Tuesday, April 30, 2013

McCrory, Wells execs, golfers mingle at First Tee event

Gov. Pat McCrory, pro golfers and Wells Fargo executives mingled Tuesday afternoon at the bank's annual literacy program it conducts with Charlotte's The First Tee organization. It marked one of the main events of the second day of the Wells Fargo Championship week.

Wells Fargo gave $100,000 to the youth program, which teaches life skills through golf.

McCrory told the Observer he would also play in Wednesday's pro-am tournament out at Quail Hollow. He lauded The First Tee organization in a brief chat on his way out.

Behind him, PGA pros Rickie Fowler and J.J. Henry demonstrated a few putting and chipping tips in a brief sunny break of the Tuesday clouds.

Wells Fargo's chief marketing officer Jamie Moldafsky was also on hand. She said the bank would unveil a new commercial on Thursday in its "Conversations" campaign. More details to come on that later this week.

Wells Fargo: More than half of N.C. residents fret over retirement savings

More than half of North Carolina residents surveyed by Wells Fargo worry that they will not be able to save enough to retire, and only half think they will be able to sustain their current lifestyle in retirement.

The San Francisco-based bank released the survey results Tuesday.

The study also says that 58 percent of North Carolina households are more focused on reducing debt instead of preparing to retire.

But the study also found that 52 percent of residents feel comfortable financially, while 45 percent think their financial situation has improved over the past three years.

Many North Carolina residents are cutting back on their spending and concerned about their debt, the study shows. A total of 46 percent of residents have reduced what they spend just to make ends meet, while 39 percent are living from paycheck to paycheck. Two in five residents, especially those under the age of 50, have more debt than they are comfortable with.

In other study findings:

  • Each month, 39 percent of residents have at least $1,000 in unpaid credit card debt.
  • Only 41 percent have cut back on their spending in order to save for retirement.
  • Only 42 percent are optimistic about the "political direction" of the country.
Wells Fargo said the study is based on online responses, from Nov. 9 to Dec. 3, of 1,105 U.S. residents and 500 North Carolina residents. The maximum margin of error for the national results is 2.9 percent, while the margin of error for the North Carolina results is 4.4 percent.

Monday, April 29, 2013

Carousel Capital names new CFO

Charlotte-based private equity firm Carousel Capital said Monday that Robert L. Kreidler Jr. has joined the firm as chief financial officer.

Kriedler most recently served in the same role at Charlotte M&A advisory firm Fidus Partners. He's had a long career in the Charlotte capital markets business, also working with Edgeview Partners, Cambium Capital Management, Bowles Hollowell Conner & Co. and Wachovia Capital Markets.

“With the increasing complexity of our fund administration and regulatory reporting requirements, he will be a terrific asset to our organization," Carousel managing partner Bill Hobbs said in a statement.

Carousel announced the closing of its fourth fund, of $265.5 million, earlier this year. It's dedicated to buying Southeastern companies that focus on business services, consumer products and services and healthcare. In January, the firm said about 20 percent of it had been allocated in two investments.

BNC Bancorp increases earnings, sheds assets

High Point-based BNC Bancorp said Monday it more than tripled its net income in the first quarter over the year before, earning $3.8 million for shareholders.

The parent of Bank of North Carolina, which opened a regional headquarters in Charlotte last year, also spent $1 million on integration costs as it continues to work through the acquisition spree it's been on of late.

In December 2011, it announced it would buy Durham-based KeySource Financial. Six months later, BNC said it would buy Charlotte commercial bank First Trust. Three days later, it assumed the deposits and bought most of the assets of Charleston's failed Carolina Federal Savings Bank.

As Bank of North Carolina digests those acquisitions, it's also strategically shedding some of its assets.

The bank reported Monday its assets decreased 5 percent in the first quarter as it used cash and securities from the acquired banks to pay off their brokered deposits and others it didn't feel were core to its business.

BNC now has $2.93 billion in assets. The bank said the moves have improved its capital position and net interest margin.

The bank said Friday that it took out a $30 million loan to redeem the preferred stock related to its involvement in the Troubled Asset Relief Program. The securities were sold to a private investor last year in a public auction conducted by the U.S. Treasury.

Friday, April 26, 2013

CertusBank buying another failed bank

CertusBank is doing another failed bank transaction, this time scooping up Lenoir, N.C.-based Parkway Bank and its three branches, the FDIC said Friday.

CertusBank is based in Greenville, S.C. and run by former Bank of America and Wachovia executives. It has corporate offices in SouthPark.

Parkway's $103.7 million in deposits will be transferred to the bank. CertusBank also bought $99.2 million of its assets, or about 95 percent of the total.

CertusBank bought a failed Georgia bank in November. It bought three other failed banks in South Carolina and Georgia before that.

Read more here: http://obsbankwatch.blogspot.com/2012/11/certusbank-buying-failed-georgia-bank.html#storylink=cpy

McColl, Moynihan attend Arts & Science Council event

Bank of America CEO Brian Moynihan was in town this week, hobnobbing with other movers and shakers at a private Arts & Science Council event Tuesday night.

Held at North Carolina Dance Theater, the invitation-only dinner was also attended by former Bank of America CEO Hugh McColl and his wife, Jane, who were the hosts.

According to the council, which provided details on the event to the Observer at the newspaper’s request, the dinner was for donors and supporters of the Charlotte-based organization.

Among the other attendees: Leon and Sandra Levine, of Family Dollar fame; Tim Belk, CEO of department store Belk; businessman “Dick” Spangler and his wife, Meredith; and Mayor Anthony Foxx and his wife, Samara.

Charles Bowman, Bank of America’s market president for North Carolina and Charlotte, was also there.

Pat Cotham, who chairs the Mecklenburg County Board of Commissioners, in an interview with the Observer said violinists from the Charlotte Symphony Orchestra gave a performance, and the president of the dance theater spoke about the arts in Charlotte. McColl told the room that he wasn’t asking for money for the arts, but just wanted to thank those who supported them, Cotham said, adding that Moynihan and McColl sat together.

In an email to the Observer, she described the conversation she had with Moynihan. Below are excerpts from her email:

“I joked about my being a longtime Bank of America customer. He smiled and thanked me for being a customer. He seemed to know I was an elected official. He asked how things were going, and I told him I was asking a lot of questions, and he said that was what I needed to do.

“I told him I work for the people and I wanted them to know we were working toward improving efficiency. He asked me how much was the budget for the county. I told him around $1.4B, and he smiled, and I said I knew he was used to much bigger numbers but the budget was taxpayers' dollars so that was very important, and he agreed, saying something like 'You have to watch out for the taxpayers.'

“He wished me luck, and that was about it. He was very nice. He seemed to be hanging with Hugh. Good choice.”

BNC Bancorp swapping preferred stock for debt

The parent company of Bank of North Carolina said Friday that it'll swap out the preferred stock left over from the auction of its federal bailout investment for debt.

In August, the U.S. Treasury sold off the preferred stock it held in BNC Bancorp at a public auction, moving the $31.3 million investment for $28.4 million. The government reported making a profit on the bank overall when dividend payments were included.

BNC said Friday it will redeem the preferred stock from its new owner at its full price, using cash on hand and a $30 million loan from Georgia-based Synovus Bank.

BNC's Chief Operating Officer Richard D. Callicutt said in a statement that regulators' approval of this transaction is a testament to the bank's financial strength.

Thursday, April 25, 2013

Andy Warhol, Dolly Parton appear in Bank of America lawsuit

It's not often that the names Andy Warhol, Dolly Parton and Bank of America are mentioned in the same breath.

But a lawsuit filed in federal court in Atlanta names all three.

The lawsuit by Bank of America claims an Atlanta developer and an art collector defaulted on $4.5 million lent by the bank. The developer is Barry Real Estate Cos., which, according to its website, was given a Georgia Developer of the Year award in 2005.

According to the lawsuit, the collateral for the loan was artwork owned by Christian Schoen, who is also named as a defendant. Schoen has paid down approximately $1.7 million of the loan using a portion of $2.6 million in proceeds from the sale of six paintings, the lawsuit says.

But the bank claims Schoen won't give the bank $550,000 he made from a 2012 sale of a Warhol painting of Parton. The bank also says Schoen won't turn over to it four other paintings that auction house Christie's has appraised, collectively, at $3.1 million.

Court order shuts down Charlotte debt settlement firm

A court order has temporarily shut down a Charlotte debt collection firm that state attorney general Roy Cooper claims illegally charged large upfront fees while promising debt relief it often fails to deliver.

Advantage Debt Solutions Inc., which operated out of an office on South Tryon Street near I-485, allegedly collected $140,000 from North Carolinians and more than $1 million from people around the country.

Cooper filed suit last week against the company and its principal, Anthony Krysinski. In the lawsuit, Cooper alleged that the company solicited business through "aggressive telemarketing calls" claiming it could help settle credit card debt and enable people become debt free in two to three years. Advantage would collect fees usually totaling 15 percent of the person's outstanding debt.

Under North Carolina law, it is illegal to collect fees up-front for debt settling services.

The injunction was granted Wednesday morning.

Advantage Debt Solutions' phone number had been disconnected when the Observer tried to contact the firm Thursday.

American Community Bank getting new name: Yadkin Bank

American Community Bank in Charlotte and its four sister banks will all take on a new name next month: Yadkin Bank.

Their parent company, Yadkin Valley Financial Corp., announced the re-branding as part of its first quarter earnings results Thursday morning. The company earned $4.2 million in the quarter, up 55 percent from the same time period last year.

The bank took a $25.3 million loss in the fourth quarter as it wrote off millions in bad loans. It auctioned off about 170 properties in North and South Carolina earlier this year as a part of that. That process is now done, Yadkin said Thursday, and it booked a $1.1 million gain on sale.

"We believe that we are getting back to the basics of banking and providing superior financial solutions and
service to our customers throughout the Carolinas," CEO Joe Towell said in a statement

The company's banks had already been run under one operating system and one charter, as divisions of Yadkin Valley Bank.

"We believe that now is the time to harness the synergy of our organization by bringing the values of our company together under one strong brand," Towell said in the statement. The parent company's name will also change to Yadkin Financial Corporation.

The move is similar to the one afoot at Uwharrie Capital Corp., which runs community banks in Cabarrus, Anson and Stanly counties. Each had had a name referring to its geography (i.e. Cabarrus Bank and Trust). Uwharrie is now working with marketing agencies to come up with one brand name for them all. One difference: Those banks had been operated independently, and will have to be combined.

Park Sterling 1Q profit gets boost from Citizens South acquisition

Park Sterling Corp.'s profit rose to a record level in the first quarter, an increase the company said was driven in large part by its acquisition last year of Citizens South Banking Corp.

On Thursday, the Charlotte-based holding company for Park Sterling Bank reported earnings of $3.2 million, or 7 cents a share, up 85 percent from $1.7 million, or 5 cents a share, from the same period a year ago.

Compared with the fourth quarter, in which earnings were $1.3 million, or 3 cents a share, profit in the recent first quarter was up 151 percent.

Park Sterling, the largest community bank in Charlotte, in October acquired Gastonia-based Citizens South and 21 Citizens South branches in North and South Carolina and Georgia. The acquisition helped Park Sterling's first-quarter mortgage banking income rise to a record $968,000, more than double the $461,000 in the same quarter a year ago.

But the company's noninterest expenses were up in the quarter from the same period the year before, rising from $11 million to $16 million as it recorded costs of $836,000 from the acquisition. Noninterest expenses include salaries, equipment and other overhead.

Park Sterling has 44 locations in the Carolinas and north Georgia.

Wednesday, April 24, 2013

U.S. senators: 'Mega banks' must up capital

Two U.S. senators released Wednesday the details of legislation that would force "mega banks," including Bank of America and Wells Fargo, to raise capital levels to 15 percent of their assets. Mid-sized and regional banks would be required to increase capital levels to 8 percent.

The bill, by Sherrod Brown, D-Ohio, and David Vitter, R-La., would end "too-big-to-fail policies," the lawmakers said. The legislation is dubbed the Terminating Bailouts for Taxpayer Fairness Act. Brown and Vitter are calling for banks to "fund themselves with equity investments, rather than debt."

Having enough capital lessens the likelihood that financial institutions will fail, the lawmakers said, adding that higher capital levels also lower the costs to the economy if one does collapse.

"Despite receiving assistance from taxpayers in 2008, today the nation’s four largest banks — JPMorgan Chase, Bank of America, Citigroup and Wells Fargo — are nearly $2 trillion larger today than they were before the crisis," Brown and Vitter said. "Their growth has been aided by an implicit guarantee — funded by taxpayers and awarded by virtue of their size — as the market knows that these institutions have been deemed 'too big to fail.'”

The 15 percent capital requirement would apply to banks with at least $500 billion in assets. Community banks would not face new capital standards, as they already have capital rates of about 10 percent, Brown and Vitter said.

The senators have been working on the bill for months. But it is expected to encounter obstacles, both from banks and some lawmakers. Just this month, Wells Fargo's CEO, John Stumpf, said during an earnings call that "we do not need additional legislation aimed at big banks."

The lawmakers unveiled the legislation at a press conference in the Senate.

Wells Fargo considers moving around shareholders meetings

As Wells Fargo considers breaking with tradition and holding more shareholders meetings outside of its home state of California, some might wonder: Will one ever be held in Charlotte?

On Tuesday, instead of its typical venue, the Merchants Exchange Building in San Francisco, Wells Fargo held its shareholders meeting at The Grand America Hotel in Salt Lake City.

Ancel Martinez, Wells Fargo spokesman, told the Observer Wednesday that the company is interested in holding shareholders meetings in cities where it has a big presence. In Utah, he said, the bank has roughly 4,000 employees and 122 branches.

"We've been doing business there since the 1850s," he said. "This year, Salt Lake City was just a convenient venue."

But in the Charlotte area, the company's presence is even larger; it employs roughly 20,700 people in the region, and North Carolina is home to about 300 Wells Fargo branches.

Martinez said roughly 150 people attended the Utah meeting. The company has not yet decided where next year's meeting will be held, he added.

"We will consider the cities where we have a significant presence of customers, team members and operations," he said.

Tuesday, April 23, 2013

Wells Fargo raises dividend

Wells Fargo's quarterly common stock dividend will rise by 5 cents, the company said Tuesday. But the new amount, 30 cents, remains below 34 cents, the level the dividend was at in the first quarter of 2009 before plummeting to 5 cents later that year.

On Tuesday, the San Francisco-based bank's board approved the higher dividend, the plans for which the bank received approval from the Federal Reserve in March. Also Tuesday, the bank held its annual shareholders meeting in Salt Lake City.

Wells Fargo's dividend stayed in the single digits until 2011, when it hit 12 cents. It dipped to 10 cents in 2012 but rose to 22 cents later that year and to 25 cents this year. It's still far above Bank of America's dividend of 1 cent per share.

JPMorgan Chase & Co.'s dividend, though, will soon surpass Wells Fargo's. JP plans to increase its dividend from 30 cents per share to 38 in the second quarter.

Wells Fargo's higher dividend is payable June 1 to stockholders of record on May 10. The company has roughly 5.3 billion outstanding shares.

During a first-quarter earnings call this month, some analysts said the bank's shareholders want to see a smaller number of outstanding shares. The bank has said that it plans to repurchase more shares this year than it did in 2012.

On the earnings call, Tim Sloan, the bank's chief financial officer, said the bank repurchased 120 million shares in 2012.

Former CEO Kovacevich slated to attend Wells Fargo Championship

Wells Fargo's top executives might not be in town for the bank's eponymous PGA tour event next week, but at least one of its biggest names of the recent past is scheduled to be there.

Former Wells CEO Dick Kovacevich, who left the top job in 2007, is again expected to attend next week's Wells Fargo Championship golf tournament at Quail Hollow Club, regional president Kendall Alley said Tuesday.

Kovacevich maintains a high stature in the financial world and has been fairly outspoken in retirement. He stepped down as chairman shortly after negotiating his bank's purchase of Charlotte-based Wachovia

He's also known as an avid golfer. A few years back, USA Today wrote that he had an 11 handicap and regularly played a pro-am tournament at Pebble Beach. In 2006, The New York Times linked four Wells directors to his favorite links.

He played with top golfer Rory McIlroy in the 2011 pro-am tournament in Charlotte.

Chief Marketing Officer Jamie Moldafsky is also slated to be at the tournament. David Carroll, head of wealth, brokerage and retirement and Charlotte's top Wells executive, will lead a local contingent including investment banking co-head Rob Engel and Alley.

CEO John Stumpf will not be there, Alley said. Nor will Chief Financial Officer Tim Sloan, who will be out of the country.

The golf tournament is a key business development event for Wells Fargo bankers. Each line of business has an allotment of tickets to hand out to important customers and clients.

For the public, Saturday tickets are already sold out and Sunday tickets are expected to be gone soon, Alley said. Sponsorships and hospitality sign-ups have also gone well, he said.

"All the tents are full and we’re looking forward to a great year," Alley said.

More troubles developing with mortgage relief cash payments

More problems are developing in the distribution of nearly $3.6 billion to troubled homeowners.

A week after a number of the first checks bounced, people in families that don't look the same as they did when their mortgage deeds were inked are having issues getting their checks cashed.

The payments, which began to be sent out in mid-April, bear the names of all people who signed the mortgage documents. Between then and now, many households have changed by divorce, death or other circumstances -- meaning some homeowners due money can't access it.

Regulators are aware of the problem. Rust Consulting, which is managing the payments, is now working on a policy on how homeowners can get the checks reissued with the correct names, a spokesman with the Office of the Comptroller of the Currency said.

The payments stem from a legal settlement with mortgage servicers accused of wrongdoing, reached with the OCC and the Federal Reserve. About 4 million borrowers who were in some stage of foreclosure in 2009 or 2010 are eligible. Data from the Federal Reserve shows that nearly 60 percent will receive $300.

The settlement itself was freighted with issues. Borrowers were initially to be eligible for an independent review of their foreclosure cases to determine whether they were harmed by their servicer and compensated accordingly. As costs escalated, a second settlement was reached to end the review.

Wells Fargo No. 1 for U.S. commercial foreclosures in 4Q

Wells Fargo led the nation in commercial property foreclosures in the fourth quarter of 2012, while Bank of America was No. 1 in the South, according to data released this week by Irvine, Calif.-based CoreLogic.

San Francisco-based Wells, which operates its East Coast headquarters in Charlotte, was the top U.S. foreclosure plaintiff, with foreclosure action taken on 661 properties. That was followed by JPMorgan Chase, with 432, and Bank of America, with 370.

In the South, though, Bank of America was in first place. The Charlotte-based bank took foreclosure action against 234 properties, followed by Wells Fargo at No. 2 with 215.

Nationwide, the number of distressed commercial properties is at the lowest it's been since January 2008, according to CoreLogic findings on 10 major U.S. markets, excluding Charlotte. In those markets, there were roughly 1,700 distressed properties in January, down from a peak of about 4,300 in March 2009.

Across the South in April, an estimated 3,002 commercial properties face maturing mortgages that will need to be refinanced or sold, more than any other U.S. region, the report said. In U.S. rankings of types of properties facing maturing mortgages in April, the Charlotte area is No. 3 in the industrial category, with  $44.4 million in loans coming due. The New York and northern New Jersey area, with $79.9 million in loans, was No. 1 in the industrial category.

To read the national report for April, click here. For the Southern report, click here.

Wells Fargo's annual meeting today in Salt Lake City

Wells Fargo is holding its annual meeting this morning, but the San Francisco bank's investors won't be gathering to vote on directors and executive pay on the bank's home turf.

Instead, the bank is driving its stagecoach about 700 miles east to Salt Lake City. It's certainly unusual: the bank hasn't met outside the Bay in 14 years, the Associated Press reports.

Surprisingly, they're not the only mega-bank meeting in Utah's capital. Goldman Sachs has also chosen Salt Lake City for its annual meeting despite hanging its hat in New York City.

Wells didn't tell the AP much about its motivations. The bank pointed out its roots and 4,000 employees in the state.

Last year's meeting in San Francisco got a little hairy. A few activist groups -- including Reinvestment Partners from Durham -- have pledged to be in Salt Lake City this year, but presumably there will be fewer people.

Bank of America's meeting will be in two weeks -- Wednesday, May 8 -- here in Charlotte. It's been in the Queen City since 1998, though it used to move around a little.

In 1997, the bank -- then known as NationsBank -- met in St. Louis, Missouri. The bank had swallowed the city's Boatmen's Bancshares a few months before in a deal making the Charlotte bank the fourth-largest in the country with $225 billion in assets.

In 1995, the bank met in Richmond, Va. In 1994, it was Atlanta.

Fifth Third bus to tour western N.C.

Western North Carolina, keep an eye out for the Fifth Third bus.

The Cincinnati bank will be taking a tour through Shelby, Hickory, Lincolnton and Asheville this week, doling out free hot dogs, money management advice and mortgage counseling.

Click here for a schedule of events.

Fifth Third has its North Carolina headquarters in uptown Charlotte. The bank entered the market through its acquisition of First Charter in 2008, and now has 56 branches in the state.

Monday, April 22, 2013

Bank of Granite facing lawsuit after fraudulent wire transfer

A couple weeks back, I wrote about a legal battle between Charlotte-based Park Sterling Bank and a local law firm over who should bear the loss after criminals sent more than $300,000 in a fraudulent wire transfer to Russia.

Well, court documents show that another local bank -- Bank of Granite -- is facing the exact same thing joining the ranks of small banks around the country now facing these kinds of suits.

First Security Co., a Hickory-based insurance company, has sued the bank claiming that its lax security procedures allowed cyber-criminals to make off with hundreds of thousands of dollars through a series of wire transfers.

A total of $726,483.38 was taken out of First Security's account through a series of three wire transfers in November, the suit states.

Despite the unusual activity -- more than $500,000 went to Raohe Hongdawantong Int Trade Co. despite First Security not doing any overseas business, Bank of Granite did not notify the company until it overdrew its accounts, the suit states. First Security didn't know about the wire transfers until getting an "insufficient fudns" notice in the mail a few days later, the company claims.

The case was recently moved to N.C. Business Court, which covers complex cases.

Bank of Granite has been owned by Asheboro-based FNB United since a 2011 deal that combined and recapitalized both banks. FNB is now working to merge its subsidiary -- CommunityOne Bank -- with Bank of Granite.

Bill calling for tougher capital requirements for banks to be unveiled

Two senators will unveil this week a bill that is expected to call for tougher capital requirements for banks in an attempt to prevent another financial institution’s failure from crippling the U.S. economy.

Sherrod Brown, D-Ohio, and David Vitter, R-La., both of whom in October issued a statement that called for tightening capital requirements, are scheduled to provide details on a bill that they've been working on for months.

According to a supposed draft of the bill on the website of the news outlet Quartz, banks’ capital would have to equal at least 10 percent of their assets. Federal law mandates at least 3 percent under so-called Tier 1 requirements.

Also, banks with at least $400 billion in assets would pay surcharges, according to the supposed draft. Charlotte-based Bank of America and San Francisco-based Wells Fargo fall into that category.

On Tuesday, Brown and Vitter will address “efforts to break up Wall Street megabanks” at the National Press Club in Washington, D.C., according to a press release from the senators. On Wednesday, the Brown-Vitter bill details, including the capital requirements, will be released at a press conference in the U.S. Senate.

The proposed capital requirements “would ensure financial institutions have adequate capital to protect against losses,” the senators’ press release said.

Despite the opinions of some, including Federal Reserve Chairman Ben Bernanke, that more can be done to rein in so-called too-big-to-fail banks, some think Brown and Vitter will have a tough time getting support for their bill.

Friday, April 19, 2013

BofA's Darnell talks about trade-offs of financial regulations

As regulators continue to develop new mortgage rules at the same time as policymakers want to broaden access to credit, Bank of America Co-Chief Operating Officer David Darnell said Friday that all sides need to recognize that one impacts the other.

"We all have to understand that there are trade-offs," he said. "As we evaluate the mortgage industry ... the impact on the accessibly, affordability, is just something we're going to have to mange through. It will have an impact."

Darnell spoke of the industry's response to the CARD Act in 2009, which limited banks' ability to increase credit card rates on existing balances. That meant, Darnell said, that banks had to factor in the portfolio's risk ahead of time, increasing up-front costs and restricting availability.

As the CFPB finishes its qualified mortgage rules, Darnell said they need to be broad enough to give banks room to operate and have a range of products. He said the banking industry also needs to have the chance to point out potential unintended consequences of new regulations.

"The objective is a good one," he said. "The process is something we need to be thoughtful about."

Darnell was speaking as part of a panel at the Federal Reserve's Charlotte office during its annual credit markets symposium that draws bankers and regulators from around the region. Darnell spoke alongside UConn law professor Patricia McCoy and Consumer Financial Protection Bureau associate director David Silberman.

The latter's inclusion on the panel led to a few interesting moments, particularly when Darnell was asked what advice he'd give regulators working with his bank. He said he wished all the different regulatory bodies would coordinate better as they do their work since they often ask for the same information. Silberman didn't have any comment on that.

Darnell also spoke of an increasing emphasis on consumer research and education, at a time Bank of America is trying to make the consumer bank more profitable.

He said the bank has followed customers around for a day to see how they interact with the bank's products and talked with them about what kinds of things they would want.

Earlier this month, the bank inked a deal with online learning nonprofit Khan Academy to launch BetterMoneyHabits.org.

Wells Fargo eyes Charlotte for agricultural lending hub

Charlotte is among cities that are in the running for a Wells Fargo food and agricultural lending hub that the company is planning to create as it makes a push to significantly expand such lending beyond the West Coast.

Wells - which already has similar hubs in California, Chicago and Dallas - wants a hub east of the Mississippi River, Rob Yraceburu, who oversees Wells’ National Food & Agribusiness Division from the West Coast, said Friday.

“On paper, Charlotte certainly is a prime candidate,” said Yraceburu, who on Thursday was named head of the division.

Wherever the hub is placed, it’s not expected to create, at least initially, a significant amount of jobs. Yraceburu estimated that Wells will likely employ 20 to 25 people to run the East Coast agricultural lending operation, and roughly 60 percent of those would be based in the hub.

San Francisco-based Wells is already a major food and agricultural lender in the U.S. The American Bankers Association, citing fourth-quarter 2012 Federal Deposit Insurance Corp. data, said Wells was the No. 1 U.S. farm lender, lending $8.9 billion.

Rabobank, which is based in the Netherlands, was No. 2, with $3.8 billion.

Four years after it acquired Wachovia, Wells is setting its sights on growing agricultural lending on the East Coast.

“Wachovia did not have a significant emphasis on agriculture in the East,” Yraceburu said.

He said Atlanta is also among cities being considered for the East Coast hub. But he noted that Charlotte is the East Coast headquarters for Wells. That might give it a strong advantage as Wells decides where to place the hub.

“We have a big base of leadership already in Charlotte,” he said. “We can leverage the support teams that we already have in Charlotte.”

Thursday, April 18, 2013

Wells drops in retail banking satisfaction rankings

Wells Fargo has fallen back to the bottom of J.D. Power and Associates retail banking satisfaction index in the Southeast, the consumer organization reported Thursday. It's the latest sign of erosion in the bank's consumer ratings that have dogged Wells since taking over Charlotte-based Wachovia.

The bank took over the cellar spot from Bank of America in the 2013 survey. Still, both banks improved their raw scores in a year in which big banks made up a lot of ground on their smaller brethren.

“Many of the big banks have made great strides in listening to what their customers are asking for: reducing the number of problems customers encounter and, more importantly, improving satisfaction with fees," J.D. Power's senior banking director Jim Miller said in a statement.

Bank of America and Wells Fargo have now traded the bottom two spots in the Southeast for the past three years, since Wells bought Charlotte-based Wachovia -- which had a better reputation for customer service.

That bank's former customers now with Wells have complained that the San Francisco bank has focused on pushing more and more products over personal service.

Wells was at the bottom of the J.D. Power and Associates rankings in 2011, the year the bank ditched the Wachovia name in most of its Eastern markets. Bank of America claimed the last-place ranking in 2010, a year when Wachovia ranked several spots higher.

Late last year, Wells Fargo fell from the top spot in the American Consumer Satisfaction Index rankings. At the time, bank spokesman Josh Dunn said the bank's internal surveys indicated customer satisfaction was still  at record highs.

“We are committed to continually improving our customers’ experience with us, and we’re always looking for ways to apply their input and further strengthen our customer service,” he said.

Read more here: http://www.charlotteobserver.com/2012/12/11/3718902/american-customer-satisfaction.html#storylink=cpy

Wells Fargo has higher J.D. Power rankings this year in other regions of the country, like the Northeast and California.

Wednesday, April 17, 2013

PNC to close Charlotte branch

Charlotte won't be immune from planned branch reductions by Pittsburgh-based PNC Financial Services Group.

A spokesperson for the bank said Wednesday that it will shutter its drive-through-only branch at 741 Westinghouse Blvd. June 21.

Earlier this year, the bank announced plans to close about 200 branches across the U.S. as part of a cost-cutting strategy.

Customers and clients of the Westinghouse Boulevard branch were notified of the planned closure in late March, the spokesperson said. The operations at the Westinghouse Boulevard location will be transferred to a PNC branch that's been open in Carmel Executive Park.

PNC bought Raleigh-based RBC Bank for $3.45 billion last year from Royal Bank of Canada. The purchase gave PNC a presence in the Carolinas.

Aquesta Bank to issue its first stock dividend

Aquesta Bank will issue a 20 percent stock dividend to its shareholders effective at the end of the month, a first for the Cornelius-based bank, it announced alongside its first quarter earnings Wednesday.

In a stock dividend, new shares are issued and given to shareholders based on how many they own. In somebody owned 100 shares in Aquesta Bank, he or she would receive 20 shares under this plan. The shares will be given out May 15 to shareholders of record on April 29.

The bank's common shares have traded over-the-counter since June.

“Our shareholders have supported us with their business and confidence through the difficult economic turmoil of the Great Recession," CEO Jim Engel said in a statement. "The Board of Directors and I want to express our appreciation by this stock dividend.”

The bank also said it earned $345,000 in the first quarter, more than double what it earned in the same time period last year and up 13 percent from the fourth quarter.

Assets grew $5 million in the first quarter, an annualized rate of 10 percent. Engel said the bank has "shifted to a more growth focused mode" and wants to take market share from competitors.

Aquesta Bank primarily serves businesses in the Lake Norman area.

National firms increasing private equity competition in North Carolina

With more capital available than there are good deals to fund, large private equity firms are increasingly competing for middle-market business in North Carolina, says Joel Lanik, partner at Charlotte-based Frontier Capital.

They're looking for companies with growth potential in a fragmented economic recovery. That's taking them into territory once dominated by regional firms like the ones headquartered in Charlotte.

"We're competing now with more national footprinted people," he told an Association for Corporate Growth meeting Wednesday morning at the Duke Mansion.

State Treasurer Janet Cowell headlined the event, speaking about the state's N.C. Innovation Fund that makes private equity investments in North Carolina companies. The fund, managed by Credit Suisse, has been around since 2010 with $232 million in capital.

Frontier Capital has received some of the money to manage. Lanik was joined at the Duke Mansion by representatives of two other firms that have received capital from the fund: Charles Grigg of Carousel Capital and Ed McMahan of Falfurrias Capital Partners.

Cowell spoke with the Observer this afternoon. Stay tuned for more from that conversation.

PNC upgrading ATMs to dispense dollar bills

PNC Financial Services Group said Wednesday that it plans to upgrade its Charlotte-area ATMs to enable them to dispense dollar bills, a move it has already made in other states.

A spokesperson for the Pittsburgh-based bank said the upgrades will take place throughout the Carolinas over the summer.

The bank has already converted ATMs in Delaware, New Jersey, Ohio and Washington, D.C., the spokesperson said.

The new ATMs will also allow customers who deposit checks to get a receipt that features an image of the check, a service already being provided by some other banks in the Charlotte area. Also, Bank of America announced this month that it plans to roll out new ATMs that allow customers to withdraw in $1 amounts.

PNC has about 7,000 ATMs and operates in 19 states and the District of Columbia. It has 95 ATMs in what it calls its western Carolinas market, which runs, roughly, from Greensboro to Asheville and includes upper South Carolina.

PNC entered the Carolinas when it bought Raleigh-based RBC Bank for $3.45 billion last year from Royal Bank of Canada.

Tuesday, April 16, 2013

Charlotte lawmakers support study of credit access

A group of state lawmakers from Charlotte are throwing their support behind a bill that seeks a study of credit accessibility for low- and moderate-income people in North Carolina.

Rep. Evelyn Terry, a Winston-Salem Democrat, introduced the bill into the General Assembly last week. Eight representatives have signed on, four from Charlotte: Kelly Alexander, Carla Cunningham, Beverly Earle and Rodney Moore, all Democrats.

House Bill 678 would authorize research into how state and federal laws might be limiting access to credit. Among other things, the bill also calls for a study of which incentives are used by financial institutions that lend to low- and moderate-income people.

The North Carolina Office of the Commissioner of Banks would conduct the research, according to the current version of the bill.

Terry is serving her first term in the legislature. A Winston-Salem native who said she has worked in the public housing sector, Terry called the bill “something I’ve been wanting to do for a long, long time.”

Loans of only $200 to $1,000 “would make all the difference in the world to some people,” she said Tuesday. But North Carolinians who need such loans for, say, emergency car repairs have few options, which include predatory lenders, she said.

“I want to find a way forward to help these people get up out of that rut,” she said.

Alexander said the bill would result in the banking commission studying, for example, the kind of lending for which Grameen Bank is known. Grameen, based in Bangladesh, was formed to help people in that country escape poverty. The bank, which specializes in microloans for entrepreneurs, opened a Charlotte branch last year.

“The idea is to take a look at some of these principles and to see how they might be able to be employed to give access to credit to low- and moderate-income folk in our state,” Alexander said.

Although all nine sponsors are Democrats, Alexander believes the bill could have a chance in the Republican-controlled legislature. “I think there’s a growing recognition that we have to do something,” he said.

But Nathan Batts, counsel for the North Carolina Bankers Association, said he was concerned about “having another study bill for the sake of having another study bill.”

Batts said he worried about the costs associated with the study. Some of Terry’s goals might be achieved by modernizing and clarifying state laws that govern interest rates and fees, Batts said.

Merrill Lynch fined more than $1M over securities trading

A regulator fined Merrill Lynch $1.05 million Tuesday for not making sure customers got the best prices in transactions involving a type of security.

The Financial Industry Regulatory Authority, an independent regulator for securities firms doing business in the U.S., also said Merrill Lynch, which is part of Bank of America, has been ordered to pay more than $323,000 in restitution, plus interest, to affected the clients as part of the settlement.

FINRA said it found that Merrill's computer programming for nonconvertible preferred securities was flawed and led to prices being quoted from only primary listing exchanges, omitting better market prices listed on other exchanges. Merrill made 12,259 such flawed transactions, according to FINRA.

"This matter was caused by a processing issue that has been corrected, and we are compensating affected clients," Merrill spokesman Bill Halldin said Tuesday.

It's not the first FINRA fine against Merrill.

In September, it was fined $500,000 for failing to file more than 650 reports, including consumer complaints, criminal complaints and settlements. In June, it was fined $2.8 million and paid $32 million in restitution to settle claims that it overcharged tens of thousands of customers from 2003 to 2011. In January 2012, it was fined $1 million over claims it failed to mediate disputes with employees over bonuses.

Bank of America bought Merrill in January 2009 in a deal that became highly criticized by shareholders who said Merrill's deteriorating financial held was concealed from them. This month, a federal judge approved a $2.42 billion cash deal to settle shareholder claims that the bank misled investors in the Merrill purchase.

Wells Fargo economist expects 2Q consumer spending to slow

Wells Fargo's chief economist said he expects a slowdown in consumer spending in the second quarter, despite a pickup in the first quarter.

John Silvia said inflation, higher taxes and economic uncertainty are contributing to sluggish wage gains, particularly for low- and middle-income people.

"That's that underlying fundamental that really says that the trend in consumer spending is just not as strong as the first quarter," Silvia said.

Silvia made the comments in a video Wells Fargo published on YouTube Monday.

Silvia also said he isn't expecting major job gains in the coming months. Rather, job growth might be on par with that of the past couple of years, with 160,000 to 180,000 jobs added per month, he said. The added jobs will primarily be in the service, construction and manufacturing sectors, he said.

"When you look at who's getting the jobs, it's primarily younger workers who have computer skills and college education," he said. "What our society does not produce is the old, traditional, low-skilled, semiskilled manufacturing jobs."

Bank of Commerce reports profit, more lending opportunities

Charlotte-based Bank of Commerce reported Tuesday a first quarter profit of $69,000 -- up 48 percent from the same time period last year as executives say business is picking up.

"Over the past few months we have seen an increase in business activity: and, as a result, more lending opportunities," CEO Wes Sturges said in a statement. " We are pleased to be able to report both loan growth and increased profitability for the quarter."

The bank's loan book grew about 3 percent since the end of the year, to $92 million, as total assets fell.

Watt still at the top of the list for FHFA

Though a couple other names have been floated of late, U.S. Rep. Mel Watt, the Charlotte Democrat, remains at the top of the list to be named director of the Federal Housing Finance Agency, according to Politico this morning.

The FHFA oversees mortgage giants Fannie Mae and Freddie Mac. The two have been struggling under the weight of thousands of delinquent loans.

Watt has served for two decades on the House Financial Services Committee.

Other names have included economist Mark Zandi of Moody’s Analytics, Ginnie Mae president Ted Tozer and Penn professor Susan Watcher.

Monday, April 15, 2013

Greensboro bank set to auction off bailout investment

Greensboro-based NewBridge Bancorp is set to become the latest North Carolina bank to exit the federal bank bailout program through a public auction.

The U.S. Treasury said Monday the preferred stock investment in NewBridge would go to auction along with seven other banks. Bidding is scheduled to end Thursday.

NewBridge had one of the largest remaining Troubled Asset Relief Program stakes in North Carolina, at $52 million.

The Treasury has regularly auctioned off bailout investments over the past year as it tries to extricate itself from the financial crisis-era program.

When they go to auction, these investments are generally sold at a discount. The government can still break even, however, when dividend payments are included.

Friday, April 12, 2013

Bank of America fails to get kickback suit dismissed

A federal judge has denied Bank of America's request to dismiss a class-action lawsuit that claims it participated in a kickback scheme involving insurance companies.

The case centers on alleged violations of the federal Real Estate Settlement Procedures Act, which requires various disclosures for homebuyers in an effort to protect consumers. RESPA also makes it illegal for anyone to receive fees for services they did not perform in connection with writing loans and the myriad other processes involved in buying a house.

According to the homeowners who filed the suit, Bank of America, which made their loans, colluded with private mortgage insurance companies to funnel kickbacks to a Bank of America subsidiary. According to court documents, the deals involving the Bank of America subsidiary and the private mortgage insurance companies were structured so that the subsidiary, which was supposed to be a reinsurer, assumed little to no risk.

Private mortgage insurance, or PMI, protects lenders in case a homebuyers defaults. Homebuyers who don't make a 20 percent downpayment typically pay PMI.

The lawsuit - filed by Thomas Riddle, Marilyn Fischer and Jeffrey Stanton - names Genworth Mortgage Insurance Corp., Mortgage Guaranty Insurance Corp., Radian Guaranty, Republic Mortgage Insurance Co., Triad Guaranty Insurance Corp. and United Guaranty Residential Insurance Co. as being involved in the alleged scheme with Bank of America and its reinsurance subsidiary.

The defendants sought to have the case dismissed for statute of limitations reasons. Judge Berle Schiller of the Eastern District of Pennsylvania denied the request Thursday.

Reached Friday night, Bank of America spokesman Lawrence Grayson called Schiller's ruling procedural and not based on the merits of the case. "We believe the allegations are without merit, and we will continue to vigorously defend against them," he said.

Swope Montgomery retiring at BNC

BNC Bancorp CEO Swope Montgomery will retire in June on his 65th birthday, the bank announced Friday. He will be replaced by the bank's president, Rick Callicut.

Montgomery will remain on the bank's board of directors. High Point-based BNC is the parent company of Bank of North Carolina.

The bank bought Charlotte-based commercial bank First Trust last year, giving it a larger foothold in the Charlotte market. It now has three branches and a mortgage office in the city, as well as branches in Concord and Mooresville.

Update Tuesday: The company disclosed Tuesday morning more details of Montgomery's retirement package. For two years, he'll get a $200,000 annual consulting contract, the title to the company car he's been using, a $500 monthly car allowance, $125 per month for his cell phone, country club dues and medical care.

Wells Fargo CEO calls for pause before more regulation

Wells Fargo’s CEO called Friday for a break in the rolling out of any additional government regulations that would affect the country’s largest banks, saying existing policies must first be given “a chance to work.” 

John Stumpf made the remarks during a earnings call in which the San Francisco-based bank reported record profit of $5.2 billion for the first quarter, an increase of 22 percent from the year-ago quarter. The higher earnings came despite the bank’s revenue falling to $21.3 billion, a decline of $300 million from the first quarter of 2012.

Before ceding the call to Wells’ chief financial officer, Stumpf launched into his commentary against more regulation.

“There are ongoing discussions about the need for more regulation and other changes,” Stumpf said. “We do not need additional legislation aimed at big banks. Important and significant regulatory changes have been made since the financial crisis, and we need to give existing regulations a chance to work, especially now when all of our energy should be focused on creating growth and new jobs.”

The day before, Stumpf and other members of the Financial Services Forum met with President Barack Obama at a White House event that was closed off to the media.

The forum, which is based in Washington, D.C., and whose members are CEOs of major U.S. financial institutions, says its mission includes pushing for policies that encourage savings and investment. During the meeting with the bank heads, Obama talked about ways to boost business confidence and the economy, according to Bloomberg News.

A Wells Fargo spokesman confirmed Friday that Stumpf attended the White House meeting.

Following the downturn, the federal government created regulations, including those in the Dodd–Frank Wall Street Reform and Consumer Protection Act, that have become costly for banks to comply with but are meant to prevent another major economic downturn. For example, every year, major banks, such as Wells Fargo and Bank of America, must participate in so-called "stress tests" intended to gauge how they would fare in financial crisis.

Stumpf, during the earnings call, touted the importance of banks to the country.

“Banks fuel and support economic growth, and we need banks of all shapes and sizes to serve the diverse needs of a diverse economy,” he said.

“All banks add value, and big banks have unique resources and capabilities to help the economy, including coast-to-coast convenience, a broad range of products and services and technology innovations serving large and small customers alike.”

Thursday, April 11, 2013

Bank of America, Wells Fargo No. 1 for electronic transactions

Among U.S. financial institutions, Bank of America was the biggest receiver of payments known as automated clearing house transactions in 2012, and Wells Fargo was the largest originator, according to data released this week by The Electronic Payments Association.

ACH payments encompass a wide range of electronic transactions, from direct deposits to purchases made on the Internet to online bill payments. The Electronic Payments Association, based in Herndon, Va., governs the ACH system.

Charlotte-based Bank of America received $1.7 billion in ACH payments in 2012, retaining the first-place ranking it had in 2011, when it received $1.6 billion.

San Francisco-based Wells Fargo received $1.3 billion in 2012, putting it in second place.

Wells Fargo originated $3.5 billion in ACH payments in 2012, surpassing JPMorgan Chase & Co., which in 2011 was the biggest originator. New York-based JPMorgan fell to No. 2 last year, originating $3.4 billion in payments.

 In 2012, there were roughly 21 billion ACH payments, up 4.19 percent from 2011, the association said. For the year, $36.9 trillion was transferred over the ACH network, an increase of 8.76 percent over 2011.

N.C. attorney general warns of scammers claiming to be banks

N.C. Attorney General Roy Cooper's office sent out an alert today warning people of scammers who send text messages claiming that a person's bank account or credit card has been blocked.

The texts often contain a phone number. If called, the groups ask for personal information like Social Security Number or bank account number. Cooper's alert notes that banks would not generally reach out to a customer that way if there really was a problem. He cautions never to give out personal information to someone who contacts you.

Cooper says a half-dozen such texts have been reported to his office in the last few days.

There's been some anecdotal evidence that the tactic has been in unusually high use in the Charlotte area recently. The Better Business Bureau of the Southern Piedmont said late last month that it had received a number of similar complaints about text messages purporting to be from Bank of America.

Ridgemont Equity closes oversubscribed $735 million fund

Charlotte private equity firm Ridgemont Equity Partners announced Thursday that it has closed a $735 million buyout and growth equity fund, its first since spinning out of Bank of America in 2010.

Ridgemont focuses on deals between $25 million and $75 million in several industries  including healthcare, industrials, energy and technology. That strategy hasn't changed much since leaving Bank of America, but its leaders have had to spend a lot more time fundraising, partner Travis Hain told the Observer.

But that's gone pretty well for them. Ridgemont originally planned for a $675 million offering, but demand was strong enough to boost it to $735 million. The firm still had to turn away money, Hain said.

The Ridgemont team has been together since 1993, and invested more than $3 billion in 115 companies since then. Bank of America spun it off three years ago as regulators made clear they would clamp down on such investments. One provision still being crafted known as the Volcker Rule would restrict banks from having relationships with private equity firms.

Ridgemont still manages some legacy investments made in its BofA days, but the bank did not participate in the latest fund.

About half of the fund has been committed so far. The firm announced its ninth deal of the fund Tuesday, an equity investment in Simpleview, a Tucscon, Ariz., company that provides software-as-a-service systems for destination marketing companies. Terms of that deal were not disclosed.

Hain said the firm has not laid plans to begin raising money for a new fund as of yet, but said it will in the future.

Allegacy credit union CEO to retire

Ike Keener
Allegacy Federal Credit Union CEO W.K. "Ike" Keener will retire at the end of the month after 38 years with the Winston-Salem based institution.

He will be replaced by Cathy Pace, currently the credit union division president. 

Over the past 20 years, the credit union has gone from about 27,000 members and $289 million in assets to more than 120,000 members and nearly $1 billion in assets.

"It has been a great run," Keener said in a statement. He spent 16 years as CEO.

Allegacy has branches in Charlotte and Davidson.

Wednesday, April 10, 2013

Obama to meet with Moynihan, other bank heads

President Barack Obama will meet this week with Bank of America CEO Brian Moynihan and other heads of the world's largest financial institutions, according to Bloomberg News.

The executives will be in Washington, D.C., for the Financial Services Forum's quarterly meeting, according to Bloomberg, which attributes the information to people briefed on the plans.

In addition to Moynihan, the other executives Obama reportedly will be meeting with include Lloyd Blankfein, CEO of The Goldman Sachs Group, and Jamie Dimon, CEO of JPMorgan Chase & Co. 

On its website, the forum calls itself a nonpartisan financial and economic policy organization. It says its purpose is to "pursue policies that encourage savings and investment, promote an open and competitive global marketplace and ensure the opportunity of people everywhere to participate fully and productively in the 21st century global economy."

The forum has 19 members, including Citigroup CEO Michael Corbat and Morgan Stanley CEO James Gorman.

Moynihan is vice chairman of the forum, and Blankfein is chairman. Wells Fargo's CEO, John Stumpf, also sits on the forum, as a member.

Wells Fargo selling rights to service some reverse mortgages

Wells Fargo is selling a $12.2 billion reverse mortgage servicing portfolio, according to an announcement from the buyer, Walter Investment Management Corp. The 76,000 loans are expected to be transferred in the third quarter.

The sale comes more than a year after Wells, the country's largest mortgage servicer, announced it would stop originating reverse mortgages. Bank of America had already made a similar announcement.

Wells Fargo said at an investor conference in March that it might test the waters on selling some mortgage servicing rights, but wasn't under pressure to do so. Bank of America has sold off hundreds of billions of servicing rights over the past few months.

The sales, which come after proposed new rules would allow banks to count less of their mortgage servicing rights toward capital, have also drawn the attention of the Consumer Financial Protection Bureau.

Paragon Bank liquidating $20 million in regional real estate

Raleigh-based Paragon Bank has announced plans to auction off about $20 million in commercial and residential real estate in Charlotte and elsewhere in the Carolinas and Virginia.

Iron Horse Auction Company, which recently handled a similar liquidation for Yadkin Valley Financial Corp., is conducting the sale. The specific properties to be sold do not appear to be posted on the firm's website yet.

The sales, however, will take place in May and include residential lots, commercial acreage, platted subdivisions and other types of properties in Charlotte, Raleigh, Lake Wylie, Lake Gaston, Elon, Richmond, Va., and coastal North Carolina.

The $20 million figure is taken from tax appraisals. Their sale price could be much lower.

Tuesday, April 9, 2013

Most mortgage settlement checks will be $300

At long last, the cash payments promised to mortgage borrowers who may have been wronged by their banks are set to be put in the mail -- but most checks are going to be a good bit smaller than homeowners had hoped.

A full 60 percent of the nearly 4 million borrowers eligible under the settlement with the Office of the Comptroller of the Currency and the Federal Reserve will receive $300, the minimum payment possible, according to data released Tuesday. About 77 percent will receive less than $1,000.

The payments stem from a settlement reached in 2011 with about a dozen major banks over allegations of robosigning and other shoddy servicing practices. The banks were originally supposed to pay consultants to review individual loan files to determine who was mistreated and how much they should be compensated.

But as costs ballooned, a new settlement in January put an end to the independent foreclosure review the regulators and mandated $8.5 billion in cash payments and mortgage relief.

Bank of America was to pay $1.1 billion in cash and provide $1.8 billion in mortgage relief. Wells Fargo was slated to pay $766 million in cash and commit $1.2 billion in relief.

The new settlement advertises payments ranging from $300 to $125,000. Only about 1,100 people will receive the maximum amount. Most of them are servicemembers foreclosed on while on active duty.

Ridgemont Equity closes fund's ninth deal

Ridgemont Equity Partners, the Charlotte private equity firm spun out of Bank of America three years ago, announced Tuesday that it has closed the ninth deal of its first fund independent of the bank.

The firm made an equity investment in Simpleview, a Tucson, Ariz., company that provides online systems for destination marketing organizations, like convention and visitor bureaus. Financial terms of the deal were not disclosed.

Telecom and technology is one of Ridgemont's four key focus areas, alongside healthcare, energy and industrials, vice president Kurt Leedy said. Within technology, software-as-a-service companies in a particular industry vertical, like Simpleview, are prime targets.

"We like to buy businesses and invest in businesses that benefit from the growth in digital data," Leedy said.

It's Ridgemont's third deal closed this year. The firm announced a $100 million joint deal with Titan River, a Texas-based oil and gas exploration and extraction company, in March. Ridgemont partnered with another Texas company, Unitex Oil and Gas, to buy oil assets in January.

Leedy declined to say how large Ridgemont's current fund is, or how the firm has progressed with it. Documents filed with the SEC in December disclosed that the fund had sold $586.1 million of its $675 million offering.

Monday, April 8, 2013

Paragon Bank to launch mobile platform

Paragon Bank, a Raleigh-based bank with a niche focus on lending to businesses and their executives, could introduce a mobile-banking platform by 2014, the president of the Raleigh-based bank's Charlotte division said Monday.

"The ability to make a deposit via phone, we're absolutely looking at that," Phillip Jurney said. "I would say this time next year we will definitely have it."

The move illustrates that small banks - Paragon is the 23rd-largest bank, by deposits, in North Carolina - are still trying to catch up with much bigger banks that already offer customers mobile technology, such as mobile check depositing. The bank had $740.7 million in deposits as of June 30, according to the latest Federal Deposit Insurance Corp. data.

Other changes are in store for the 14-year-old bank, whose products include commercial real estate loans. As of now, it has only two locations, one in Charlotte at Piedmont Town Center in SouthPark, the other in Raleigh. But the bank will likely have two branches in Charlotte and two in Raleigh by 2014 or 2015, Jurney said.

Also, the bank this year changed its name from Paragon Commercial Bank, dropping the word "commercial" in an attempt to make potential customers think of the bank as more than a commercial lender.

The bank previously announced that it plans to relocate its Charlotte operation to a new SouthPark location, a roughly 16,000-square-foot, two-story building at 6337 Morrison Blvd. Jurney said the bank will move into the building in September.

FNB United wants permission to change name, give execs more stock

Most people never hear about FNB United Corp. The Asheboro-based company's banks operate under the name CommunityOne through a large swath of North Carolina's mountains and Piedmont.

That's the main reason why the bank's management is asking for permission to change the parent company's name to CommunityOne Bancorp. The proposal will appear on the company's annual meeting ballot, according to a securities filing. The new name "better reflects FNB's identity and future direction as a state-wide community bank," it states.

FNB United also owns Bank of Granite after the two banks' joint recapitalization and merger in 2011. The company is now working to combine the two charters.

The bank's management is also asking for permission to triple the number of common shares it offers executives as part of their pay packages. Currently, the bank can give out 600,000 shares per year. FNB wants authority to give out 1.8 million. Each employee can now receive 50,000 shares per year. The proposal calls for that to double.

In December, FNB gave out 110,059 shares to its top six executives.

BofA inks financial education partnership with Khan Academy

Bank of America has joined the rapidly growing nonprofit online education site Khan Academy to launch a series of videos explaining personal finance topics.

The bank has launched a new site, BetterMoneyHabits.com, that maintains Khan Academy's trademark style to explain how to create a budget, how mortgages work, and the time value of money, among others. Users can also vote on what upcoming videos should be.

The Khan Academy has been around since 2009, with the mission of "a free world-class education for anyone anywhere." Its videos run the gamut from math to the humanities, but its financial offerings are particularly robust. Its founder, Sal Khan, was a hedge fund analyst before launching the academy in 2008.

The nonprofit brought in $1,500 in 2009, but has since boomed to $11.8 million in revenue in 2011, the most recent year for which data was available.

The Bank of America deal is not the first high-profile partnership Khan Academy has made. The nonprofit has also joined the LeBron James Family Foundation for a series of basketball-related videos on physics, math and science featuring the NBA star.

It is unclear if Bank of America is contributing money to the nonprofit. Khan says on an introductory video that Bank of America does not gain any editorial control over the personal finance videos, but says the academy will tap the expertise of the company's bankers.

"This is genuine," Khan says on the video. "Their mission is literally identical to ours."

Bank of America unveils new slogan

Visitors to Bank of America's website are now getting a taste of the bank's new slogan: "Life's better when we're connected."

A video newly posted on the bank's website lays out the essence of the campaign, which is more than a year in the making.

"Nobody gets up in the morning and says, 'The thing I want to do today is bank,'" chief information officer Laurie Readhead starts off the video by saying. One by one, a dozen bank employees describe an emphasis on trust and human connection.

"We’re dealing with more than just dollars and information," says another employee. "These are people’s lives."

A half-dozen TV ads in the new campaign aim to tell customers' personal stories; for example, how Bank of America's cash-back credit card helped buy a new dog and plan a wedding anniversary; or how a Bank of America loan helped launch a popular Chicago restaurant.

The new slogan is the bank's first in more than six years, when it rolled out the "Bank of Opportunity" campaign. Since then the Charlotte bank has suffered a number of hits to its public image, such as mortgage problems stemming from its acquisition of subprime lender Countrywide Financial Corp., and its short-lived plan to charge some customers $5 for using their debit cards.

Bank of America announced last January that it would shop around for a new ad agency, and picked WPP to be its agency of record in May. The bank also said it would send more assignments to Hill Holliday.

The bank told industry publication Ad Age on Friday that the new slogan is meant to show some "humility."

Uwharrie Capital Corp. repays three-quarters of its bailout

Uwharrie Capital Corp. has repaid three-quarters of its federal bailout money and says it will pay back the rest in the next 18 months.

The Albemarle-based parent company of community banks in Cabarrus, Anson and Stanly counties disclosed its repayment of $7.7 million in Troubled Asset Relief Program preferred stock in a securities filing. The bank originally received $10.5 million. The last $2.8 million will be paid in the next year and a half, according to the securities filing.

The company said in November it would issue new preferred stock to pay back the U.S. Treasury.

Uwharrie is in the midst of combining its three subsidiary banks and rebranding under one name.

Saturday, April 6, 2013

Bank of America to pay military members $36M in foreclosure settlement

Bank of America will pay roughly $36.8 million to military members whose homes were illegally foreclosed upon from 2006 to 2010, the U.S. Justice Department announced this week.

The money will be paid under a settlement the department reached in 2011 with BAC Home Loans Servicing LP, a Bank of America subsidiary, for alleged violations of the Servicemembers Civil Relief Act. The act makes it illegal to foreclose on the homes of members of the military while they are on active duty unless the lender gets court approval. The act also requires lenders to lower mortgage interest rates to at least 6 percent for members of the military while they are on active duty.

Under the settlement, the military members will each be given at least $116,785 -- plus compensation for any lost equity, including interest.

Bank of America has already started compensating 142 service members whose homes were illegally foreclosed on from 2006 to the middle of 2009, the Justice Department said. The bank will also provide payouts to 155 military members who were victims of illegal foreclosures from mid-2009 to the end of 2010.

In 2012, the Charlotte-based bank was one of five big mortgage-servicing companies that entered into what was dubbed the National Mortgage Settlement with the Justice Department over foreclosure abuses affecting all types of borrowers, not just members of the military. Wells Fargo, Citibank, JPMorgan Chase and Ally Financial are the other four banks involved in that settlement.

The Justice Department this week said that, under the national settlement, it is conducting an ongoing review of the five banks' practices to pinpoint any violations of the Servicemembers Civil Relief Act that might have occurred during Jan. 1, 2006, to April 4, 2012.

The $36.8 million in payments by Bank of America to the 297 military members represents only nonjudicial foreclosures, meaning those that don't require court approval.

"As the National Mortgage Settlement audits progress, the Justice Department will be requiring payments by Bank of America for judicial foreclosure and interest rate violations and by the other four servicers for judicial and nonjudicial foreclosure and interest rate violations," the department said.

Friday, April 5, 2013

Judge OKs $2.4B Bank of America settlement over Merrill Lynch deal

A federal judge in New York on Friday approved a $2.42 billion cash deal to settle shareholder claims that Bank of America misled investors about its purchase of Merrill Lynch.

The settlement was announced in September but needed court approval. Judge Kevin Castel, of the Southern District of New York, has signed off on the settlement, paving the way for shareholders to receive compensation. The task before Castel on Friday: to determine whether the settlement was fair.

“We’re pleased that this matter has been resolved,” Lawrence Grayson, spokesman for Bank of America, said Friday.

The settlement was reached after shareholders said they had not been given information on Merrill’s deteriorating financial health before they voted Dec. 5, 2008, to approve the $50 billion purchase of the company.

Bank of America has denied the investors’ allegations.

Teachers retirement systems in Ohio and Texas, the Ohio Public Employees Retirement System and a pension fund in the Netherlands are among the plaintiffs.

The settlement applies to those who owned Bank of America common shares as of Oct. 10, 2008, and had the right to vote on the Merrill deal and those who acquired common shares from Sept. 18, 2008, through Jan. 21, 2009. Some other stockholders also are affected.

April 25 is the deadline for affected investors to file a claim.

For settlement documents and court filings on the case, click here.

Thursday, April 4, 2013

Ken Thompson resigns from Hewlett-Packard board

Former Wachovia Corp. CEO Ken Thompson is resigning from the board of Hewlett-Packard, the company said Thursday in announcing other changes to the board.

Thompson has been on the board since 2006.

According to H-P's website, Thompson has been a principal of Aquiline Capital Partners, a private equity firm, since November 2011. He's also is a director of BNC Bancorp.

Thompson isn't the only person resigning from the board. H-P said Raymond Lane is stepping down as chairman. Board member John Hammergren is also leaving.

Wells Fargo target of cyber attack, Facebook page says

Wells Fargo, which just last week reported a cyber attack, has been hit Thursday with another one, according to its Facebook page.

Here's what the page says:

"We're experiencing a denial of service attack, which is a deliberate attempt to disrupt website access by flooding a site with traffic, similar to a cyber traffic jam. If you're having difficulty accessing the site or mobile banking, try logging on again as the disruption is usually intermittent. Rest assured that your account and personal information are safe. You can also call 800-869-3557 or visit one of our stores to access your accounts. We're sorry for the inconvenience and appreciate your patience as we work to resolve this issue."

Also Thursday, Winston-Salem-based BB&T said that its site was affected this week by a "targeted cyber event."

San Francisco-based Wells did not provide immediate comment.

BB&T hit by another cyber attack

BB&T said Thursday that it again has become the victim of cyber attacks, which plagued the Winston-Salem-based bank's website this week and last month.

The BB&T assault comes as some of the nation's biggest banks continue to report such attacks. Wells Fargo, for example, said intermittent problems with its website last week were caused by abnormally high traffic volumes that appeared to be the result of a cyber attack.

In so-called denial-of-service, or distributed-denial-of-service, attacks, which have become a popular form of cyber strike against big banks, Web servers are flooded with requests, which cause banks' websites to run sluggishly or temporarily go down.

Brian Davis, a BB&T spokesman, said Thursday that the bank has been the victim of off-and-on denial-of-service attacks since September.

During an attack, most visitors to BB&T's website will experience intermittent outages, he said, adding that "some people might (see) slowness. Some people might see an error message.”

On Thursday morning, an Observer reporter could not access BB&T's site. Instead, the following message appeared:

"At this time, we are experiencing intermittent outages on BBT.com. This may prevent access to the site or use of our online products and services."

Davis, though, said the bank's technical staff reported that the site was working normally Thursday morning.

BankInfoSecurity reported last year that BB&T had been hit by a cyber attack.

Bank of America unveils new ATM

Bank of America is putting the teller into its automated teller machines.

On Thursday, the bank unveiled a new type of ATM, one that provides real-time video access to a teller.

The new ATMs will be rolled out in Boston first. Bank of America spokeswoman Anne Pace said the ATMs will debut in Charlotte in late summer or early fall at Founders Hall.

Katy Knox, retail banking executive for Bank of America, said Thursday that the ATMs will make their appearance in Boston in the middle of this month. Atlanta will be the next market to get the ATMs, she said.

According to Bank of America, the new ATMs will also allow customers to:

  • Cash checks for the exact amount, even if change is involved.
  • Receive cash in $1, $5, $20 and $100 bills.
  • Deposit checks with cash back.
  • Split a deposit into two or more accounts.
  • Make loan or credit card payments.

Wednesday, April 3, 2013

N.C. small-business lending up $290M through federal program

North Carolina's small businesses have received a boost of $290.8 million in loans thanks to a federal program designed to increase lending to such businesses, the U.S. Treasury Department reported Wednesday.

The Small Business Lending Fund, created by the Small Business Jobs Act of 2010, provides capital to community banks and community development loan funds with less than $10 billion in assets apiece.

According to the Treasury Department, participating U.S. banks have boosted lending by $8.9 billion since the program began.

The $290.8 million increase in lending by North Carolina institutions is through Dec. 31. So far, the Treasury Department said, it has provided $115.1 million to seven North Carolina banks and $197,000 to one North Carolina CDLF.

Here's a look at small-business lending, as of Dec. 31, by North Carolina institutions and by how much it has increased under the program:

  • First Bancorp, of Troy: $569 million, up 15.5 percent.
  • Live Oak Bancshares, of Wilmington: $181 million, up $238.9 percent.
  • Park Sterling Corp., of Charlotte: $389 million, up 11.1 percent.
  • Premara Financial, of Charlotte: $56 million, up 15.7 percent.
  • Providence Bank, of Rocky Mount: $37 million, up 25 percent.
  • Select Bancorp, of Greenville: $51 million, up 67.7 percent.
  • Union Bank & Trust Co., of Oxford: $49 million, up 26.9 percent.

Tuesday, April 2, 2013

Paragon Bank names client-development officer for Charlotte

Paragon Bank, a Raleigh-based commercial bank whose only other location is in Charlotte, said it has hired a Charlotte-based client-development officer.

Ryan Borst will manage clients’ banking needs and be responsible for promoting Paragon’s brand, the bank said in a press release.

Paragon is North Carolina’s 23rd-largest bank by deposits, according to the Federal Deposit Insurance Corp. Paragon had $740. 7 million in deposits in the state as of June 30, the latest date for which FDIC market-share data are available.

The state-chartered bank does not have deposits outside of North Carolina, according to the FDIC, and its North Carolina market share is 0.22 percent.

Paragon, which was founded in 1999, provides products and services to businesses and those companies’ executives. It says it specializes in serving middle-market companies with revenues of $5 million to $75 million.

The company expanded to Charlotte in 2006. It’s Charlotte location is at 4725 Piedmont Row Drive.

According to the North Carolina Office of the Commissioner of Banks, Paragon had earnings of $3.9 million in 2012.

Monday, April 1, 2013

Bank of America provides details on stock redemptions

After announcing last month that it will redeem about $5.5 billion in preferred stock thanks to the Federal Reserve's approval of its capital plan, Bank of America gave shareholders more details on the redemption Monday.

All 114.4 million in outstanding Series H Depositary shares will be redeemed May 1 for $2.8 billion, while 106.9 million in outstanding Series 8 Depositary shares will be redeemed May 28 for $2.6 billion.

The Fed's approval of Bank of America's capital-distribution plan allows the bank to return capital to shareholders. Last month, the Fed, as part of an annual review process created because of the financial crisis, examined the capital plans of 18 of the country's biggest banks, approving those of 14.

Since the recession, the banks need the Fed's OK before returning capital to shareholders through either higher dividends or repurchases of shares. Bank of America, after winning the Fed's blessing for its 2013 capital plan, said it would not raise its dividend from 1 cent per share. But the bank said it will repurchase up to $5 billion in common stock.

Banking commissioner appointment awaits N.C. vote

Ray Grace, who has been North Carolina's acting banking commissioner for more than a year, is waiting to learn whether the General Assembly will allow him to serve for what remains of his predecessor’s term.

Last week, Sen. Harry Brown, a Republican from Jacksonville and a member of the Senate’s Finance Committee, introduced a resolution to make Grace the official replacement for Joseph Smith. In February 2012, Smith resigned as commissioner so that he could oversee the roughly $25 billion national mortgage settlement, designed to provide relief to homeowners hurt when the housing bubble popped. The settlement involves five of the county’s biggest mortgage servicers, including Bank of America, JPMorgan Chase and Wells Fargo.

Nathan Batts, senior vice president of the North Carolina Bankers Association, said Monday that Grace has “very strong support” within the General Assembly.

“From all indications, speaking with those in leadership, Ray is held in great regard,” Batts said, adding that his association supports Grace for the commissioner position.

He also has the backing of Gov. Pat McCrory, a Republican who took office this year and who last month unveiled his support for Grace. After Smith announced his resignation Feb. 14, then-Gov. Bev Perdue, a Democrat, nominated Grace, who was chief deputy commissioner of banks before Smith quit, to serve as his replacement. But Ha Nguyen, spokeswoman for the commissioner's office, said Monday that legislation to confirm Grace's appointment was never introduced into the General Assembly last year, resulting in Grace serving in an interim role for nearly 14 months.

Smith’s term was set to expire at the end of March 2015.

A former Marine, Grace, 64, has worked for the commission since 1974. The commission is responsible for chartering and regulating the state’s banks, thrifts and nondepository trust companies.

Grace has held various positions for the commission, including commercial bank examiner, special supervisory examiner and director of bank applications. In a December 2011 speech given to the General Assembly’s Joint Legislative Economic Development & Global Engagement Oversight Committee, Smith referred to an “inflexible regime of federal bank regulation” brought about by the recession, according to a transcript.

“Banks do want, and need, to lend to small businesses and their other traditional customers,” Grace said. “The deep and persistent recession in which we find ourselves has made that lending problematic.”

Last year, after Smith left, Grace suddenly found himself having to work with a committee of General Assembly members studying ways to modernize North Carolina’s banking laws. The modernization efforts began years ago, while Smith was still commissioner, but Batts said Grace’s interactions with the committee in 2012 helped him to establish credibility with the General Assembly, which in June passed a bill to modernize the laws.

Robert Singer, corporate counsel for the bankers association, said Monday that he expects the General Assembly to confirm Grace as commissioner.

“I would be astounded if he wasn’t,” Singer said. “I hear from folks that he has overwhelming support in both the Senate and the House.”

Nguyen said Grace was out of town and unavailable for an interview Monday.