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. *****
Financial headlines
JPM FACES HUGE ENERGY PENALTY: JPMorgan Chase could end up paying the largest fine ever imposed by the Federal Energy Regulatory Commission as the bank settles claims that it rigged electricity markets, the Wall Street Journal reports. Estimates are it could be $1 billion.
BERNANKE SPEAKS: The Fed chairman says it's not planning to slow down its stimulus until its goals are achieved, The New York Times says. He blamed Congress for slowing down growth.
METLIFE DOESN'T WANT TO BE 'SYSTEMICALLY IMPORTANT': Federal regulators are going around deciding which big financial companies that aren't banks are "systemically important." These guys would be subjected to more oversight, regulation and scrutiny. MetLife, the insurance giant, has always come up on the short lists of firms likely to be included, but company executives have fought it tooth and nail. Bloomberg has the latest update.
From CEO Steven Kandarian: “Not only does exposure to MetLife not threaten the financial system, but I cannot think of a single firm that would be threatened by its exposure to MetLife ... The life-insurance industry is a source of financial stability.”
You'll recall Charlotte is now somewhat tied to the health of MetLife. The company . Maybe its new neighbors Bank of America and Wells Fargo can tell them what it's like to be systemically important.
PNC EARNINGS DOUBLE: Profit at PNC doubled on the strength of mortgage business and lower costs, the Wall Street Journal says.
OTHER HEADLINES: $1 in the stock market 13 years ago would now still be worth $1... Pheet Bharara made a bunch of jokes about arresting hedge fund guys...ProPublica cheers new banking regulations.... Morgan Stanley's "identity crisis."
Around Bank Town
ON THE FRONT PAGE: The bill to take control of the airport away from Charlotte keeps on moving .... House speaker Thom Tillis raised a bunch of money from guys he then appointed to the UNC board of governors ... Belk is the apparel sponsor of this season of "Project Runway."
THE COMMUTE: Lanes on Wilkinson Boulevard are still closed ... There was a wreck on Brookshire Freeway at Bellhaven at 6:15.
I-77 TOLL LANE HEARING TONIGHT: Weigh in this afternoon at Lincoln Heights Academy.
SCENTAIR MAKES ACQUISITION: Charlotte scent marketing company ScentAir -- they sell fragrance you can put in your store -- has bought a similar company based in France. Terms were not immediately disclosed beyond that it was a cash deal.
BEIGE BOOK: The Fed's monthly Beige Book that describes economic conditions around the country came out Wednesday. Two references to Charlotte: One mention that real estate inventories are low as home prices increase; and a note that commercial rents have edged up.
LIGHT RAIL BREAKING GROUND: The extension of the Lynx Blue Line up to UNC-Charlotte will break ground today. The governor will be there.
STATE'S ECONOMIC DEVELOPMENT HAS CHARLOTTE VIBE: The chairman is a former Charlotte city councilman. The commerce secretary is from here, as is, of course, Gov. McCrory. His economic policy adviser is also a former Duke Energy executive. They all met Wednesday.
NO X-GAMES HERE: Sorry, Charlotte. We're just not cool enough to host the X-Games, apparently. ESPN decided to go with Austin, Texas, instead.
TOP BUSINESS SCHOOLS: Duke came in No. 5 on Business Insider's list. UNC is at 26.
LOTTERY WINNER: If you're in accounting, or maybe wealth management, you might want to look this guy up. A Rock Hill man just won $125,000 on the lottery scratch off. OK, maybe if you're in accounting.
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