuits since the financial crisis and its ill-fated purchase in 2008 of Countrywide Financial Corp. But the bank set aside $471 million for litigation in the second quarter, down from $2.2 billion in the first quarter and $963 million in the second quarter of last year.
Investors, though, are closely watching a proposed $8.5 billion Bank of America settlement with investors of bonds that were backed by Countrywide Financial Corp. home loans. The settlement, which awaits approval from New York Supreme Court, has been challenged by objectors, including American International Group. Bank of America bought Countrywide in 2008. A rejection of the settlement by the court would create uncertainty about what it might cost the bank to appease the investors, analysts say.
Unlike at the end of previous quarters, Bank of America did not announce any legal settlements Wednesday, making the earnings call about just that -- earnings. It was a fact not lost on investors.
"We've seen a relatively clean quarter from the company the first time in recent memory, quite frankly," Todd Hagerman, an analyst with Sterne Agee & Leach, said.
Roth retirement savings on the rise
Who says millenials don't save? A new report from Wells Fargo Retirement says that the percentage of people socking money away in a Roth 401(k) is on the rise. That's the one where you pay taxes now and get the money tax-free when you retire. About 17 percent of people under 30 who are in plans managed by Wells are saving money in Roth accounts, up from 15 percent a year ago.
BOFA EARNINGS: Bank of America earned $3.6 billion for shareholders, or 32 cents per share, in the second quarter. That's up 70 percent from last year. We'll have more throughout the day at CharlotteObserver.com.
TIAA-CREF MEETING DEBATES MIDDLE EAST POLITICS: Yesterday, we said the investment giant's annual meeting would see a protest over health insurance companies. It didn't turn out that way, but there was conflict of another sort. Pro- and anti-Israel activists spent much of the meeting going back and forth over the company's investment in companies that do business with and in the country.
By the way, TIAA-CREF's largest office is in Charlotte. About a third of the company's 8,000 employees are here.
BOFA, WELLS SHARES HIT HIGHS: Both Bank of America and Wells Fargo shares hit 52 week highs on Tuesday. The stock price at BofA crossed $14 in the morning, for the first time since 2011. Shares dipped back below the threshold in the afternoon, however. Wells shares are up nearly 26 percent year-to-date.
BANKS GROWING IN TRIANGLE: While the Triangle isn't quite on Bank Town's level in bank branches or deposits, a number of banks are expanding their presences in the Raleigh area, The News and Observer reports. Our sister newspaper details growth from Bank of North Carolina, New Century Bank of Dunn, First Tennessee Bank of Memphis, TrustAtlantic Bank, Capstone Bank and Wells Fargo. All have opened or announced plans to open new branches this year.
Says UNC Charlotte banking professor Tony Plath: “Raleigh is the most attractive market in the state, hands down, bar none." Ouch.
WELLS EXEC JOINS CPCC BOARD: Madelyn Caple, who is Wells Fargo Private Bank's regional managing director for the Charlotte area, has joined the Central Piedmont Community College board of trustees.
WELLS FARGO BUYS U.K. LOAN PORTFOLIO: It's a $6 billion commercial real estate portfolio from the second-largest German bank. The deal is the latest in a series of foreign loan portfolio acquisitions.
Tuesday, July 16, 2013
Israel activists debate at TIAA-CREF annual meeting
Charlotte hosted an impromptu debate on Middle East politics Tuesday at investment giant TIAA-CREF's annual meeting.
A few dozen activists, evenly split on both sides of the issue, spent much of the question-and-answer period at the meeting to make statements on whether the company should make investments in companies that do business in Israel. TIAA-CREF manages more than $500 billion in retirement accounts and other assets.
Activist group We Divest sent several representatives to target the company for investments in companies like Caterpillar and Motorola, which it says "profit from the Israeli occupation" of Palestine, according to its website.
Another organization, Israel advocate Stand With Us, also sent several people to the meeting to thank TIAA-CREF for not divesting. They said their opponents views were based on misinformation.
It's not uncommon for niche issues to dominate an annual meeting. Bank of America's annual meetings held in Charlotte tend to draw dozens of activists who are opposed to the bank's financing of coal projects.
For its part, TIAA-CREF is staying neutral on the issue. "It's not an issue we're engaged in," spokesman John McCool told the Observer.
TIAA-CREF is based in New York, but Charlotte is home to its largest office. Of about 8,000 employees companywide, about a third are in Charlotte -- including portfolio managers, back office workers and call center workers.
The company tends to rotate its annual meetings between New York and Charlotte. One group had pledged to protest on another topic -- TIAA-CREF investments in health insurance companies -- but no demonstration occurred outside. Security officers were on hand to shoo unwanted visitors off the premises. One person from the group, however, made it into the meeting and made a statement on divestment from the industry.
As for the actual business of the meeting, there wasn't much. All of the directors were re-elected, and its auditing firm was approved with a 94 percent vote.
What earnings season forecasts for Bank of America
Bank of America is set to release its second quarter earnings report early Wednesday, but some of the other big boys in the financial sector have already put out their results. Here's what Wells Fargo, JPMorgan Chase, Citigroup and Goldman Sachs' numbers could mean for our hometown bank.
1) Loan growth could be weak. Or actually in decline. The average of Wells, City and JPMorgan was a 0.2 percent decline from the quarter before, according to analysts at Barclays.
2) Mortgage performance could decline. We're reaching the end of the refinancing boom, and mortgage rates are inching up. Executives at the big banks have predicted a decline in their home loan businesses, and Bank of America is unlikely to be much different. Rights to service mortgages are going up, though, and Bank of America could announce that it will be selling more of them.
3) Investment banking could be strong. Goldman, JPMorgan and Chase all reported double-digit increases in investment banking fees, Guggenheim Securities wrote. Goldman did particularly well in debt offerings.
4) Capital could be an issue. Regulators proposed a rule this month that would require at least a 5 percent leverage ratio. Now, capital was an issue for Bank of America for awhile. It spent a year selling off assets to get the level up, and got a decent result on the last federal stress test. It's unclear, under the new proposal, where BofA will stand. Wells Fargo said it was already in compliance with the rule. JPMorgan indicated it was a hair under the mark. Bank of America is expected to get the question, and that could spark another round of debate over whether the bank is adequately capitalized.
5) Revenue growth will be important. Sure, it sounds obvious, but revenue has been up and down across the banking sector of late. Both Wells and JPMorgan were able to grow revenue this quarter, so investors will be looking for that in Charlotte, too.
So what's this add up to? Hard to say Bank of America's earnings, moreso than its peers, have been marked with extraordinary items and legal settlements galore. Reckon we'll see at 7 a.m.
Wells buys British real estate loan portfolio
Wells Fargo will buy a $6 billion real estate loan portfolio in the United Kingdom from Germany's second-largest bank, Commerzbank, Wells said Tuesday.
The real estate was described as "high quality" and centers around London. Wells will finance the sale of another $2 billion portfolio of distressed real estate to Lone Star Funds.
Wells will also bring in one of Commerzbank's executives to lead its London commercial real estate office.
The San Francisco bank is no stranger to buying foreign loan portfolios, at a time when many of its peers are scaling back their acquisitions of so-called "non-core" assets. Wells bought a similarly sized portfolio from another German bank last summer. Last February, it bought an energy finance portfolio from BNP Paribas of France.
Bank of America, Wells Fargo shares hit 52-week high
(Updated at 5 p.m. Tuesday, July 16, 2013, with closing prices for Bank of America and Wells Fargo.)
Shares of Bank of America and Wells Fargo reached 52-week highs Tuesday.
Charlotte-based Bank of America, which is set to release second-quarter earnings Wednesday, saw shares trading for more than $14 Tuesday morning, a level they haven't reached since March 2011. That eclipsed the bank's previous high of $13.99, reached May 31.
Shares hit a 52-week high of $43.45 for San Francisco-based Wells Fargo, which on Friday reported record second-quarter profit of $5.3 billion, or 98 cents a share, higher than analysts’ expectations of 93 cents. Wells Fargo's previous 52-week high was $43.36, hit Monday.
Analysts are expecting Bank of America to report second-quarter earnings of 25 cents a share on revenue of $22.8 billion. That's higher than the second quarter of last year, when the nation's second-largest lender by assets earned $2.1 billion applicable to common shareholders, or 19 cents per share, beating analysts' estimates of 14 cents.
Bank of America shares ended the day up 0.29 percent at $13.92. Wells Fargo shares fell 0.76 percent to $43.02.
The financial performance of federally chartered banks improved last year, according to a report released this spring by federal regulators. The profitability of such institutions high its highest level since 2006, the report said. But, it said, that was helped by banks setting aside less money for bad loans.
TIAA-CREF meeting in Charlotte today; protests expected
TIAA-CREF ANNUAL MEETING IN CHARLOTTE TODAY: The investment giant will be holding its annual meeting at its Charlotte office in the University City area Tuesday afternoon. The firm tends to alternate its meetings between here and its headquarters in New York City.
At least one group is scheduled to protest outside. The activists wanted TIAA-CREF to divest from health insurance companies for not being socially responsible.
N.C. BANKERS BACK BILL TO DISSOLVE FANNIE, FREDDIE: Kay Hagan and eight of her friends put out a bill that would wind down the mortgage giants and create a government agency to issue mortgage-backed securities but make private investors take more losses. The point is to keep mortgages flowing, but push risk onto private investors rather than taxpayers.
The heads of the N.C. Bankers Association, N.C. Credit Union League, N.C. Association of Realtors and the National Association of Home Builders all say variations on that the bill is a good "first step" for GSE reform. From the realtors group president Patrice Willetts: “This comprehensive reform legislation would enable the market to continue to provide long-term, fixed rate mortgage products that most consumers seek and trust."
BOFA TWITTER BOMB?: Digiday takes Bank of America to task for having its corporate Twitter account reply to activists and trolls by asking if they can help them with their accounts. The bank says the responses are, in fact, from real people. Anyone have this job?
LOAN HELP FIRM SHUT DOWN: Charlotte-based loan modification help firm Lender Exchange has been shut down after allegedly charging people upfront fees to negotiate with banks -- which is against North Carolina law. The company also reportedly did not deliver results, the N.C. attorney general's office says.
LENDINGTREE AD NAMED EFFECTIVE: One of Charlotte-based LendingTree's new ads was named the third most effective of the last three months by Ace Metrix, Tree.com says. No, this isn't the one that says bankers all talk B.S. It's the one with the green puppet in his boxers.
PLEXUS CAPITAL MAKES $10MM INVESTMENT: The Charlotte and Raleigh firm made the subordinated debt investment in RMG Networks, Inc., a company that sells digital signs to Fortune 500 companies.
NOVARE CAPITAL ON THE ECONOMY: "During the summer, we expect to see continued market volatility as investors dissect every word said by any of the committee members of the Federal Reserve... We expect to see the US equity markets gradually move higher over the rest of the year."
The Charlotte firm added American Tower (REIT), D.R. Horton, Genworth Financial and IBM to its "select" list. It sold its shares of PartnerRe.
****This is The Charlotte Observer's Bank Watch Morning Report, bringing you banking news from the region, the top financial headlines, and the news driving activity in the Charlotte market. Click here to read more headlines from the Queen City and Wall Street. *****
Monday, July 15, 2013
Charlotte-based Lender Exchange shut down, Roy Cooper says
A Charlotte company that was sued last year by North Carolina’s attorney general over charging advance fees for loan-modification help has been shut down, the attorney general’s office said Monday.
It’s the latest company to be forced out of the foreclosure-assistance business by Roy Cooper’s office since a 2005 state law took effect.
On Monday, Cooper’s office said a consent judgment, signed July 5 by a Superior Court judge in Wake County, bans Lender Exchange and owners Kenneth Carl McCurd and Tanya Louisa Wilson from providing loan-modification, foreclosure-assistance or debt-relief services in North Carolina.
McCurd and Wilson have also been ordered to pay $4,000, which will be used to refund the company’s customers who complained to Cooper’s office. If the consent order is violated, McCurd and Wilson will have to pay $58,000, under the terms of the deal.
According to Cooper’s office, it has taken 10 Charlotte-area foreclosure-rescue companies to court since the 2005 enactment of the state’s debt-adjusting act, which bans upfront fees for foreclosure assistance or debt settlement services. A violation of that law is a criminal misdemeanor.
Cooper, who sued Lender Exchange in September, said the company, in addition to breaking the 2005 law, failed to provide its customers with "meaningful help." Also in September, Cooper sued another Charlotte-area company, Community Mortgage Assistance Program, and company official Koy Chiu. According to court records, that case is scheduled for mediation.
The North Carolina secretary of state lists 2015 Ayrsley Town Blvd. as the address for Community Mortgage Assistance Program.
Chiu could not be reached for comment.
Lender Exchange was based at 3325 Washburn Ave. According to the Better Business Bureau’s website, which puts the company in the category of "foreclosure rescue" and "advance-fee brokers, Lender Exchange had 20 employees.
An attorney for McCurd and Wilson did not immediately provide comment. Calls placed Monday to Lender Exchange went to a recording.
According to Cooper’s office, more than 1,200 consumers have reported foreclosure-assistance and loan-modification scams to the attorney general’s Consumer Protection Division during the past five years. The division received eight complaints about Lender Exchange, Cooper’s office said.
Last year, in announcing the lawsuit against Lender Exchange, Cooper’s office said the company would charge consumers a fee equal to one month’s mortgage payment. The company also falsely claimed that none of its clients lost their homes to foreclosure, and it created hassles for homeowners seeking refunds even though the company promised it would return customers’ money if they could not obtain a loan modification, according to Cooper’s office.
Cooper’s office said that since 2002 it has taken to court 17 companies running foreclosure scams in North Carolina.
Morning Report: Wells Fargo stock up after earnings
WELLS STOCK PRICE UP AFTER EARNINGS: By now you've heard the top line figure of $5.3 billion in net income, which beat Wall Street's guess and marked the 9th straight quarter of record earnings. Friday's report sent the stock price up almost 2 percent. With a little time to reflect, analysts generally had good things to say:
Guggenheim Securities: "We believe WFC should be able to continue to report sequential record quarterly earnings per share levels over the foreseeable future, as modest revenue growth coupled with improving efficiency and lower asset quality costs should provide underlying momentum."
Barclays: "Top and bottom-line results exceed expectations.... We believe forward-looking forward indicators were better than feared."
BOFA SAYS BONUS-FOR-FORECLOSURE CLAIMS 'IMPOSSIBLE': Allegations arose several weeks back from Bank of America loan servicers, including one in Charlotte, that the bank gave cash bonuses for pushing people into foreclosure. New court filings from the bank Friday say those claims are "impossible" and "wild misrepresentations," Bloomberg reports. Six of the seven workers were fired for inappropriate behavior, the filings said.
SUNTRUST RELOCATING UNIT TO CHARLOTTE: The Atlanta bank's mid-Atlantic corporate banking division will now have its home in SouthPark. From division head Jason Cagle: "North and South Carolina is the one spot in our footprint where we historically have had not a very focused calling effort on corporate clients. This clearly is our biggest opportunity for market share."
PRIVATE EQUITY BUYING CHARLOTTE HOMES: You've seen it in Arizona, California and Florida, and now they're here. Large private equity firms have made up as much as 10 percent of the home sales in Charlotte so far this year, led by Wall Street giant Blackstone and IPO-preparing American Homes 4 Rent.
This is The Charlotte Observer's Bank Watch Morning Report, bringing you banking news from the region, the top financial headlines, and the news driving activity in the Charlotte market. Click here to read more headlines from the Queen City and Wall Street.
Friday, July 12, 2013
SunTrust Banks relocates corporate banking headquarters to Charlotte
SunTrust Banks already is building one type of headquarters in Charlotte. Now, it's adding another.
The Atlanta-based bank said it has relocated its Mid-Atlantic corporate banking operation from Richmond, Va., to Charlotte, which is home to a SunTrust regional headquarters building under construction in SouthPark.
For now, the relocated corporate banking operation is in 6836 Morrison Blvd., where SunTrust has other bank operations, said Jason Cagle, head of the Mid-Atlantic division, which stretches from Maryland to South Carolina.
The corporate banking unit and the other operations in the Morrison Boulevard location will relocate to the new headquarters building when it is finished.
The corporate banking relocation comes as the bank is trying to expand in Charlotte and the Carolinas.
The bank has had a presence in North Carolina since 2004. In Mecklenburg County, it has 19 branches, according to federal data, but it wants to add more. SunTrust has 0.37 percent of the deposits in the county, putting it in sixth place.
"North and South Carolina is the one spot in our footprint where we historically have had not a very focused calling effort on corporate clients," Cagle said. "This clearly is our biggest opportunity for market share."
The Mid-Atlantic division pursues public and private companies that have more than $200 million in annual revenue.
Cagle said he will divide his time between Charlotte and Richmond.
Richmond's corporate banking team, which is made of roughly 10 people, is not being relocated to Charlotte, Cagle said. In Charlotte, the bank's corporate banking operation employs about six, he said.
"Hiring talent in both Charlotte and Richmond are a big priority for SunTrust right now," he said. "In the last six months ... we've added nine new corporate banking teammates to our downtown Richmond office. And we actually plan to add even more over the coming months so that we can continue to serve our clients in Virginia and D.C."
Wednesday, July 10, 2013
5 things to watch as Wells Fargo, BofA report earnings
It's once again time to take the temperature of two of Charlotte's largest employers.
Wells Fargo kicks off bank earnings season this Friday with its second-quarter earnings report. Bank of America will follow suit Wednesday before the market opens.
Earnings reports are always a jumble of figures, charts and statements. But here are five things investors and Charlotte bankers will be paying attention to.
Will Wells Fargo's record earnings streak continue? It's a figure that Wells executives love to tout: 13 quarters in a row of earnings growth and eight quarters of record profits. The bank barely continued it in the first quarter by edging out the prior quarter by a single penny per share -- and only by cutting costs more than revenue declined. The analyst consensus is that Wells will again best its previous record by 1 cent per share. The streak itself may be mostly a psychological thing, but failing to extend it Friday will mean a disappointing earnings report.
Will Bank of America announce another settlement? The Charlotte bank's last three earnings reports have all included significant legal settlements. In April, it was a $500 million agreement wiping out some liability on mortgage-backed securities stemming from its 2008 purchase of Countrywide Before that it was $13 billion to Fannie Mae and the federal government. And before that it was $2.4 billion to settle a shareholder suit over the bank's 2009 acquisition of Merrill Lynch.
Bank of America hasn't announced any major settlements ahead of its earnings report, so nothing earth-shattering on the legal front is likely. But nobody would be surprised to see another pocket of liability fall away.
How has the bond market sell-off affected the banks? Bond prices have fallen precipitously over the last few months as the economy has improved, interest rates have risen and the Federal Reserve indicates it might slow down on pouring money into the market. That's affecting banks in a number of ways. First, banks hold massive bond portfolios, in the tens of billions of dollars. As prices fall, that could mean a hit on the bank's capital levels just as regulators are taking a stricter stance.
But low interest rates have also crimped profits for the past several years since banks have had a hard time finding high-yielding places to park money -- and higher rates could offer some relief. This earnings report should give a first glimpse of how Bank of America and Wells Fargo will deal with it all.
What will rising home prices do to the banks earnings? By now you've heard that home prices are rising in Charlotte and across the country. Mortgage rates are going up, too. With Wells Fargo remaining the country's top mortgage lender and servicer, anything in the housing market is going to have an impact on the bank.
Bank of America, too, is in the midst of a mortgage business model change from wanting to service as many mortgages as possible to focusing on offering them to core customers.
Analysts have long watched for a waning in the rate of refinancing, which appears to have begun. Increased home prices could also boost the value of foreclosed homes and mortgages still on the books.
How much farther has the ax fallen at Bank of America? It's been a steady drip-drip-drip of job cuts over the past two years as Bank of America works toward trimming 30,000 from its payroll. As it last stood, the Charlotte bank had axed about 27,000 so far. News late last month that dozens of Charlotte bankers were laid off brought the issue home yet again. Investors care because they want to see the bank's expenses come down. The 15,000 Bank of America employees here in Charlotte care about their jobs.
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