Bank of America's new automated teller machines, which provide live video access to tellers, will come to Charlotte early next month after already being rolled out elsewhere in the U.S.
The branch at 3021 Prosperity Church Road will be the first among six locations where the Teller Assist ATMs will be available in Charlotte, bank spokeswoman Tara Burke said Friday. The Prosperity Road branch is in north Charlotte, about a mile and a half off Interstate 85.
The bank plans to put the machines in additional Charlotte locations between now and the middle of October, she said. The bank's flagship Founders Hall branch at Trade and Tryon streets and the Steele Creek branch at 12930 S. Tryon St. are among the other locations where the ATMs are planned to go.
The Teller Assist ATMs are so named because they allow customers who need help with a transaction to speak with a teller who appears on a screen that's built into the machines. Those tellers are stationed in call centers in Delaware and Florida. The ATMs provide access to tellers outside of normal banking hours, including Sundays.
Bank of America is rolling out the new machines as other banks are also upgrading their ATMs. For example, San Francisco-based Wells Fargo this year announced new machines that feature one-touch “favorites” buttons based on customers' ATMS habits. And, this week, Pittsburgh-based PNC Financial Services Group said it has completed upgrades to its Charlotte-area ATMs, which, among other things, allow cash and checks to be deposited without envelopes.
Banks are making their ATMs more high-tech at a time when many are reporting fewer customers heading to teller lines inside branches and more of their customers migrate to mobile devices and online.
The Teller Assist ATMs are coming to Charlotte at the same time Bank of America is eliminating drive-up teller service at some of its branches across the U.S., including six in the Charlotte region. The bank says too few people are using the drive-thru lanes.
Friday, August 30, 2013
Bank of America's Teller Assist ATMs coming to Charlotte next month
Davidson insurer moves into new headquarters
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| Mooney's Corner. Photo courtesy of JJ Wade & Associates |
The insurer leases all four floors in the 15,000-square-foot Mooney’s Corner building, at 212 South Main Street by town hall.
Development of the building had been in the works for more than a year. Construction was financed by Bank of North Carolina, Davidson News reported.
Bank of America also cutting mortgage operations
Just a week after Wells Fargo announced it was cutting deep into its mortgage fulfillment division comes the news that Bank of America is doing it, too.
The Charlotte bank announced more than 1,000 job cuts in Ohio as it closes several mortgage and consumer banking offices, the Cleveland Plain Dealer reported. The majority of the positions were working with refinances in the mortgage fulfillment division.
Big banks had staffed up those operations rapidly over the past two years as historically low interest rates had brought a torrent of refinance applications. As mortgage rates have shot up in the last few months, the banks have been scaling the business back.
Wells Fargo announced 284 layoffs in Charlotte last week, part of more than 2,300 job cuts in fulfillment around the country.
Bank of America said the cuts were centered around Ohio, with much less impact elsewhere. Four positions in North Carolina were affected, spokeswoman Jumana Bauwens said by email. The bank said the job cuts are part of the bank's larger efforts to streamline the company. The bank has also been trimming back the number of workers dealing with delinquent mortgages.
"Compared to peak levels in 2011, today we have fewer than one-third the numbers of customers who need the specialized programs and support of this team," the bank's statement said.
Thursday, August 29, 2013
PNC Financial Services Group's acquisition of RBC 4th among bank deals
PNC Financial Services Group's acquisition of RBC Bank is the fourth-largest bank and thrift deal announced in the U.S. since January 2010, according to a ranking released Thursday.
SNL Financial produced the ranking of the 20 top deals.
Pittsburgh-based PNC announced in 2011 that it planned to acquire RBC Bank’s Raleigh-based U.S. business, in a $3.45 billion deal.
No other North Carolina deals are on the list.
The biggest deal, worth $9 billion, involved Capital One Financial Corp. and ING Bank FSB.
Wednesday, August 28, 2013
NewDominion adds two to board
Charlotte-based NewDominion Bank said Wednesday that it has added two local businessmen to its board -- bringing membership up to 16.
Ken Beuley, chief financial officer for commercial developer The Keith Corp., and Louis Foreman, CEO of industrial design firm Enventys, are on the board effective immediately.
NewDominion is looking to transition after completing a $10 million capital raise late this spring that took a lot of pressure off the community bank. The board played an active role in that capital raise, helping enlist new investors in a rare retail offering.
Cash America buying more Charlotte locations
Nationwide pawn and payday lender Cash America International Inc. said Wednesday that it will buy three new locations in Charlotte.
The $62 million deal with PawnMart Inc. also includes 31 locations in Georgia. In Charlotte, it will increase its presence by a third from the nine stores in the city already.
PNC Financial Services Group completes ATM upgrades in Charlotte
Four months after announcing plans to upgrade its Charlotte-area automated teller machines, PNC Financial Services Group said Wednesday that the process is finished.
In Charlotte, 16 ATMs are now so-called DepositEasy machines, the Pittsburgh-based regional lender said. All told, roughly 170 ATMs in its Western and Eastern Carolina coverage area have been upgraded.
Among other things, the ATMs dispense one- 10- and 20-dollar bills.
PNC said Wednesday that the upgrades to 3,600 ATMs in its markets were completed this month, resulting in half of its 7,200 machines receiving the upgrades. The upgrading began in 2012, it said.
PNC is far from the only bank to make recent tweaks to their ATMs. Despite the migration of customers to online and mobile banking, banks still view ATMs as a necessary expense, industry observers and bankers say.
Bank of America this year unveiled its Teller Assist ATMs, which have the noteworthy feature of providing real-time access, via a video screen, to tellers stationed in call centers. The tellers can be accessed beyond normal banking hours, including on Sundays.
Also this year, Wells Fargo announced redesigned ATMs that feature, among other things, one-touch “favorites” buttons based on what a customer does most, such as withdrawing $60.
PNC has upgraded its ATMs as it is seeing growing use of the machines and mobile apps for making deposits. According to the lender, 23 percent of its customers' deposits made in the second quarter were through ATMs or mobile apps, up from 14 percent a year ago.
PNC's new ATMs allow cash and checks to be deposited without envelopes, a feature that some other banks' ATMs also offer. Before PNC upgraded its ATMs, some of its machines allowed envelope-less deposits, a spokesperson said.
Among other things, PNC's new ATMs:
- Allow check deposits made by 9 p.m. Eastern Standard Time to be considered to have been made that day, with cash available immediately.
- Provide a printed image of the check if the receipt option is chosen.
- Allow the transfer of funds between linked accounts.
- Give users the option to set customized ATM preferences. For example, a customer can choose what PNC calls a personalized "Fast Cash" amount.
Merrill Lynch settling racial bias case
'HUSTLE' CASE HEADED TOWARD TRIAL: A judge didn't agree with Bank of America that a federal government suit alleging the bank recklessly sold bad loans to Fannie Mae and Freddie Mac should be thrown out, Reuters reports. The Justice Department brought the suit in October, and covers actions taken at Countrywide, as a Bank of America spokesman points out. Essentially, the billion-dollar suit says the bank churned out as many mortgages as it could to sell to the mortgage giants while disregarding processes set up to make sure they were good loans. A trial is set for Sept. 23.
Monday, August 26, 2013
N.C., S.C. credit unions give OK to merge trade groups
After nine months of discussion, credit unions in the North and South Carolina credit union trade associations have voted "overwhelmingly" to merge the two, the organizations say. The new Carolinas Credit Union League will be effective Jan. 1.
John Radebaugh, who led the North Carolina league, will helm the combined organization.
The vote in North Carolina was 52-2, and in South Carolina was 43-2.
Commodity body seeks to revoke registration of firm accused in schemes
The U.S. Commodity Futures Trading Commission said it has filed a notice of intent to revoke the registration of Prestige Capital Advisors in Charlotte, after a federal court found that it defrauded investors.
The U.S. District Court for the Western District of North Carolina found that Toby D. Hunter of Waxhaw and his companies, Prestige and D2W Capital Management, also based in Charlotte, fraudulently solicited and accepted $4.7 million for investment in a pool that traded commodities and futures contracts.
According to the commission, there were at least six investors in the Prestige Multi-Strategy Fund, a pool Hunter and Prestige created. In soliciting investors, Prestige posted false trading returns on a website called BarclayHedge, the court found.
The court also found that D2W -- a managed foreign currency, or forex, account service -- sent false account statements.
In June, Hunter, Prestige and D2W were ordered to pay roughly $11.7 million in fines and restitution.
Friday, August 23, 2013
BB&T won't raise dividend under revised capital plan
BB&T Corp. said Friday that the Federal Reserve has approved its revised capital plan, after the Fed had objected to its original proposal in March.
Under its revised plan, BB&T will not raise its dividend of 23 cents per common share.
"In light of several factors, we approached the resubmission conservatively and did not request a further increase in capital deployment at this time," Kelly King, the CEO of the Winston-Salem-based lender, said in a press release. "We believe this approach makes sense."
As part of those tests of lenders' health, they must submit to the Fed their plans to repurchase shares or pay dividends.
Bank of America, Wells Fargo, BB&T and nearly all the rest of the banks passed the tests. Ally Financial did not. As a result of the tests, the Fed gave conditional approval to the capital plans of JPMorgan Chase & Co. and Goldman Sachs but objected to BB&T's and Ally's.
BB&T would not be able to implement its requested capital plan until the “deficiencies” were fixed, the Fed had said.
Ally has yet to resubmit its capital plan, a spokeswoman said, according to a Monday story by The New York Times.
Also Friday, BB&T said the Fed also did not object to its plan to continue paying preferred dividends.
Charlotte mortgage lenders make Inc. 5000
The refinancing boom hasn't just been good for the big banks. The last few years have also been gangbusters for a couple of Charlotte mortgage lenders. Four of them ranked among the fastest-growing private companies in the nation last year, as cited by a prestigious business magazine.
Movement Mortgage, formally known as New American Mortgage, came in at No. 292 overall and tops among North Carolina finance and insurance sector companies. It posted revenue growth of 1,592 percent over the past three years -- hitting $92 million last year.
With revenue growth of about 467 percent over the past three years, First Financial ranked No. 934 on the Inc. magazine's annual Inc. 5000 list. The company was No. 20 among North Carolina firms. The magazine pegged its revenue at $34.1 million, up from $6 million in 2009. First Financial was founded in 1991 and employs nearly 200. The company said it closed $1.4 billion in loans last year, primarily in residential mortgages. It generates leads online and takes in referrals.
Wyndham Capital Mortgage was No. 1002, and GoodMortgage.com at No. 3720.
Other Charlotte financial companies on the list include Horizon Investments and AmWins Group.
Thursday, August 22, 2013
More banks selling securities, Charlotte firm finds
Perhaps its a response to low interest rates making net interest income harder to come by. Or maybe it's simply a matter of smaller banks with fewer offerings simply going out of business. But either way, the percentage of commercial banks that sell securities to customers increased in the last year, the first time since the beginning of last decade, according to a new report from Charlotte-based consulting firm Kehrer Saltzman & Associates.
About 27 percent of banks now report fee income from selling investments, after years of the number staying below 25 percent. It marks the first time the percentage had risen since 2001, the report says. Revenue in these business lines was up 17 percent last year.
In raw numbers, though, the number of banks selling investments is way down as hundreds of banks have shuttered around the country. The report also warns that there is a thinning number of investment advisers relative to assets under management. It also says that customers tend to trust banks far more than they trust the advisers who work there.
EX-MCCOLL PARTNERS BANKERS ADVISE ON NEW DEAL: They're now with Deloitte Corporate Finance, which announced Wednesday that it advised on the organic and gluten-free company Enray on its sale to The J.M. Smucker Company. Terms weren't disclosed. McColl Partners, as you recall, sold to Deloitte in June.
****This is a preview of 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, August 21, 2013
Cary investment adviser misled on its abilities, SEC alleges
An investment company based in Cary told potential clients it had the ability to do algorithmic currency trading when it did not, according to new charges from the Securities and Exchange Commission.
Chariot Advisors LLC and principal Elliott L. Shifman allegedly misled the board of directors for an investment fund about its abilities to try to get a contract approved in 2008 and 2009. Chariot did not have any algorithms it used for currency trading. It used an individual trader.
A hearing will be held to determine if the charges are true and if any punishment is warranted.
Tuesday, August 20, 2013
Wells Fargo re-ups sponsorship with UNC athletics
Wells Fargo has renewed its contract with the athletics department at UNC-Chapel Hill, meaning more advertising for the bank at sporting events, two new scholarships and financial education for student-athletes.
The university announced the extension Tuesday. The two new scholarships will support athletes who are pursuing advanced degrees. They'll begin this year and the program will last for five years.
Wells Fargo also will sponsor the Carolina Fever student organization, which rallies attendance at sporting events. The bank also is rolling out four new UNC-related images that Wells Fargo customers can put on their debit cards.
The bank has sponsored UNC sports since the Wachovia days. Wells Fargo also still has a banking contract with the general student population. The bank offers a debit card that also serves as a student ID. That contract was inherited from Wachovia as well, but has since been renewed.
Bank of America hits 1 million small business mobile customers
Bank of America updates us quite a bit on how its mobile banking business is going, but Tuesday brings the first news I can recall on how it's performing among small businesses: The bank says it has now hit 1 million small business customers on its mobile platform.
The Charlotte bank's small business mobile app allows owners to check accounts balances and transactions, transfer money and make bill payments through their phone. It also have a remote deposit capture feature, which lets small businesses take pictures of a check to deposit them.
The milestone follows what for a time was a regular drumbeat of big numbers among retail customers. In May, CEO Brian Moynihan said the bank had crossed 13 million mobile banking customers.
CertusBank buys stake in company managing athletes, entertainers
CertusBank has made an investment in a company that manages the finances of entertainers and athletes, including -- reportedly -- the likes of Justin Timberlake and Anna Kournikova.
The bank, based in Greenville, S.C., but with corporate offices in SouthPark, did not disclose the terms of the deal it struck with Monarch Business and Wealth Management. Nor did it describe the rationale for the investment.
But that company is run by Barry Klarberg, a high-profile manager who has been linked in news reports to the famous singer Timberlake, tennis star Kournikova, actor Charlie Sheen and NHL legend Mark Messier.
"We are excited to partner with Monarch and their talented team of professionals in the next phase of our wealth management business,” says Charlie Williams, CertusBank’s co-CEO, Charlotte chamber board member and Bank of America alum, in a statement. “We are pleased to have this unique opportunity to invest and partner with such a robust platform.”
CertusBank surely hasn't been shy about making deals lately, though they're usually of a much different variety. It's bought nearly a half-dozen failed banks over the past few years as it's cobbled together a $2 billion franchise, and a Charlotte mortgage company last summer.
Private equity firm Asset Alliance bought a stake in Monarch last year.
Monday, August 19, 2013
Settlement money for housing counselors just getting started
Even though the big banks involved in the $25 billion mortgage servicing settlement from last year are nearing the end of their obligations, the money North Carolina set aside to pay for more housing counselors for distressed borrowers is only getting started to be distributed.
I asked the N.C. Housing Finance Agency, which is in charge of doling out that portion of the money, for an update late last week. They say that about 20 percent of the $14 million it's giving out to 47 homeowner counseling agencies around the state has been given out, and will continue to do so through 2015. That equates to about $2.7 million so far.
The agency did not provide a number of new counselors that had been hired as a result of the settlement money. One interesting note: The N.C. Housing Finance Agency said that in many cases, settlement money has been used to preserve the jobs of counselors who faced being downsized as the agencies lose other sources of revenue.
NEW WEALTH HEAD AT BANK OF N.C.: Heath Kinsland has been named senior vice president and head of wealth and business services at Bank of North Carolina, and he will be based here in Charlotte in its SouthPark office. He'll report directly to CEO Rick Callicut. Previously, Kinsland had been an executive in BB&T's wealth division.
BURR SAYS COMPANIES CAN'T LURE N.C. WORKFORCE AWAY: Sen. Richard Burr spoke to a small group at the Charlotte Chamber last week. The public wasn't allowed in, but the Chamber posted a YouTube video of some of his comments. He spent a good deal of time praising the state's workforce, and said it's been a major driver in companies deciding to set up shop here. If a company wants access to the workers here, they've got to have operations here, Burr said, since they're not going to be able to recruit them away. "There's nobody being recruited from North Carolina to move to California." I'm pretty sure this is not literally true (Wells Fargo, you convinced anybody to move from Charlotte to headquarters?) but you get the idea.
Here's some more of his comments, on sequestration, the Affordable Care Act, national security and the national debt.
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Friday, August 16, 2013
Charlotte cited for high wages, low cost of living
Companies that move operations into Charlotte regularly cite the area's low cost of living, but a new report from GoBankingRates.com says the city's relatively high incomes put Charlotte in the top five cities for affordability.
The report talks about Charlotte's low housing and utility prices in particular. It's probably not everyone's experience, but GoBankingRates says Charlotteans "would be hard-pressed not to find money available to save or invest."
Houston was No. 1 on the list, followed by Omaha, Neb.; Dallas-Fort Worth, Texas; and Austin, Texas.
Coincidentally, that report came out the same day the Charlotte Chamber published an article arguing the same thing.
MI HOMES TO BUILD NEW NEIGHBORHOOD: The builder has plans for 250 new homes in a community to be named "Brookvue" near Concord. Prices are expected to begin in the mid $200,000s, and range from 2,000 to 3,500 square feet.
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Thursday, August 15, 2013
Berkshire Hathaway raises stake in Wells Fargo
Warren Buffett's Berkshire Hathaway increased its stake in Wells Fargo & Co. by 1.1 percent in the second quarter, a securities filing Thursday shows.
Berkshire Hathaway, whose stock holdings are closely followed by investors, owned 463 million Wells Fargo shares valued at $19 billion, up from 458 million shares worth $16.9 billion in the first quarter.
The second quarter was a strong one for Wells Fargo, which reported profit of $5.3 billion, an increase of 20 percent from the same period last year. Earnings per share reached 98 cents, higher than analysts’ expectations of 93 cents.
Wells Fargo is considered by Berkshire Hathaway to be one of its "Big Four" investments. In its 2012 annual report, Berkshire Hathaway said it had an 8.7 percent stake in Wells Fargo. The other companies in the Big Four: American Express, IBM and Coca-Cola Co.
In the annual report, Berkshire Hathaway said its ownership interest in the four companies is likely to increase.
"The four companies possess marvelous businesses and are run by managers who are both talented and shareholder-oriented," the report said.
So, what other actions did the Omaha, Neb.-based company run by the famed investor take in the second quarter?
Well, among other things, it bought more shares of General Motors Co. but reduced holdings in Moody's Corp., Mondelez International and Kraft Foods Group.
By the way, CNBC has put together a slideshow of Berkshire Hathaway's 15 biggest stock holdings.
N.C. bank stocks gaining in value
Just a year ago, North Carolina banks were trading only about half of their tangible book value. It's now up near 90 percent, according to an analysis by Banks Street Partners.
It's one of the more impressive gains in the Southeast, the investment bank found, though values rose in each state in the region. The percentage represents a median. The average price to tangible book value was 103 percent, skewed by a couple outliers.
CommunityOne Bancorp, at 275 percent, is trading at the highest compared to its tangible book value. Company executives pledge a return to profitability next quarter. BB&T came in second, at 210 percent, though its financial picture is much brighter.
WELLS SPONSORING MEXICAN NATIONAL TEAM: Wells Fargo says the sponsorship will last through 2016. The first game as sponosor came last night when the Mexicans defeated Ivory Coast 4-1 in New Jersey. Wells Fargo announced a sponsorship of Major League Soccer a few weeks ago.
BOVE SAYS BANK OF AMERICA WILL RALLY 100%: Rafferty Capital analyst Dick Bove is always bullish on bank stocks, but he made a bold prediction for Bank of America's stock this week. He said its price will grow 100 percent in the next one to two years, as reported by CNBC. That type of growth isn't unheard of at the Charlotte bank -- it grew by more than that in 2012. That happened, though, after the bank's shares were at $5. They're now close to $15. Bove made a similar prediction for Citigroup.
LIVE OAK GETS APPROVAL FOR PURCHASE: The Wilmington-based Live Oak Bancshares got Federal Reserve approval Wednesday for its acquisition of Government Loan Solutions Inc. The Cleveland, Ohio, company analyzes government-backed loans packaged into securities. Live Oak has gotten heavy into SBA loans in particular in recent months.
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Tuesday, August 13, 2013
Bank of America is king on Twitter
The folks over at social media marketing company ViralHeat.com passed along an infographic that describes how popular big banks like Bank of America and Wells Fargo are on Twitter and Facebook.
It does a good job laying out the info for itself, but here are a couple things that stood out.
- Bank of America is tops in Twitter followers by a long shot. It has more than 50,000 more than the next-closest, Capital One.
- Wells Fargo is mentioned the most in social media channels. That can be either a good or a bad thing, with the banking climate these days.
- Regions Bank, for whatever reason, is not very popular online. It had the highest percentage of negative comments, and nearly the smallest percentage of positive ones.
- Chase bank, part of the nation's largest bank by assets JPMorgan Chase & Co., got left out because it doesn't have a corporate Facebook page.
Here's the whole thing. Click to enlarge. You can see it even better here.
HSBC report pins profits in Southeast to internationalization
A new report covering North Carolina and the Southeast from British bank HSBC ties internationalization to higher profit margins in the region.
But it also shows that the Southeast lags every region except Texas, interestingly, for the percentage of companies with international operations. North Carolina also has the lowest percentage of jobs in the region tied to exports.
I asked Rick Lavina, executive vice president for Southeast corporate banking at HSBC based in Miami, whether it was internationalization itself that led to profits, or the fact that international companies were more likely to be large, established companies.
COMMUNITYONE PLEDGES PROFITABILITY: The Asheboro bank says it has taken the steps it needs to be "profitable on a sustained basis" starting in the third quarter, as CEO Brian Simpson put it in a conference call with analysts Monday.
The bank lost $3.2 million in continuing operations in the second quarter, but CFO David Nielsen called it the best performance in four years. The loss was smaller year-over-year, and merger expenses from combining with Bank of Granite should now be gone.
Profitability will be driven by expected improvement in net interest margin, post-merger cost-cutting, branch closings from late June, and further improvement in the bad loan book, Simpson said.
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Monday, August 12, 2013
LendingTree jumps into consumer loans
LendingTree has created a new platform to serve up personal loan offers to customers coming to its website, hoping to tap into the burgeoning sector as families become more willing to take on more non-mortgage debt.
The company, which is the best-known part of Charlotte-based Tree.com, primarily is a lead-generation company for mortgage lenders. Customers visit the website, plug in some financial details, and then receive loan offers from several different banks.
Personal loans are not secured by any collateral and are typically used from anything from debt consolidations or vacations. Interest rates are generally above 10 percent, according to Fed data.
They're growing more popular for both banks and consumers, LendingTree says.
"We see significant growth in the personal loan space as financial institutions are increasing their appetite for risk on uncollateralized loans and peer-to-peer lending fuels a new kind of investor," Chief Product Officer Nikul Patel said in a statement
To the latter part, the peer-to-peer lender getting perhaps the most press lately is Lending Club, the San Francisco-based online lender that counts former Treasury secretary Larry Summers among its directors. The company took less than a year to grow from $1 billion to $2 billion in volume, and Google took a small stake in the company in May.
N.C. banking commissioner orders money transmitter to halt
The N.C. Commissioner of Banks has ordered a money transmitter that primarily catered to Brazilian immigrants to stop doing business in the state, the office said Monday. The company had two locations in Matthews.
Global Money Remittance, Inc., had allegedly not been making transmittals as advertised for several months, and closed suddenly in April. The company was based in Florida and did business in several states and online. Its two partners in Matthews were Brascharlotte and Supermercado Brasileiro.
Brascharlotte was found to be still in possession of about $19,000 that was to be sent up to Global Money Remittance. The company cooperated with the banking commissioner's office in getting the money sent to the N.C. Department of Justice. That department is now seeking the original money-senders.
People who think they fall in that category can file a complaint here.
Massachusetts, Florida and Connecticut have taken similar actions against the company.
PNC: Charlotte payrolls rising more quickly than U.S.
National economic figures haven't looked all that great of late, but here's some good news: Charlotte should outperform the U.S. as a whole, a new outlook from PNC Financial Services says.
Payrolls in the Queen City are growing "much faster" than the country overall after a tepid start to the year, the report says. Job growth continues to be grown by business and professional services, also known as office jobs.
Finance, however, "remains a weak spot," PNC reports. "Locally, the industry is restructuring and although job loss has not been disastrous, gains will likely be inconsistent in the quarters ahead."
A few other highlights:
ON JOBS: Though Charlotte is adding jobs, the unemployment rate is still stubbornly high because in-migration is all but cancelling them out.
ON INCOME: Wage growth is finally accelerating, but it should still take another few years to make up for the median household income to bounce back from the loss of high-paying bank jobs that came during the financial crisis.
ON HOUSING: Homebuilding could come back more quickly than elsewhere because of a vacancy rate lower than its peers. The percentage of homes bought by investors, rather than individual homeowners, was 21 percent last year.
INTEREST RATES RISING, BUT NOT ON DEPOSITS: Mortgage rates are up a full point over the past few months, but a new study from GoBankingRates.com says that interest rates paid on deposits are still shrinking. Checking accounts are paying 0.11 percent on average, a decline of 3 basis points over last year, the study finds. Similar tiny returns were found on money market accounts and shorter-term CDs.
Says the managing editor, Casey Bond: "We've seen interest rates on everything from loans to bonds spike in response to recent comments from Bernanke. Unfortunately, Fed policy continues to ignore the need for low-risk sources of growth, and depositors can expect to be screwed for the foreseeable future."
THE OTHER PERSPECTIVE: Of course, from the banks' point of view, this is an opportunity. A new report from SNL shows how banks have been "getting core deposits while the getting is good." Banks like Bank of America have been bringing on money market accounts and, to a lesser extent, checking and savings accounts, that cost next to nothing, replacing higher-cost CDs. Jumbo CDs made up 18 percent of balance sheets in 2007; now they're less than 9 percent.
At BofA, money market accounts are up 11 percent, while large time deposits are down 11 percent, SNL found.
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Friday, August 9, 2013
BB&T growing education finance team in Charlotte
BB&T Capital Markets is expanding its education finance team in Charlotte and has named a new leader for the group, the bank says.
The group focuses on capital raising and advice for universities, colleges, charter schools, private schools and student housing. Education finance has certainly been in demand over the past few years as budget cuts at institutes of higher learning have put pressure on their business models. North Carolina has also seen a charter school boom after the state removed the legal cap on the number that can operate here.
Rich Harmon, who is based in Charlotte, will lead the team, BB&T said. He's a 30-year veteran of investment and commercial banking and has run $1 billion-plus in bond deals, the bank says.
Michael Braun also joins the group in Charlotte. Paula Permenter will be part of the group in Houston.
PENSION FUND BEATS BENCHMARK: State treasurer Janet Cowell's pension fund grew 9.52 percent in the fiscal year that ended in June, her office said Thursday. That's ahead of the target of 7.25 percent that's been tough to match lately. The results were bolstered by a strong stock market: The fund's equities portfolio was up more than 18 percent. Fixed income lost money.
Should Gov. McCrory sign the bill, Cowell's office will have more flexibility to invest pension fund assets. Currently, she's statutorily limited in where she can park money.
N.C. EXPORTS HIT RECORD: Exports from North Carolina grew 6 percent year over year in the first half of this year, hitting a record $14.8 billion the International Trade Administration says. Goods sent to India grew 86 percent, and exports to France were up 67 percent. Key exports, according to the government: chemicals, machinery, transportation equipment, computers and electronics, and textiles.
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Thursday, August 8, 2013
Carolina Alliance Bank, Forest Commercial Bank to merge
Carolina Alliance Bank and Forest Commercial Bank said Thursday that they plan to merge, creating a community bank that will be based in Spartanburg, S.C., and have about $385 million in assets.
The deal, which is subject to regulatory and shareholder approval, calls for the combined company to operate as Carolina Alliance Bank.
Asheville-based Forest Commercial has a small presence in Charlotte, with only a loan-production office in the city, at 122 Cherokee Road. It has just two other locations, in Asheville and Hendersonville.
Carolina Alliance is based in Spartanburg and has only one location, in Spartanburg.
Under the deal, the combined bank would have three full-service offices in Spartanburg, Asheville and Hendersonville; a loan production office in Charlotte; and a proposed branch office in Seneca, S.C.
Increased regulatory burdens on banks have some observers predicting that there will be more mergers and acquisitions in the industry.
Wells Fargo outperforms Bank of America on scorecard
Wells Fargo ranks higher than rival Bank of America on a scorecard released Thursday that analyzes profitability, capital strength and asset quality, among other things.
According to Bank Director magazine's ranking, San Francisco-based Wells is in fifth place, while Charlotte-based Bank of America is 19th, among banks with more than $50 billion in assets.
A look at how some of the other publicly traded banks with a Charlotte presence did: Fifth Third Bancorp, seventh place; PNC Financial Services Group, ninth; BB&T Corp., 11th; SunTrust Banks, 17th.
As a group, the 289 banks included in the latest scorecard performed better than those in the 2012 ranking, the magazine said. The scorecard is divided into three asset categories: $50 billion and up, $5 billion to $50 billion and $1 billion to $5 billion.
Little Rock, Ark.-based Bank of the Ozarks, which this year opened its first full-service branch in Charlotte, placed first in the $1 billion to $5 billion group. Charlotte-based community bank Park Sterling Corp. came in at No. 104 in that same asset category.
You can read the full report here.
Park Sterling Bank to focus on western N.C. growth
Rapidly growing Charlotte-based Park Sterling Bank announced that it has named a new western North Carolina region president to focus on growth in Gaston, Lincoln and Cleveland counties.
The region was largely inherited when the bank acquired Gastonia-based Citizens South Bank last year. The new position comes as Park Sterling tweaks its organization post-acquisition.
Lincoln County native Dan Boyd will take on the regional president role. He had been the chief operating officer of Citizens South. Steve Huffstetler will be the senior commercial banker in the area.
Says Park Sterling president Bryan Kennedy: "“The Gaston, Lincoln and Cleveland markets have tremendous growth potential, and are markets we have successfully served through our legacy companies since 1904. We are happy to have additional experienced, local bankers in place to serve the markets they call home.”
Park Sterling says this is a new position. Former Citizens South chief risk officer Don Flowe had a similar role in the past, when the western region included areas like Statesville, Monroe and Salisbury. He is now "community markets president," which encompasses a larger region including Greenwood, S.C., and north Georgia, Kennedy told the Observer.
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Wednesday, August 7, 2013
Wells Fargo lays off more mortgage employees
Wells Fargo laid off 126 consumer mortgage employees in St. Louis Wednesday, the St. Louis Post-Dispatch reports.
St. Louis is the latest to be hit with Wells Fargo layoffs of mortgage employees. The reductions come as the bank says higher interest rates are resulting in lower demand for homeowners to refinance. Therefore, there's not as much need for employees in that operation.
Nationwide, Wells is laying off hundreds who work in its mortgage operation. So far, no layoffs have been announced for Charlotte.
According to the Post-Dispatch story, the bank is offering the workers jobs elsewhere in the company.
Last month, The Des Moines Register reported that Wells Fargo told 350 mortgage and retail lending employees their positions are being eliminated.
Wells Fargo, American Express announce credit card deal
Wells Fargo will issue credit cards accepted by American Express' merchant network, the San Francisco-based bank said Wednesday.
The companies did not disclose the terms of the deal.
Wells Fargo plans to start piloting the cards in the U.S. this year, with a full launch starting in the middle of next year. Wells Fargo spokesman Josh Dunn said the bank is not disclosing the pilot markets.
The move comes as Wells Fargo has been working to grow its credit card business.
“We are trying to broaden our card offerings,” Wells Fargo CEO John Stumpf said last month in an interview with The Wall Street Journal. “We should double our share.”
The newspaper reported that 35 percent of the bank's customers are using a Wells credit card. That's up from 31 percent a year ago. But, as the newspaper points out, Wells Fargo, which "has the largest branch network of a U.S. bank and is the country’s biggest home lender ... has a small credit-card portfolio for a bank of its size."
Wednesday's announcement follows reports that Wells Fargo is planning to introduce credit cards that help borrowers reduce different types of debt, such as student and auto loans, they owe the bank.
In announcing the American Express deal, the companies pointed to their "joint history." According to a press release from American Express and the bank, Henry Wells, William Fargo and John Butterfield established the American Express Co. in 1850 to transport packages, valuables and goods. Two years later, Wells and Fargo formed Wells Fargo & Co.
Tuesday, August 6, 2013
Fifth Third Bancorp revises 2Q profit down
Fifth Third Bancorp said Tuesday its second-quarter profit will be $12 million lower than previously reported.
The Cincinnati-based bank, the fifth largest by market share in Charlotte, said in a securities filing that its profit for the quarter will be revised down to $582 million, or 65 cents a share.
That compares with the $594 million, or 66 cents a share, it reported for the quarter last month.
After second-quarter results were released, the bank said in the securities filing, it "obtained new information related to a litigation loss contingency that resulted in the related reserve being increased by $18 million to reflect the change in circumstances."
NCBA says slow growth is 'new normal'
The N.C. Bankers Association came out with an economic forecast Monday, and it was far from optimistic. First sentence: "The U.S. economy is stuck in a rut and will continue to disappoint for several more quarters." Consumer spending is still "in the doldrums." Employment "continues to confuse and frustrate." Manufacturing "continues to sputter." At least they say the housing and stock market will continue to do well.
What's it mean for banks? Well, profitability is getting better, but the forecast makes it seem that could come into doubt unless there's meaningful recovery. Net interest margins are about the smallest they've been, and the forecast says cost cuts to make up for it will have to slow as compliance costs keep going up.
NEW WELLS CREDIT CARD TO HELP PAY DEBT: New credit card offerings from Wells Fargo will give a 1 percent rebate that goes toward paying down a loan the customer has at another part of the bank, Retuers reports. Modeled after a six-year-old Home Rebate Card, the new cards will offer a similar benefit for car, student and other consumer loans.
The cards come at a time when consumers are still somewhat debt-averse. Philosophically, the cards are similar to a somewhat-recent Bank of America offering that gave people cash reward for paying off debt.
****This is a preview of 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, August 5, 2013
Wells Fargo Advisors reaches $4M settlement in wages lawsuit
Wells Fargo Advisors has reached a $4 million deal to settle claims it did not compensate workers for overtime hours.
The settlement, filed Friday in federal court in Missouri, is expected to result in a payment of roughly $2.6 million to those who worked for Wells from April 29, 2010, to the date when the settlement wins court approval.
An estimated 3,400 employees fall into the group eligible for the proposed settlement. Each could be paid $770, on average, before taxes. Exact payment amounts are expected to differ by employee, based on the number of weeks worked, according to court documents.
The settlement comes after Michelle Lindsay, who worked at a Wells branch office in Dallas, filed a federal Fair Labor Standards Act lawsuit in March 2012, seeking class-action approval.
Lindsay alleged that Wells did not pay her for all regular and overtime hours she worked. According to court records, Lindsay claimed Wells "implemented an unwritten policy of only paying its client associates for their scheduled hours."
According to court documents, Wells denies the allegations, saying it followed its written policies that required payment for all hours worked.
Of the $4 million, 33 percent, or $1.3 million, is expected to go to attorneys as fees. Lindsay is expected to receive $10,000 as an incentive for representing class members.
Wells Fargo names new head of commercial mortgage servicing
Wells Fargo on Monday named a Fannie Mae executive and former Wachovia director as its new head for commercial mortgage servicing.
Alan Kronovet will be based in Charlotte, like his predecessor, Jose Becquer, who died in April.
Kronovet will oversee roughly 800 employees in Charlotte, the San Francisco Bay area, New York and India, the bank said.
A former managing director for Wachovia Securities, Kronovet went to work for mortgage-finance behemoth Fannie Mae, where he served as head of multifamily mortgage operations.
He is expected to start working for Wells Fargo in the middle of August.
He could not be immediately reached for comment.
SunTrust to finance commercial mortgages for MetLife
MetLife and SunTrust Banks, two companies with substantial presences in Charlotte, on Monday announced a deal in which the bank will finance commercial real estate mortgages originated and managed by the insurance company.
Under the three-year agreement, SunTrust will fund up to $5 billion in mortgages for MetLife's new real estate investment management platform.
According to MetLife's 2012 annual report, it originated $9.6 billion in commercial mortgages last year, down from $11.1 billion in 2011.
“Our goal is to be one of the top five institutional real estate investment managers, and with this mandate from SunTrust, we are confident the company is headed in the right direction,” Robert Merck, global head of MetLife Real Estate Investors, said in a press release.
Commercial mortgages make up the largest portion -- roughly 75 percent, according to the annual report -- of the mortgages MetLife holds as investments. The largest percentage of those commercial mortgages -- 19.7 percent, or $7.9 billion -- are in south Atlantic states.
SunTrust's mortgage banking division lost $76 million in the second quarter, down from a loss of $116 million a year ago.
This year, the New York-based insurer announced that it will open a U.S. retail hub in Charlotte, in Ballantyne Corporate Park. Meanwhile, the Atlanta-based bank’s new regional headquarters building is under construction in SouthPark.
Friday, August 2, 2013
PNC tests 'pop-up' branches
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A PNC 'pop-up' branch. Photo courtesy of PNC
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The Pittsburgh-based company, parent of PNC Bank, has opened what it calls a "pop-up" branch in Atlanta, according to a story by American Banker. The 20-by-8 temporary branch is, basically, a marketing tactic, intended to introduce the brand, the story says. The bank already has typical branches in Atlanta.
Here's an excerpt from the story:
The latest test branch will remain open seven days a week for about three months and is meant to engage people off the streets.
"The pop-up branch is one way we are trying to give more [people] more exposure to PNC," says Todd Barnhart, executive vice president of branch banking at PNC. "If a [bank] is not out there testing and learning from its customer base today, it will quickly get left behind. …You can only go so far with a lab."PNC has branches in the Charlotte area. A spokesperson declined to comment Friday on if the branches will pop up in Charlotte.
PNC is not the only bank to test smaller branches. Wells Fargo this year began experimenting with a smaller, paperless branch in Washington, D.C.
The industry is reinventing branches as foot traffic to teller lines declines, thanks to more people shifting to online and mobile banking. As a result, some banks are outfitting branches with fewer tellers, more specialists and more technology, such as tablet computers, which bankers are using to show off their mobile platforms to customers.
Thursday, August 1, 2013
Bank of America faces new federal civil charges
New legal troubles aren't over yet for Bank of America. The Charlotte bank faces more federal civil charges -- this time by the U.S. Department of Justice over the bank's securitization of jumbo mortgages, the bank disclosed in a quarterly filing Thursday.
The Securities and Exchange Commission has told the bank it plans to file charges as well. These come on top of a New York attorney general investigation into mortgage-backed securities that was already disclosed.
The bank's response: "The Corporation has been in active discussions with senior staff of each government entity in connection with the respective investigations and to explain why the threatened civil charges are not appropriate."
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Bank of America waits to learn about class-action request in HAMP case
A hearing on a class-action certification request in case involving homeowners suing Bank of America over denied mortgage modifications was held Thursday, although no ruling has been made.
The request is in the hands of Judge Rya Zobel, of U.S. District Court in Massachusetts. It’s unclear when Zobel might rule.
The homeowners are claiming that the Charlotte-based bank rejected eligible borrowers seeking to reduce their loan payments under the federal Home Affordable Modification Program. Launched in 2009, HAMP was designed to help struggling homeowners avoid foreclosure.
In June, seven former Bank of America employees filed statements claiming that they were promised bonuses and gift cards if they delayed or rejected modification requests.
The bank has denied those allegations. Last month, in response to the former workers’ claims, the bank said the employees had made “wild misrepresentations” about their actual roles in HAMP.
According to court documents, the homeowners are seeking to certify 26 classes involving borrowers from 26 states.
Bank of America has objected to the class-action request.
More bank mergers, acquisitions expected in N.C.
Last week, when Charlotte-based Park Sterling Corp. reported its second-quarter earnings, the community bank’s chief financial officer made it clear that it’s interested in acquiring other banks.
Indeed, at least three times during a call with analysts, David Gaines mentioned the bank’s openness to merger and acquisition talks, describing at one point “a burgeoning M&A market.”
That announcement came less than a year after Park Sterling acquired Gastonia-based Citizens South Banking Corp., in a deal completed in October.
And the announcement also supports what banking industry officials have been saying: Expect more bank mergers and acquisitions in North Carolina and elsewhere, thanks to post-recession federal regulations.
“We are going to experience a pickup in that activity over the next two and three years,” said Harry Davis, economist for the Raleigh-based N.C. Bankers Association, a trade group.
The new regulations, industry officials say, are driving up costs for banks, making it harder for small ones to compete. They say that is pushing such banks to consider merging with others or be acquired, in order to create a bigger financial institution that can spread out the higher expenses.
“Right now in North Carolina, you’ve got about nine or 10 banks that are around $2 billion in asset size,” Davis said. “In my opinion, two, three, four of those are going to merge.
“Then you’ve got a group of banks under $1 billion. It’s going to be more and more difficult for them to compete at that size, so they are going to either be acquired or merge with other institutions of a like size.”
The number of federally insured financial institutions in North Carolina has been falling since 2008. Thad Woodard, president of the bankers association, estimated that the group’s membership was approximately 150 before the downturn.
It’s fallen about 23 percent since then, he said, describing membership as “shrinking fairly rapidly." He attributes that largely to mergers and acquisitions.
Last year, the state had 119 federally insured financial institutions, down 14 percent from 138 in 2008, according to Federal Deposit Insurance Corp. data.
Meanwhile, growth of state-chartered financial institutions in North Carolina has been anemic. So far this year, none have been chartered. From 2008 to 2012, nine were chartered, down from the 22 chartered from 2003 to 2007.
“The thing that is very concerning to us is that we are not birthing any new banks,” Woodard said. “We have a complete nonexistence of upcoming or even prospective new banks across the state.”
But some say there are barriers to bank mergers and acquisitions. Buyers are looking to purchase banks for as cheaply as possible, while banks are looking for a fair price.
And will more mergers and acquisitions be good for consumers? Davis, for one, says yes, adding that they will result in cost-savings for banks, which will benefit customers.
“I don’t think it would hurt consumers at all. The banks that remain will be stronger. They will be more profitable. They will be able to offer a wider and better array of products to their customers,” he said.
“There is too much brick and mortar in banking in North Carolina and nationwide,” he said. “We have entirely too many banks and too many bank offices.”
According to the N.C. Office of the Commissioner of Banks, which regulates state-chartered financial institutions, account-servicing complaints fell to 385 last year from 576 in 2008. So far this year, the office has received 180 such complaints, putting it on track to have about the same amount as last year.
It's important to keep in mind, though, that the number of state-chartered financial institutions has fallen, too. That figure, excluding trust companies, is down from 92 in 2008 to 69.
That could be part of the reason complaints are down.
LendingTree jumps into borrower education
LendingTree has released a series of web videos that teach mortgage-related concepts, the latest financial institution to get into customer (or potential customer) education.
The company is the flagship brand under the Charlotte-based Tree.com mantle. It brings together mortgage offers from a number of banks to customers looking to buy or refinance.
A LendingTree executive said in a press release that the company wanted to "educate consumers so they feel more confident in the mortgage process."
Charlotte's big banks have recently gotten into this space as well. Bank of America announced in April a partnership with the nonprofit online Khan Academy to publish and promote a series of financial literacy videos.
Wells Fargo's newly redesigned website also more prominently features education and information around its product lines.
Here's an example of LendingTree's new videos:
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