Cooper: Military needs more protections from predatory lenders

North Carolina Attorney General Roy Cooper is among 22 state attorneys general who raised concerns Monday that proposed regulations intended to better protect members of the military from predatory lenders do not go far enough.

Cooper and the other attorneys general voiced the concerns in a letter to the U.S. Department of Defense, which proposed the regulations earlier this year.

The regulations are designed to close loopholes in the Military Lending Act, which Congress passed in 2006 to establish protections for active-duty military and their dependents dealing with predatory lenders.

Among other protections, the act bans members of the military from being charged more than 36 percent in annual interest on certain consumer loans. Payday, auto title and tax refund-anticipation loans are among those covered by the cap.

But attorneys general and regulators say lenders have used loopholes in the act to prey on members of the military. Richard Cordray, director of the Consumer Financial Protection Bureau, a federal regulator, in September said some lenders lurk just outside of military bases to offer loans that fall just beyond the act's limits.

The letter from the attorneys general praises the Department of Defense for proposing regulations that will close loopholes in the act. But the attorneys general say the proposed regulations still leave borrowers exposed to abusive lending practices.

One problem with the proposed regulations is they exempt certain fees, such as application fees, if they are deemed "reasonable and customary," the letter says. That could allow lenders to charge abusive fees to borrowers, the letter says.

The other problem with the proposed regulations is they fail to address predatory practices involving loans backed by collateral, the letter says. Such loans are exempt from the act, but lenders have regularly used the exemption to engage in abusive practices that Congress sought to ban with the act, the letter says.

"The men and women who serve to protect our nation deserve stronger protections from unfair loans," Cooper said in a statement. "These reforms need to be comprehensive and fix the problems we're seeing service members face with unscrupulous lending practices."

HomeTrust hires president to lead expansion in Charlotte

Asheville's HomeTrust Bancshares said this week it has hired a market president to lead the lender's expansion in Charlotte, which it entered by acquiring Charlotte's Bank of Commerce earlier this year.

HomeTrust, the holding company for HomeTrust Bank, said longtime Charlotte-area banker Jeff Mylton will officially take on the new position Jan. 1. Mylton was most recently with Fifth Third Bank.

Jeff Mylton

The hiring comes after HomeTrust Bank entered the coveted Charlotte market this summer through its roughly $10 million acquisition of Bank of Commerce. Before that deal, HomeTrust had locations as close as Cherryville, Shelby and Lexington but none in Mecklenburg County.

The Bank of Commerce deal is part of HomeTrust's recent expansion efforts. In January, HomeTrust said it would acquire Jefferson Bancshares Inc. in East Tennessee. Last month, HomeTrust announced that it completed its acquisition of 10 Bank of America branches in Virginia and Eden, N.C.

"Entering the Charlotte market was critical to growing our N.C. franchise and further supports our strategic growth plan as a regional community bank," HomeTrust President Dana Stonestreet said in a statement. "Jeff Mylton's experience and reputation will be critical in bringing HomeTrust Bank to the market and growing commercial relationships."

By mid-February, HomeTrust Bank plans to complete the re-branding of Bank of Commerce's former headquarters on Queens Road, where Bank of Commerce also had its only branch.

The Bank of Commerce deal brought an end to a one-branch bank that was founded in 2006 by Charlotte community banker Wes Sturges and that focused on commercial clients.

It also marked yet another consolidation in the banking industry, which continues to see declining numbers of banks through mergers and acquisitions.

Banking industry officials say that costly post-financial crisis regulations are a large driver of those consolidations. Those new regulations, they say, are driving up costs for banks, making it harder for small ones especially to compete. They say that is pushing banks to merge or be acquired to create a bigger financial institution that can spread out the higher expenses.

HomeTrust Bancshares had $2.21 billion in assets as of the end of September. HomeTrust Bank, founded in 1926, is a community bank with operations in the Carolinas, Tennessee and Virginia.

Nixon's son-in-law topples pricey vase at BofA art event

Edward Cox

When Bank of America held an art-preservation event at its New York offices last week, the mood was shattered for a moment when a prominent guest accidentally broke a vase valued at thousands of dollars.

That guest was none other than the son-in-law of President Richard Nixon, Edward Cox, who serves as chairman of the New York Republican Party.

The event, hosted by Bank of America CEO Brian Moynihan on Thursday, was designed to discuss the importance of restoring the art and artifacts of New York City's St. Patrick’s Cathedral. According to a story by the New York Post, Home Depot co-founder Kenneth Langone was among the attendees.

Moynihan kicked things off by announcing a $1 million commitment from the Charlotte-based bank to restore one of the cathedral's prominent stained-glass windows.The bank made the donation as part of its ongoing art-conservation efforts.

But the room's attention was abruptly shifted by a crashing sound when Cox knocked over the vase. Here is an excerpt from the New York Post story:

... a witness reports, “the peace was shattered when Ed Cox accidentally knocked over a 4-foot-tall antique vase in the center of the room. It fell to the floor and shattered with a terrible, piercing, sound which stopped the entire room.” The source added, “Ed nervously tried to edge away from the wreckage while the event staff looked mortified." ...

A Bank of America spokesman tells the Observer the vase was worth $3,600 and made in 2007.

David Laska, a spokesman for Cox, confirmed the incident in a statement to the Post:

"The vase was placed on a very small table, and after it broke, Bank of America officials apologized to Mr. Cox. They said this had happened before — other items that were placed on that table had previously been broken.

“No one is ever happy when a vase falls and breaks, especially a nice vase. But they did not ask him to pay for the item. They acknowledged the placement of the vase was ill-advised.”

Bank of North Carolina names new Charlotte-area president

Bank of North Carolina has named a new market president whose territory includes the Charlotte metropolitan area.

The High Point-based lender announced Wednesday that it has promoted Rob Ellenburg to the role of North Carolina southern region market president. In that position, he will be responsible for leading the commercial and retail banking teams for the Charlotte metro area and Buncombe and Henderson counties.

Ellenburg is replacing Bill Connolly, who has been named chief commercial banking officer. Ellenburg most recently served as Charlotte area executive for the bank.

According to a press release from the bank, Ellenburg serves on the board of directors of Junior Achievement of Central Carolinas and the board of the Lake Norman Giants football association.

Bank of North Carolina's parent company is BNC Bancorp. It is the ninth largest bank in the Charlotte region by deposits, according to federal data.

In April, the bank announced it completed its acquisition of South Street Financial Corp., a $26 million deal that gives BNC Bancorp a deeper presence in the Charlotte area.

Moynihan not alarmed about falling oil prices

Bank of America CEO Brian Moynihan said Tuesday he does not see falling oil prices as a large threat to the Charlotte-based bank.

While the recent decline in oil prices has been good news for consumers, it could be bad for some banks. One concern is that dropping oil revenues could lead to losses on loans banks have made to the energy industry. As oil prices have fallen, investors have been wondering how the decline might impact the banks for which they hold stock.

Moynihan, speaking at an investor conference, said Bank of America issues loans to "strong companies." In addition, the bank's overall business is well-balanced, he said.

"We don't see a big problem" with where oil prices have fallen, he said. "We're very comfortable with the underwriting we've done."

So just how much in energy loans do the biggest U.S. banks have?

According to a report -- with the title "Large U.S. bank oil exposure: There won't be blood" -- which was issued last week by RBC Capital Markets, Citigroup has the largest percentage of outstanding loans tied to the oil industry: 6.82 percent.

Bank of America comes in at 2.3 percent. Wells Fargo has less, at 1.8 percent.

The average exposure based on all 20 big banks in the report is 2.4 percent.

Movement Mortgage continues expansion push

Virginia-based Movement Mortgage, co-founded six years ago by a former Panthers player, announced last week that it has hit an employment milestone: the hiring of its 1,500th employee.

The announcement comes as the privately held mortgage bank, which has a large operation in Charlotte, continues its fast expansion as its seeks to gain market share.

Movement has grown from just four employees when it was founded in 2008 by ex-Panthers tight end Casey Crawford and business partner Toby Harris. Last year and the year before, Inc. magazine named it to its list of fastest-growing private companies in America.

It did not make the magazine's list this year.

Movement's strategy is to make loans largely for home purchases, not to refinance existing mortgages. It says its goal is to process loans within seven business days. According to its website, it is processing more than 70 percent of loans in that time frame.

The company is adding employees at a time when the mortgage market continues to see a shift toward home purchasing rather than refinancing. The Mortgage Bankers Association expects purchase originations to increase 15 percent next year as refinance originations decrease 3 percent. Refinancing activity began declining last year as interest rates rose.

This year, Movement has added about 50 employees in the Charlotte region, where it employs about 200 people, the company said.

The company says it operates in 40 states and has about 300 licensed offices. It says it employs the most in Virginia Beach, where it is headquartered, with about 375 employees.

The company went by the name New American Mortgage until last year.

Ridgemont Equity acquires defibrillator distributor

Charlotte-based private equity firm Ridgemont Equity Partners announced Wednesday it has acquired Allied 100, a Wisconsin-based distributor of portable defibrillators.

Terms of the deal were not disclosed.

Allied was founded in 2002. It owns AED Superstore, which distributes automated external defibrillators and parts and accessories.

Ridgemont was spun out of Bank of America in 2010. The firm's strategy is to make middle-market investments of $25 million to $100 million in a variety of industries, including energy, health care and telecommunications.

Pittenger's banking bill wins House OK

Rep. Robert Pittenger's bill directing the federal government to study a regulation that limits certain withdrawals and transfers from savings accounts won unanimous approval Tuesday from the U.S. House of Representatives.

The bill takes aim at 1980s-era federal banking rules that restrict bank customers to no more than six withdrawals and transfers from their savings account per month.

The House approved it 422-0. It now heads to the Senate. (Video of Pittenger speaking today in support of his bill is below.)

Pittenger, a Republican whose district includes part of Mecklenburg County, has called the regulation obsolete in an era of online and mobile banking. In general, the limit on withdrawals and transfers applies when those transactions are done outside the bank, such as online or by phone.

Those supporting the bill include the National Association of Federal Credit Unions, which criticized the limit in a letter Tuesday to House Speaker John Boehner and House Minority Leader Nancy Pelosi.

Among other complaints, the association said credit union members could be hit with fees if they go over their monthly quota of transactions between savings and checking accounts. The association called the rule a "prime example of a regulation that hasn't been reconsidered by Congress ... in far too long."

Pittenger's banking bill headed for House vote

A bill by Rep. Robert Pittenger that takes aim at 1980s-era federal banking rules that limit certain withdrawals and transfers from savings accounts is scheduled for a Tuesday vote by the House of Representatives.

In July, the House Financial Services Committee approved the bill, House Resolution 3240, which directs the Government Accountability Office to study Regulation D. The regulation restricts bank customers to no more than six withdrawals and transfers from their savings account per month.

Generally speaking, the limit applies when such transactions are done outside the bank, such as online. Pittenger has said credit unions report that their customers hit the six-transfer limit quickly when they bank online. The Republican, whose district includes part of Mecklenburg County, has called the regulation obsolete at a time of widespread online and mobile banking.

"This legislation will directly impact hardworking American families who currently encounter roadblocks when trying to actively manage their finances online,"  Pittenger's office said in a statement Monday. "The goal is to reform regulations in a way that still protects the financial system while allowing families more freedom to manage their finances using modern technology."

If the House approves the bill, it would head to the Senate, where it would require Senate Majority Leader Harry Reid's approval to send it to the Senate Banking Committee.

'Twelve Days of Christmas' to cost you 1 percent more

Here's some good -- and bad -- news on this Cyber Monday from PNC Financial Services Group.

According to the Pittsburgh-based lender's 2014 "Christmas Price Index," an annual tongue-in-cheek economic analysis, buying all of the items in the classic “The Twelve Days of Christmas" song would cost you a total of $27,673.21 -- only 1 percent more than last year's total.

That's the cost to buy everything in the song -- from the partridge in a pear tree to the 12 drummers drumming -- at a store (as opposed to online).

The 1 percent increase is close to the U.S. government's Consumer Price Index, which stands at 1.7 percent for the past 12 months through October. When volatile food and energy prices are removed, the Consumer Price Index is up 1.8 percent.

According to the PNC report, in its 31st year, tumbling energy costs and inflation remaining calm are behind the "tame" increase in the Christmas Price Index.

That's the good news.

The bad news is for online shoppers, who would pay $42,959.07 to buy their true love all of the song's items. That's $15,285 more than if the items were bought in person -- and a whopping 8 percent more than it cost to buy the items online last year.

So if you're looking to save, you might want to actually go into a store to buy your six geese-a-laying.

Just be sure to put some newspaper or something on the floor and seats of your car for the ride home.

Republicans question BofA settlement funding 'activist groups'

Republican lawmakers are questioning a requirement in recent U.S. Justice Department settlements with lenders, including Bank of America's $16.7 billion accord, that the banks donate money to housing counseling agencies, The Wall Street Journal reported Tuesday.

The Journal reports that the lawmakers want to know how the Justice Department determined that the banks, including Citigroup, be required to donate money to the housing counseling agencies approved by the Department of Housing and Urban Development.

Here's an excerpt from the story:

The groups are meant to help homeowners avoid foreclosure. But in a letter dated Tuesday and reviewed by The Wall Street Journal, Rep. Bob Goodlatte of Virginia and Rep. Jeb Hensarling of Texas describe some of the nonprofits, such as National Council of La Raza and NeighborWorks America, as left-wing “activist groups.”

In their letter, the lawmakers also point out that Bank of America and Citigroup get extra credit toward meeting their consumer-relief obligations when they donate to the housing groups: a $2 credit for every $1 donated. The banks get less credit for actions like forgiving mortgage principal for homeowners who owe more than their homes are worth.

“The settlements appear to serve as a vehicle for funding activist groups rather than as a means of securing relief for consumers actually harmed,” wrote Mr. Goodlatte, who is chairman of the House Judiciary Committee, and Mr. Hensarling, who is chairman of the House Financial Services Committee.

The Justice Department didn’t immediately have a comment, the Journal said.

The Journal also points out that the required donations are a relatively small part of the settlements.

Bank of America must donate at least $20 million to the housing-counseling agencies, out of $7 billion set aside for consumer relief in its settlement. Citigroup, which reached a $7 billion settlement this year, is required to donate at least $10 million, out of $2.5 billion set aside for consumer relief.

Wells Fargo plans to modify student loans for struggling borrowers

At a time when high student loan debt has made national headlines, Wells Fargo has announced a program to lower interest rates on eligible private student loans.

The program is designed to help people with a Wells Fargo private loan who are experiencing "financial hardship or distress," the San Francisco-based lender said in announcing the program this week. The lender said it will review borrowers' financial situations on a case-by-case basis to determine eligibility for a short- or long-term loan modification.

If a borrower is found to be eligible for a modification, Wells Fargo will lower their interest rate to make the loan payment affordable based on their income, the lender said.

The move comes as Wells Fargo has continued to offer student loans even as other lenders have backed away from them. Bank of America, for example, has gotten out of the business.

The modification program also comes as regulators have been scrutinizing the private-loan industry.

For example, earlier this year the Consumer Financial Protection Bureau released a report on complaints about the industry’s practice of placing borrowers in default even when their loans are current and in good standing.

Last month, the bureau's ombudsman said that while federal student loans have various loan modification options to help borrowers avoid default, "private student loan servicers and lenders may not make it easy for borrowers to get help in times of distress, which may have consequences for not only your financial future, but also for the broader economy."

Wells Fargo is not the only lender offering to modify student loans.

Discover, based in Riverwoods, Ill., this week announced it is also looking to introduce a repayment assistance plan for student loans next year. The details of that plan are still being determined, the company said.

Wells Fargo said people who have one of its private student loans and are experiencing financial hardship can go to https://www.wellsfargo.com/student/repay/ or call  (800) 378-5526 to learn about the options to repay.

BB&T CEO: Apple Pay should be subjected to regulations

BB&T CEO Kelly King is among bankers who have expressed concerns about new regulations banks have been subjected to since the financial crisis.

A few years ago, for example, he warned that the Dodd-Frank financial overhaul act will cause thousands of small banks to disappear.

But this week, King called for regulations — for Apple's new payments system, that is.

King said Apple Pay, which Apple unveiled in September, and others like it should be subject to the same regulations as the biggest U.S. banks to head off attacks by terrorists and computer hackers, according to a Bloomberg story on Friday.

Here's an excerpt from that story:

The possibility that a terrorist hacks into the financial system through a third-party payments company is a “greater threat” than if a similar attack were leveled against a community lender, King said yesterday in an interview. “We have to start raising awareness of this issue.”

Regulators should consider whether such firms qualify as systemically important financial institutions, King, 66, said at a panel discussion in New York at the Clearing House annual conference. Such a designation could lead to tighter capital, leverage and liquidity rules like those faced by banks. While King said he favors healthy free-market competition between banks and nonbanks, industry regulations make that impossible, he said.

“We are headed toward a socialist system,” he said, smiling and drawing laughs from the audience. “My hope is that going forward we will have a healthy shadow and regular banking system” all subject to a similar regulatory regime, he said. 

Speaking of the "shadow" banking system, King has talked about that before. For example, he's previously traced the financial crisis to the development of the shadow banking system over the past few decades.

Here's what he said about that in a 2011 interview with the Observer:

Q. A lot of people, though, suffered in the financial crisis and some would say banks didn't look out enough for customers. What would you say to that?

A. I would say there's some truth to that. There are some customers that have been abused, and I'm ashamed of that for the broad financial services industry.

I will say that the vast majority of that occurred in the shadow system, which was not part of what I would call the banking system. These independent brokers that were being paid big fees just to get that little old lady to sign the loan and then ship it off — that's a horrible system. And those people have a right to be mad and those people who perpetrated those injustices should be dealt with.

BB&T is among large banks that have signed on to ApplePay so that their customers can tie the payments system to their bank accounts.

In an October interview with Bloomberg TV, King said BB&T wanted to make ApplePay available to its customers. "We're very happy to be a part of it," he said in the interview.

BB&T is based in Winston-Salem. The regional lender is the third-largest bank by market share in the Charlotte metro area.

On an unrelated note, King, speaking at that same conference where he made the Apple Pay remarks, expressed concerns about the "incredible" risk U.S. banks are taking in corporate and commercial lending. Here's a link to a Reuters story on that.

BofA to get Supreme Court hearing on second mortgages

The U.S. Supreme Court has agreed to hear two cases in which Bank of America has questioned the practice of voiding second mortgages when homeowners file for bankruptcy protection.

At issue is allowing people in Chapter 7 bankruptcy to "strip off" second mortgages on an underwater home -- one for which the mortgage balance exceeds the home's current value. Courts have been divided over the practice.

This week, the Supreme Court agreed to hear two cases involving Florida homeowners with second mortgages held by the Charlotte bank. The bank has argued that the bankruptcy code does not permit the mortgages to be eliminated.

The hearing comes at a time when many homeowners remain underwater since the housing bubble burst.

In the third quarter of this year, 8.1 million U.S. residential properties were "seriously underwater," according to data firm RealtyTrac. That means the amount still owed on each of those properties is at least 25 percent more than their estimated market value.

Wells Fargo names former Wachovia exec to its board

Wells Fargo said Wednesday it has named to its board of directors a former member of the Federal Reserve’s Board of Governors and former Wachovia executive.

Elizabeth Duke will join the board of the San Francisco lender effective at the start of next year and also serve on the board's risk committee. The committee oversees, among other things, how Wells Fargo manages major risks it faces.

Duke was on the Fed's board from August 2008 to August 2013. She was an executive vice president for Wachovia from 2004 to 2005. Wells Fargo acquired the Charlotte-based lender three years later.

In a statement, Wells Fargo said Duke meets New York Stock Exchange standards for an independent director. Under those rules, a director can't be considered independent if they are currently an employee of the company on whose board they sit or have been an employee of that company in the past three years.

Wells Fargo said Duke never worked for Wells Fargo after she left Wachovia.

As a board member, Duke will be automatically be granted a stock award worth about $53,000 on Jan. 2, according to a securities filing.

Last year, total compensation for board members ranged from $114,262 for the lowest-paid member to $344,005 for the highest paid. Those figures include stock awards, among other things.

Duke's appointment increases the number of Wells Fargo board members to 15.

Wells Fargo is not the only big U.S. bank to have a former member of the Federal Reserve’s Board of Governors on its board. Bank of America board member Susan Bies served on the Fed's board from 2001 to 2007.

Staffing firm says banking biz growth created need for bigger offices

Staffing company Ascendo Resources has relocated its Charlotte operation to a larger office, a move the company says was largely driven by growth in its banking business.

The company has moved out of the SouthPark Towers office complex, where it has been since entering the Charlotte market last year, to the Rotunda Building, which is also in SouthPark. The Rotunda Building is at 4201 Congress St.

Although it's a move of only about 400 yards, it gives Ascendo more space. The company said it has gone from 500 square feet at SouthPark Towers to now 2,500 square feet in the Rotunda Building.

A ribbon-cutting for the new office was held last week.

The move follows Ascendo's addition earlier this year of a banking division to its Charlotte operation. The company said it added the banking division to meet rising demand for risk and compliance positions in Charlotte's financial sector.

Nationwide, demand for risk and compliance positions in banking has been growing, in large part because of new regulations created in the wake of the financial crisis.

Since entering the Charlotte market, Ascendo's overall Charlotte operation has grown to seven recruiters, Ascendo said. It says it plans to hire 13 additional people for its Charlotte operation over the next year to meet growing demand to place employees in a variety of industries. 

Here's an excerpt from the company's press release about the new office:

From its new location, Ascendo will focus on placing temporary and permanent candidates throughout several specialized industries. The company’s new office was specifically designed to fit its unique culture and is strategically located within the SouthPark business district of Charlotte, which is home to some of the city’s biggest companies including Coca-Cola and Wells Fargo. Ascendo is actively looking to grow and expand its staff and is looking to hire more sales associates with experience within its targeted industries.

“Charlotte’s strong business climate makes it one of most attractive places for both job seekers and major corporations, so we’re excited to have a more permanent location that reflects our corporate identity,” said Rick Ferretti, managing director and head of Ascendo’s Charlotte office. “Since we began our operations here, we have leveraged our strong industry knowledge to make many great connections for our clients while ensuring a seamless hiring process.”

Report: BofA tops in net branch closures

Bank of America posted the biggest net decline of U.S. branches of any lender during the third quarter, as banks nationwide continue to shed locations, according to a report released Friday.

The Charlotte-based bank posted a net decrease of 41 branches in the quarter, the report by data firm SNL Financial shows. The bank opened one branch in the quarter and closed 42.

To be sure, many of the banks that had large net declines in branches in the quarter are among the biggest lenders in the U.S. 

JPMorgan Chase & Co., the largest U.S. bank by assets, was in second place, with a net decrease of 31 branches (it opened 12). Regional lender SunTrust Banks was in third place, with a net decrease of 22 (it did not open any during the quarter).

Bank of America, like other lenders, has said it does not need as many branches, as more customers use mobile banking and other self-service banking options.

Branches are also expensive for banks to operate at a time when financial institutions nationwide are trying to cut costs. According to SNL, many lenders say branch closures also let them focus on core markets.

Over the past four quarters, Bank of America has posted 148 net branch closures, the report says. So far this year, the bank has completed the sale of 84 branches.

Bank of America, the second-largest U.S. bank by assets, has just under 5,000 branches now, about 700 fewer than at the end of the third quarter in 2011. The bank had 4,975 branches as of Nov. 5.

Bank of America's chief financial officer told investors last month that even as the bank trims branches, customer satisfaction scores continue to improve.

In the past year or so, Bank of America has also eliminated drive-up teller service at some of its branches across the U.S., including in the Charlotte region. The bank said too few people were using the lanes to justify continuing the service.

McColl to be inducted into Entrepreneur Hall of Fame

Former Bank of America CEO Hugh McColl Jr. will be inducted into Queens University of Charlotte's Carolinas Entrepreneur Hall of Fame during an event next week.

McColl helped build Charlotte-based Bank of America into a coast-to-coast banking giant. The Hall of Fame, though, honors people based on entrepreneurship. To that end, McColl's induction is based on the investment bank he launched and the private equity firm he co-founded -- both after leaving Bank of America.

O. Temple Sloan Jr., founder of General Parts International, and Craig Wall Sr. and Craig Wall Jr., both of Canal Industries, will also be inducted during the Nov. 20 event at Quail Hollow Club. The Walls are being honored posthumously.

Queen's business school, which bears McColl's name, founded the Hall of Fame in 2010.

McColl retired as Bank of America's chief executive in 2001. He later launched an investment bank called McColl Partners and co-founded the private equity firm Falfurrias Capital Partners.

BB&T to acquire Pennsylvania bank for $2.5B

BB&T Corp. said Wednesday it is acquiring Pennsylvania's Susquehanna Bancshares, a move that increases the regional lender's footprint in the mid-Atlantic region.

Winston-Salem-based BB&T said the cash-and-stock deal is worth approximately $2.5 billion. It still needs approval from regulators and Susquehanna shareholders.

The deal also marks BB&T's second acquisition of another lender in as many months. It's the latest example of growth for BB&T, which earlier this year entered into agreements to buy branches in Texas from Citibank.

It would be one of the largest acquisitions in the banking industry since the financial crisis. According to data company SNL Financial, it ranks as the sixth-largest whole bank deal since 2009 and the second-largest since 2013.

BB&T said the purchase of the Lititz, Pa., lender will result in the formation of three new banking regions in Pennsylvania and New Jersey, two states in which the bank currently does not have operations.

BB&T said Susquehanna has $18.6 billion in assets, $13.6 billion in deposits and 245 branches in Pennsylvania, Maryland, New Jersey and West Virginia. BB&T currently has about $187 billion in assets.

For some lenders, mergers and acquisitions are an attractive concept. Such growth can, among other things, allow them to spread out regulatory costs that have been rising since the financial crisis.

In an interview with the Observer in September, BB&T CEO Kelly King said regulations put into effect since the crisis, such as those under the Dodd-Frank Act, have slowed bank mergers and acquisitions. But now “sellers are ready to talk,” he said.

The deal is also expected to increase BB&T's costs at a time the lender is trying to lower them.

Its expenses in the third quarter were higher than some analysts expected. BB&T reported $1.6 billion in non-interest expenses, up by $85 million from a year ago. The lender attributed the increase largely to the early elimination of debt.

BB&T cut its headcount companywide by 800 in the third quarter, including an undisclosed figure in Charlotte, as part of an effort to cut expenses.

BB&T said it expects the Susquehanna purchase to result in roughly $250 million in pre-tax merger and integration costs. But BB&T also said it expects to see annual cost savings of about $160 million from the acquisition.

The purchase comes just two months after BB&T Corp. announced a deal to acquire The Bank of Kentucky for about $363 million in stock and cash. That deal marked BB&T’s first acquisition of another lender since it acquired Florida’s BankAtlantic in 2012.

Wednesday's deal also comes after BB&T in September announced plans to buy 41 branches in Texas from Citibank. That announcement came three months after BB&T purchased nearly two dozen Texas branches from Citibank.

BB&T employs roughly 1,900 people in the Charlotte area across various business lines.

It is the third-largest lender by market share in the Charlotte metropolitan area.

Report: Affluent investors prefer BofA, Wells Fargo

Bank of America and Wells Fargo are the most popular primary banks among affluent investors, a new report shows.

According to the annual survey by Spectrem Group, a combined 32 percent of investors with a net worth between $5 million and $25 million prefer Charlotte-based Bank of America and San Francisco-based Wells Fargo over other financial institutions.

New York-based JPMorgan Chase & Co. came in third place, with 11 percent of affluent investors preferring it as their primary bank.

The findings are surely good news for Bank of America CEO Brian Moynihan and Wells Fargo CEO John Stumpf. That's because both banks have been targeting "mass affluent" customers, pushing to sell more products and services at a time when revenue growth for the banking industry overall remains weak.

For example, Bank of America this summer announced a new rewards program as part of Moynihan’s strategy to expand the bank’s relationship with its roughly 8 million mass-affluent customers, meaning those with $50,000 to $250,00 in assets. Bank of America has also been adding employees in its branches to work with such customers, which the bank refers to as its “preferred banking” clients.

Wells Fargo's efforts to increase its business with the mass affluent include a new credit card that offers rewards to world travelers. The bank unveiled the Propel World credit card in May. It is accepted on the American Express network.

According to the Spectrem Group report, the wealthiest of wealthy investors are more likely to pick name-brand institutions for their primary banking services: Among investors with a net worth of $15 million to $25 million, 20 percent use Wells Fargo; 17 percent, Bank of America; 12 percent JPMorgan; and 7 percent, Citibank.

Some other noteworthy findings from the report:

• The youngest affluent investors prefer Wells Fargo as their primary bank. Of investors under the age of 48, 20 percent chose Wells. 
• Older affluent investors gravitate to Bank of America. Of investors over 64, 18 percent chose the lender. Of affluent investors between the ages of 48 and 54, JP Morgan and PNC Financial Services group each had 15 percent.
• Wells Fargo was not as popular among affluent investors as it was in the 2013 report, when 20 percent chose it as their primary bank.
• But Bank of America grew in popularity from the 2013 report, when 14 percent of investors chose it as their primary bank.

Bankers hope Republicans provide regulation relief

Now that Republicans have seized control of Congress, bankers are hoping they might see a loosening of regulations created in the wake of the 2008 financial crisis.

That's certainly the case among some bankers in North Carolina.

This week, I spoke to banking industry officials who told me an easing of regulations ranks high on their wishlist for the new, Republican-controlled Congress.

Among other things, the banking industry is hoping Republicans take aim at the Consumer Financial Protection Bureau, a federal agency created by Congress after the crisis to strengthen protections for consumers.

Thad Woodard, CEO of the North Carolina Bankers Association, said he would like to see more oversight of the bureau.

That's not all that surprising. After all, the banking industry has sought to limit power of the bureau, which has rule-making authority. (One of the bureau's new regulations, which requires mortgage lenders to ensure a borrower can repay the loan, took effect in January.)

Woodard said Democrats have allowed the bureau to function "unencumbered."

“Its lack of oversight and its budgetary process have been of great concern to banks," Woodard said.

Woodard said he is also concerned about "duplicative" post-crisis regulations, which he said are increasing compliance costs for banks and making them less profitable. Regulations, he said, are "sitting like a heavy weight on the banks and inhibiting their ability to do business."

That doesn't mean banks should not be regulated at all, he said.

“Never should the industry not be overseen for the safety of the public and the soundness of the institution," he said.

(You can read more of what Woodard told me here.)

To be sure, banks have seen an increase in regulations since the crisis, the worst economic downturn since the Great Depression. And more regulations are to come: Many of the rules mandated by the Dodd-Frank Act, passed in July in response to the crisis, still have not been written.

What do all those post-crisis regulations cost banks?

Jim Engel, CEO of Cornelius-based Aquesta Bank, told me his bank spends about $200,000 a year to comply with the additional regulations. To put that in perspective, the six-branch, community bank made $1.47 million in profit last year.

Engel said costs to comply with regulations limit the return banks can provide investors, which hurts banks' ability to raise capital and expand.

Any banker hoping for easing of Dodd-Frank regulations in the near future might be in for disappointment, according to Mark Vitner, senior economist for Wells Fargo Securities.

"Reforming Dodd-Frank would really use up a lot of political capital, and it’s just too complex to do” before the next presidential election, he said.

(For more on Vitner's thoughts on the new Congress, click here.)

Engel said regulations are just one issue banks are dealing with. The best thing Congress could do for community banks is pick up the pace of the economic recovery, he said.

Community banks in rural areas are especially struggling from low loan growth, he said. And when banks do make loans, they are at lower rates than in the past, which is hurting their net interest margins, he said.

“No. 1 on most community banks' wishlist is for a continuing improving economy," he said.

Former BofA chairman to chair Shell's board

Chad Holliday Jr. is going from helping Bank of America recover from the financial crisis to helping Royal Dutch Shell deal with slumping oil prices.

Holliday, who was Bank of America's chairman until CEO Brian Moynihan replaced him earlier this month, was named chairman of Shell on Thursday. Holliday is expected to take over the post next year, replacing Jorma Ollila, who is stepping down after nine years as chairman.

A spokesman for Charlotte-based Bank of America could not be immediately reached for comment Thursday on whether Holliday will continue to be a board member for the bank.

Holliday has served on the bank's board since 2009 and became director in 2010.

He is currently chairman of Shell's Corporate and Social Responsibility Committee and is a member of its Remuneration Committee, the Netherlands-based oil giant said.

Holliday, former CEO of chemical company DuPont, also serves on the board of Deere and Co., maker of John Deere equipment.

In handing Moynihan the chairman title, Bank of America's board rolled back a rare victory for shareholders who voted in 2009 to split the CEO and chairman roles in the fallout from the bank’s handling of its Merrill Lynch purchase.

After the vote, then-CEO Ken Lewis gave up the chairman role and later retired by year’s end.

Park Sterling reports lower third-quarter profit

The parent company of Park Sterling Bank reported lower profit in the third quarter compared with the same period last year, as expenses associated with its acquisition of a Rock Hill lender weighed on earnings.

Charlotte-based Park Sterling Corp. said Thursday it posted profit of $2.5 million, or 6 cents per share, in the quarter. That was down from profit of $4.2 million, or 10 cents per share, a year ago.

The regional lender blamed the declined primarily on a $2.1 million increase in expenses tied to merging with Provident Community Bancshares, which Park Sterling bought in May.

That acquisition also helped boost Park Sterling's third-quarter revenue to a record $23.9 million in the quarter. The company said the record revenue was also driven in part by "organic" loan growth of $78.5 million, which was also a record.

When banks refer to "organic" loan growth, they mean new loans that they originated. That's different from, say, loan growth from the acquisition of another lender.

On Thursday, Park Sterling said it has opened a second branch in the Richmond, Va., area. That branch opened this month, it said.

Park Sterling entered the Richmond market earlier this year when it opened a loan-production office that it later converted into a full-service branch.

Paragon reports lower third-quarter profit

The parent company of Paragon Bank on Tuesday reported lower third-quarter profit compared with the same quarter a year ago.

Raleigh-based Paragon Commercial Corp. said it had $1.5 million in profit, or 34 cents per share, down about 30 percent from $2.2 million a year ago.

The company blamed the lower profit primarily on a $480,000 reduction it made in the third quarter of last year to its reserves for loans that go bad. That reduction helped third-quarter 2013 income, Paragon said.

The bank did not add to its reserves in the recent third quarter. That comes as other banks have also been setting aside less money to cover soured loans as the number of problem loans on their books keeps falling.

Paragon said its net interest income rose by about $792,000 in the quarter from a year ago. Its total deposits increased by $126.2 million, or 17 percent. Its loans increased by $73.5 million, or 10 percent, to $820.9 million.

The company's total assets were $1.14 billion at the end of the third quarter, up from $1.04 billion at the end of last year.

“Management and the board are extremely excited about Paragon Bank’s earnings and overall balance sheet growth over the past 12 months,” Paragon President Bob Hatley said in a statement. “We are well positioned for further growth and profitability in 2015.”

Paragon has three offices, all in North Carolina. They are in Raleigh, Charlotte and, as of this month, Cary.

The company said the opening of the Cary office was a factor in its non-interest expenses rising to $5.7 million from $4.8 million in the second quarter of this year.

Paragon employs about 24 people in Charlotte. Earlier this year it open a new Charlotte office at 6337 Morrison Blvd. Prior to that it was in Piedmont Town Center.

Last year, Paragon "refreshed" its brand, rolling out a new logo and website as part of a strategy to draw more attention to its private-banking services. That move came after the bank changed its name last year from Paragon Commercial Bank in an effort to make potential customers think of it as more than just a lender to businesses.

Yadkin Financial posts lower third-quarter profit

Raleigh-based Yadkin Financial Corp. posted lower profit in the third quarter compared with the same period last year, as merger-related expenses weighed on the earnings of North Carolina's largest community bank.

Yadkin reported profit of $319,000 in the third quarter, or 1 cent per share, down from profit of $479,000, or 5 cents per share, in the same quarter last year.

Early in the quarter, Elkin-based Yadkin merged with Raleigh-based VantageSouth Bancshares, forming the state's biggest community bank. The merged bank holding company kept the Yadkin name and made Raleigh the headquarters.

The company said the merger helped boost its net interest income to $41.5 million, up from $19.9 million a year ago. The company also credited the merger with higher non-interest income, which rose to $9.1 million from $4.5 million.

But the merger also drove up expenses, particularly non-interest expense, which more than doubled to $48.2 million. That figure included $17.3 million in costs associated with the merger, including conversion expenses.

Yadkin Financial Corp. is the holding company for Yadkin Bank, which has 260 employees in the Charlotte metropolitan area. The bank's Small Business Administration lending operation is headquartered in Charlotte.

Yadkin Financial Corp. has $4.2 billion in assets.

Uwharrie Capital profit rises in third quarter

Albermarle-based Uwharrie Capital posted  higher profit in the third quarter compared with the same period a year ago, an improvement it attributed primarily to the recent consolidation of its three bank subsidiaries.

Uwharrie said its had third-quarter earnings of $250,000, an increase of 481 percent from last year. Earnings per share totaled 3 cents.

Last year, the company consolidated Cabarrus Bank and Trust, Bank of Stanly and Anson Bank and Trust under one name, Uwharrie Bank. CEO Roger Dick told the Observer last year that the move should save upwards of $1 million a year in infrastructure and compliance costs.

Operating efficiencies from the consolidation were the main contributor to the higher earnings in the recent third quarter, the company said. A decline in problem assets and strong performance in its wealth management division were other contributors, it said.

According to the latest federal data, Uwharrie Bank has two branches in the Charlotte metropolitan area. Those branches have a combined total of $112.7 million in deposits.

BofA holds reception in Charlotte for longtime employees

Bank of America CEO Brian Moynihan recognized employees who have worked for the company for at least 50 years during a reception last week at its Charlotte headquarters.

Of course, the Bank of America name has only been around for 16 years and was created when Charlotte’s NationsBank bought San Francisco-based BankAmerica in 1998.

That means the employees who were honored last week have also worked for a Bank of America predecessor company.

It's the second year in a row that Moynihan, who became CEO in 2010, has held an event in Charlotte to honor employees who have been with the company for at least 50 years.

"This recognition is part of our ongoing efforts to recognize employees for their dedication and time with the company," spokeswoman Ferris Morrison said.

Eleven employees, none of whom work in the Charlotte metropolitan area, were honored at the event last week, Morrison said. The employees work across the bank's U.S. footprint, she said.

The event was held in Bank of America Corporate Center’s Founders Hall.

Griggs Capital Management merges with Raleigh firm

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

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

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

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

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

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

BB&T reports higher third-quarter profit

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

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

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

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

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

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

Local bankers raise $350,000 for nonprofits

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

Kelligrew (Stephanie Chesson Photography)

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

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

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

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

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

Senator questions BofA contract

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

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

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

Bank of America spokesman Bill Halldin declined to comment.

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

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

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

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

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

Wells Fargo opens tech-lending office in Raleigh

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

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

Godwin

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

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

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

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

Fed questions BofA on move to lower hedge fund taxes

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

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

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

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

A Bank of America spokesman declined to comment.

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

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

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

Yadkin Bank to pilot smaller branch

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

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

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

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

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

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

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

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

Yadkin bank is part of Yadkin Financial Corp.

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

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

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

Wells Fargo names market president for Gaston, Cleveland counties

Wells Fargo said it has a new market president for Gaston and Cleveland counties.

Bill Ingram, who joined Wells Fargo in 2012 as a relationship manager for the Lake Norman area, will also serve as business-banking manager for the two counties.

Ingram

Market presidents serve as the face of Wells Fargo in the areas they oversee. They also make final decisions on how the bank spends money on philanthropic efforts in their markets.

Ingram replaces Janet Sarn, who retired.

Wells Fargo employs approximately 22,100 people in various business lines throughout the Charlotte metropolitan area.

Hugh McColl: Financial crisis caused by greed

Former Bank of America CEO Hugh McColl shared his thoughts on the origins of the financial crisis during a panel discussion Tuesday night, saying it largely stemmed from too much greed.

McColl also said the nation's biggest banks continue to grow as smaller banks are going away. And he warned that there might be trouble ahead for the U.S. economy as a result of too much money being put into circulation.

McColl was among the participants in the discussion organized by the Federal Reserve Bank of Richmond, which is celebrating its 100th birthday this year.

Panelists (left to right): Gantt, McColl, Martin and Rothacker 

Former Charlotte Mayor Harvey Gantt; Matthew Martin, the Richmond Fed's regional executive in Charlotte; and Charlotte Observer reporter Rick Rothacker were the other participants at the event held at the the Levine Museum of the New South.

The focus of the panel talk was the history of banking in Charlotte.

McColl said big banks are getting bigger, despite concerns from regulators and others about financial institutions deemed "too big to fail."

"The facts are that since the Great Recession, the too-big-to-fail banks have gotten much, much larger, and the little banks are disappearing," McColl said.

McColl retired as Bank of America CEO in 2001, before the financial crisis. The "No. 1 underlying cause" of the crisis, he said, was greed.

"You could argue that people borrowed money (for residential mortgages) knowing they wouldn't pay it back. You could argue people made the loan available to them knowing they couldn't pay it back," he said.

McColl said one "great fallacy" that helped spark the crisis was "people believed they could get rid of risk by selling it to somebody else."

"If (there's) nothing else people should have learned out of this collapse is the risk is always there and just because you gave it to somebody else doesn't mean it isn't coming back," he said.

McColl said too much money being put into circulation as a result of fiscal and monetary policy could prove problematic for the U.S. economy, perhaps in the form of future inflation.

"Once it gets into circulation, something's going to happen to it," he said. "It's going to get loaned or invested. We may be sitting on a time bomb of too much money being printed and all this will come home at some point."

"When you get too much money chasing too few good deals, that's when you get problems," he said.

Charlotte has had a Federal Reserve branch since 1927.

McColl called the opening of the branch "the most important" milestone in Charlotte's development into a banking center.

But he also said the region's banking industry expanded along with the economic growth that took place across the South following school desegregation in the 1960s.

"You take '63 forward, the South outgrew the rest of the nation" in terms of incomes, jobs and population, McColl said. "We were growing like gangbusters. ... We just happened to be in the right place at the right time and took advantage of it."

First Citizens merger wins shareholder OK

Shareholders on Tuesday approved the merger of Raleigh-based First Citizens BancShares and Columbia, S.C.-based First Citizens Bancorp.

The deal is expected to create the largest family-controlled bank in the U.S. and the sixth-largest bank headquartered in the Southeast.

Plans for the merger were announced in June. Under the deal's terms, the Columbia lender will be merged into the Raleigh lender.

The combined lender is expected to have $30.7 billion in assets, $26.1 billion in deposits and more than 575 branches in 18 states and the District of Columbia.

Regulators have approved the deal, a First Citizens Bancorp. spokeswoman said. The merger is expected to be completed in the fourth quarter.

Certus Bank looks to sell mortgage, wealth divisions

CertusBank said Monday it has entered into agreements to sell its mortgage and wealth divisions as the troubled bank winds down a restructuring strategy.

The Greenville, S.C.-based bank said AmeriSave Mortgage Corp. has submitted a letter of intent to acquire a large portion of Certus’ mortgage business. Separately, Eximius Holdings has submitted a letter of intent to acquire Certus Securities and Certus Investment Advisors.

The deals are not yet finalized.

Monday’s announcement comes as Certus has been seeking to exit certain business lines under a restructuring plan while at the same time battling a high-profile lawsuit brought by former top executives fired earlier this year.

The restructuring, led by new CEO John Poelker, is designed to return Certus to a more traditional community-banking model. The bank, whose headquarters were once in Charlotte, said Monday the sale of the two divisions brings the restructuring effort to a close.

Poelker was named interim CEO and president in April after the executives were fired over mounting losses at the bank and shareholder questions about expenses.

The executives – Milton Jones, Walter Davis and Angela Webb, former Bank of America and Wachovia executives who had led CertusBank since its formation – sued the bank and a hedge fund manager, alleging the hedge fund manager persuaded a majority of the bank’s board members to fire them.

The executives claim the hedge fund manager, Benjamin Weinger, sought to defame them with racial statements. Jones, Davis and Webb are black. Certus has maintained that the decision to fire the executives was based on a review of their performance at the bank and had nothing to do with race. In court filings, Weinger has denied making racial comments about the executives.

The lawsuit is pending in federal court in Greenville.

Poelker was named permanent CEO last month. In a statement Monday, he said the sale of the two divisions will better position Certus “for ongoing improvement in our financial performance.”

The acquisition by Atlanta-based AmeriSave is expected to include a majority of Certus’ mortgage employees and facilities, Certus said. New York-based Eximius Holdings is seeking to acquire Certus’ brokerage and investment advisory platform, in a deal expected to include many employees who work in those operations.

The impact of the deals on those employees is not immediately known, Certus said. In the Charlotte metropolitan area, Certus’ mortgage and wealth operations employ approximately 40 people, according to the bank.

The announcement of the deals comes after Certus reported its losses in the second quarter more than doubled from the same period a year ago. The lender posted a loss of $15 million in the quarter, up from a loss of $7.1 million a year earlier.

Certus said the higher losses stemmed from expenses related to its restructuring.

CommunityOne announces departure of CEO Brian Simpson

Charlotte-based CommunityOne Bancorp said Friday that CEO Brian Simpson is leaving the bank holding company he helped return to profitability.

Simpson, 51, has led the lender for three years. CommunityOne President Bob Reid, 58, is expected to take over as CEO.

Simpson became CEO when the holding company still went by the name FNB United Corp. and was headquartered in Asheboro.

FNB United changed its name to CommunityOne Bancorp last year after it completed the merger of its two banks, Granite Falls-based Bank of Granite and Asheboro-based CommunityOne Bank, as part of an effort to help it return to profitability.

CommunityOne Bancorp was the last lender based in the Charlotte area still part of the federal bailout of the financial system. U.S. taxpayers pumped $51.5 million into then-FNB United in the wake of the financial crisis.

The recent second quarter marked the fourth profitable quarter in a row for the lender, which has struggled to become profitable since the crisis.

Simpson's last day as CEO will be Sept. 30.

Gastonia becomes 100th location for BofA's new ATMs

A Bank of America branch in Gastonia will have the distinction of being the 100th site equipped with the Charlotte bank's new automated teller machines that allow customers to interact with a teller via a video screen.

The bank unveiled the new "Teller Assist" ATMs in April of last year. The machines work like typical ATMs but with added functions. For example, by pushing a button, customers can receive real-time assistance from tellers stationed in call centers in Delaware and Florida. 

Bank of America is installed the ATMs only in the U.S. at this time. So far, the machines are in 12 markets nationwide. 

On Wednesday, the Gastonia Main branch, at 355 S. New Hope Road, will become the 100th site to have the Teller Assist ATMs, spokeswoman Tara Burke said. Three of the machines will be installed there. 

For the Charlotte metro area, that will bring the number of sites with the Teller Assist ATMs to 10 and the number of the machines to 22. Burke said the bank plans to add at least seven more of the ATMs to the region by the end of the year.

Bank of America plans to reach another milestone at some point this weekend, when it is expecting the number of Teller Assist transactions to hit 1 million.

Chanticleer Holdings buys The Burger Co.

Charlotte-based Chanticleer Holdings said it has bought The Burger Co., a restaurant whose only location is in uptown, in a $550,000 deal.

The purchase, made of $250,000 in cash and the rest in Chanticleer stock, was finalized Wednesday, one day after the companies entered into a purchase agreement.

The Burger Co. is at 1500 W. Morehead St., just west of the Interstate 277 loop. Its owner is David Smith. According to the restaurant's website, it was established in 2009 and grinds its own beef in-house daily.

It's the latest restaurant to be bought by Chanticleer, an investment company that has made multiple acquisitions of other restaurants in the past year as it seeks to achieve profitability.

Chanticleer, whose business model was once based entirely on owning and operating Hooters outside the U.S., changed that focus last year as it began buying other restaurant brands. Chanticleer has said it plans to expand some of those brands into foreign markets.

The Burger Co. is not the first burger restaurant to be bought by Chanticleer. In October, it finalized its purchase of Charlotte-based American Roadside Burgers.

Chanticleer said Wednesday that it has domestic and international franchise plans for The Burger Co.

“This acquisition is an integral step in our strategic growth plan as we prepare to take the better-burger category into our international markets," Chanticleer CEO Mike Pruitt said in a statement.

BB&T to acquire Bank of Kentucky for $363M

BB&T Corp. said Monday it has signed an agreement to acquire The Bank of Kentucky for about $363 million in stock and cash.

Winston-Salem-based BB&T will enter the northern Kentucky and Cincinnati markets through the deal. BB&T already has branches in Kentucky but not in Ohio.

In announcing the deal, BB&T said it will create a new banking region that encompasses northern Kentucky and Cincinnati. The region becomes the 24th for the regional lender.

The deal, which is expected to close in the first half of next year, still needs approval from regulators and Bank of Kentucky shareholders.

Park Sterling launches 1st major branding campaign

Park Sterling Corp. is launching what it calls its first major branding campaign since the Charlotte-based lender was founded in 2006.

The holding company for Park Sterling Bank announced the campaign, "Answers You Can Bank On," on Monday.

The campaign comes as the largest community bank headquartered in Charlotte continues to expand by acquiring other banks and opening in new markets.

Four months ago, Park Sterling bought Rock Hill-based Provident Community Bancshares. Also this year, Park Sterling entered the Richmond, Va., market when it opened a loan-production office that it has converted into a full-service branch.

As it grows into a larger lender, Park Sterling is seeking to portray itself as still being able to provide the personalized service that smaller banks are known for.

On Monday, the lender said its branding campaign aims to build awareness for its "ongoing mission to provide customers with the kind of answers that can only be found when large bank resources are effectively combined with the high-touch, flexible and personalized service of a community bank."

The campaign, which includes radio and newspaper ads, is being debuted in the Charlotte metropolitan area and Greenville, S.C., markets.

BB&T buying more Texas branches from Citigroup

BB&T Corp. is again adding branches to its Texas footprint, announcing on Wednesday a deal to buy 41 branches in the state from Citibank.

The Winston-Salem lender said it has signed an agreement to acquire the branches in the Dallas, Houston, Midland and Odessa markets. Through the deal, BB&T will also acquire $2.3 billion in deposits and $87 million in loans.

Wednesday's announcement comes just three months after BB&T purchased nearly two dozen Texas branches from Citibank, the largest banking subsidiary of New York-based Citigroup.

It's the latest push by BB&T, the third-largest lender by deposits in the Charlotte region, to grow its presence in Texas, which it entered through its 2009 takeover of Colonial Bank after the Alabama bank failed.

Wednesday's deal boosts BB&T's branches in Texas to 123 and its deposits in the state to $5.3 billion. In a separate deal completed in June, BB&T acquired 21 Citibank branches in Texas.

Citigroup said Wednesday that its footprint of branches in Texas didn't provide the scale to capture future growth and market share in traditional retail banking.

"We see the retail banking industry rapidly evolving beyond a purely branch-based model, and so we will dedicate our resources and investments on a more focused branch footprint in our major urban markets and on expanding our digital channels nationally," spokesman Andrew Brent said in a statement.

Brent said Texas remains "a vibrant growth state" for Citi and is home to the lender's second-largest concentration of employees in the U.S.

He said the sale announced on Wednesday is expected to close in the first quarter of 2015.

In addition to traditional banking, BB&T has other operations in Texas, including services offered by its insurance brokerage and other subsidiaries. The latest Citibank deal brings BB&T's total employees in Texas to about 2,050.

During a presentation to investors in September, BB&T CEO Kelly King called Texas a “big, whopping opportunity for us.”

Plexus Capital names new managing partner

Plexus Capital said Tuesday that Michael Painter has been named the managing partner for the Charlotte investment company.

He replaces Bob Anders, who had served as managing partner since the firm was launched in 2005. Anders will remain a full-time partner and member of the privately held firm's investment committee.

Painter

Painter is one of five founding partners. The firm said his promotion was part of a transition strategy that was long-planned.

Under Anders’ leadership, Plexus invested $365 million, partnered with 61 small businesses and raised more than $550 million, the firm said.

Plexus has offices in Charlotte and Raleigh. It specializes in providing capital to middle-market businesses looking to grow.

The firm has $550 million currently under management.

Report: BofA, Wells score higher for credit-card satisfaction

Bank of America and Wells Fargo have improved their satisfaction scores among credit-card customers, but the two lenders again scored below the industry average, according to a J.D. Power and Associates study released Thursday.

Charlotte-based Bank of America earned a score of 766 in this year's study, up from its score of 749 last year. San Francisco-based Wells Fargo earned 773 points, up from 757 last year.

American Express and Discover tied for first place with scores of 819.

Miller

Despite scoring higher compared with last year, Bank of America and Wells Fargo scored below the 778 average for the industry. In last year's study, the two lenders also earned scores below the industry average.

The study, which is in its eighth year, scored 10 credit-card issuers on six factors: interaction; card terms; billing and payment; rewards; benefits and services; and problem resolution. The study is based on a 1,000-point scale.

At 778, the industry's average score is at the highest it's ever been in the history of the study. In an interview Thursday, Jim Miller, senior director of banking services at J.D. Power, told me customer satisfaction with credit cards has been rising since the recession.

"Part of it is the economy is improving and customers are feeling better about their personal financial situation, and people feel better about their credit cards when they can pay it off and stay current on their payments," he said.

The rise in satisfaction comes as credit-card issuers are fiercely competing with one another, he said. He said the increase in competition comes as credit-card holders are charging less to their cards than before the recession.

The rising competition also comes as credit-card issuers seek to issue cards to "credit-worthy" borrowers, he said. He said that's a change from before the recession, when issuers were more open to giving cards to subprime borrowers, too.

"There’s not a big pool of credit-worthy consumers that don’t have a credit card" today, he said. "So in order to grow your business, at least from the number of cards that you have, you’ve got to take it away from someone else."

Lenders are seeking to grow their credit card business at a time when some other revenue sources, such as their mortgage businesses, have declined, Miller said. For example, lenders' refinancing business has fallen since mortgage rates began rising last year.

Miller pointed out that credit cards are a fairly steady revenue source for lenders.

"They are putting a lot of focus on their credit-card operations and trying to grow that business," he said.

For consumers, all this competition has benefits, Miller said. For example, issuers are using reward programs to make their credit cards more attractive, he said.

But, he said, issuers still face challenges, even when they have rewards that customers like.

“You might have a great rewards program today -- and somebody comes out with one tomorrow that surpasses that," he said.

BB&T names new president

Winston-Salem BB&T Corp. said Wednesday its former head of community banking for the Charlotte region has been named president of the holding company's banking subsidiary.

Ricky Brown's appointment to president of Branch Banking and Trust Co. is effective immediately, the company said.

He replaces Rob Greene, who retired this year after serving as president since BB&T's 1995 merger with Winston-Salem's Southern National Corp.

Brown joined BB&T in 1977. He has held various positions within the company, including regional president for the Charlotte metropolitan area.

Since 2004, Brown has served as president of community banking for BB&T Corp., a position he will continue to hold, the company said.

Brown reports to BB&T Corp. CEO Kelly King.

"I am pleased the board is recognizing Ricky's superior leadership and 37 years of outstanding performance with this well-deserved promotion," King said in a statement.

Carolina Premier Bank CEO resigns

John Kreighbaum, CEO of Ballantyne-based Carolina Premier Bank, said Tuesday he is stepping down as head of the lender he helped launch in 2007.

Kreighbaum, 67, said the move is effective immediately. In an interview Tuesday with the Observer, he said the decision was voluntary.

“When I started forming the bank, I had anticipated that it would take a couple of years to get it open, which it did, and then I had planned to spend about seven years, no more than seven years," at its helm, he said.

"I made this decision," he said.

Chuck Davis, the bank's chairman, said Tuesday the resignation surprised the board.

"We just found out today, Davis said. "I think he just wants to go do something else."

Caryn Johnson, chief operating officer, has been named interim chief executive, Davis said.

Kreighbaum declined to discuss what his next move might be, other than he plans to remain in the banking industry.

Carolina Premier Bank reported $252,000 in profit in the first quarter, up from $202,000 in the same quarter last year.

"The bank's doing phenomenal and in great shape, Davis said.

Wells Fargo unveils new disaster vehicle

Wells Fargo is getting ready for the next natural disaster, unveiling a heavy-duty vehicle designed to provide mortgage assistance to people in need.

So far, the lender has only one so-called Mobile Response Unit, which was unveiled Tuesday in Fort Mill and will be stored in the nearby Winston-Salem area.

Why unveil it in Fort Mill?

That's where Wells Fargo has a large mortgage-servicing operation. Since the vehicle is supposed to provide mortgage aid, the company chose Fort Mill to show it off. The bank has about 2,500 employees in its Fort Mill mortgage operation, by the way.

The 75-foot vehicle allows the bank to go to areas affected by a disaster within "just a few days," the San Francisco-based bank says. The bank said the vehicle can respond to disasters nationwide.

You might recall that, in the University City area in December, Wells Fargo showed off new trucks that also can be driven into disaster areas. The bank tells me that those trucks were mobile automated teller machines designed to let customers access cash in the wake of a disaster.

The new vehicle, meanwhile, does not have an ATM. It is designed to provide specific help to Wells Fargo's mortgage customers. For example, Wells Fargo says the vehicle will enable it to process insurance-claim checks in disaster areas. When it's not deployed in a disaster, the vehicle can be used to provide financial literacy in communities, the bank said.

Among other things, it has private offices, a kitchen and a bathroom.

Wells Fargo said SPEVCO, which is based in Pfafftown, N.C., helped construct the vehicle.

Below are photos that Wells Fargo provided us of the vehicle.

BofA may relocate HQ in 5 years, analyst speculates

Bank of America may move its headquarters to the Boston region in the next five years, speculates an analyst who covers the bank.

Dick Bove, an analyst at Rafferty Capital Markets, said the bank’s promotion of New York-based Thomas Montag to sole chief operating is the latest evidence that a power shift is happening away from executives based in Charlotte, The Wall Street Journal reports.

A Bank of America spokesman declined to comment and CEO Brian Moynihan has said in the past that he doesn't plan to move the bank's headquarters.

This week, Moynihan announced that Charlotte-based co-chief operating officer David Darnell is becoming vice chairman and relocating to Tampa, Fla., under a new organizational structure.

Darnell, who worked for Bank of America predecessors NCNB and NationsBank, is one of the bank’s most senior Charlotte-based executives. He will continue to report to Moynihan and lead global wealth and investment management and business banking.

Montag joined the bank in its 2009 Merrill Lynch acquisition.

Bove said the bank’s top executives are now coming from FleetBoston Financial, which Bank of America acquired in 2004.

Moynihan, who came from Boston-based Fleet, still maintains a home there.

“First in past periods, Bank of America’s leadership team was solidly based in Charlotte," Bove said. "No matter how many acquisitions the company made nor how many changes in its name, this bank was run by a solid core of North Carolina National Bank executives – the so-called North Carolina mafia."

On Thursday, Bank of America said it will pay $16.65 billion in a settlement with the U.S. government and various states over soured mortgage bonds.

SunTrust explains need for more space in new HQs

Yesterday, I reported on SunTrust Bank's decision to increase the number of floors it plans to lease at its new regional headquarters in SouthPark.

For those who didn't see the story, SunTrust has announced it will lease space on four floors (original plans called for three) in the building, which is part of the mixed-use Sharon Square project. SunTrust plans to move into the space this fall, exact date not yet announced.

The bank couldn't make Bill Peele,  president of the bank's Mecklenburg/South Carolina region, available for comment yesterday, but I caught up with him this morning to find out why the bank needs more space in the building.

Peele

Basically, Peele said, the extra space is needed for all the additional bankers SunTrust has been adding in the Charlotte region.

Among other things, he pointed to the recent relocation of SunTrust's Mid-Atlantic corporate banking operation from Richmond, Va., to Charlotte.

SunTrust has also been adding personnel in Charlotte for its wholesale banking and private wealth management operations, he said.

All of that has created the need for SunTrust to take on more square footage in the Sharon Square building than it originally planned, he said.

"We were running out of space in really all of buildings," he said.

(It's worth noting that it's unclear whether SunTrust's overall employment in the Charlotte region has been rising or falling, as the bank does not provide employment figures by market. The company as a whole had 26,281 full-time equivalent employees as of the end of last year, down by 497 compared with the end of 2012.)

As you might recall, SunTrust plans to vacate some of the buildings it occupies in Charlotte as it consolidates those operations into the new headquarters. The bank is completely pulling out of space it has been leasing in two places and relocating those operations to Sharon Square: 6836 Morrison Blvd., where Peele and other functions have been based, and Piedmont Town Center, where it has a capital markets trading operation.

The bank is also relocating some personnel -- in commercial banking, as well as other areas -- from a building it owns at 101 S. Kings Drive to the new headquarters, Peele said. Some personnel and the branch will remain at the Kings Drive site and the bank will continue to own the building, he said.

All told, SunTrust will occupy the entire second, third and fourth floors of the five-story Sharon Square building and part of the first floor, where a branch is already in operation.

Atlanta-based SunTrust is the fifth-largest bank by market share in the Charlotte region.

While part of the move to Sharon Square is designed to boost visibility for the regional lender as it seeks to grow market share, Peele said the move is motivated by more than that. By housing certain functions under the same roof, such as commercial banking and wealth management, it helps the bank better serve those clients and meet more of their needs, he said.

“This whole thing was not about expense saving, but really about synergy," he said.