‘The perfect scenario for our dear friends, the vulture funds’

By Geert De Lombaerde Posted on November 16, 2009 at 9:40 am

Prism Hotels & Resorts CEO Steve Van sees regulators’ extend-and-pretend policies producing only one outcome — “and hotel loans are the lead cow.”

Smart money will wait at the end of the canyon and have a historic feast of cheap hotel asset buys. Most of us will just keep our heads down and try to do the best we can as owners holding on to our hotels or as lenders working out loans.

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Tags: banking, commercial banking, commercial real estate, hotel management, lending, Prism Hotels & Resorts  

TARP opens its doors to small banks

By Geert De Lombaerde Posted on October 22, 2009 at 7:11 am

But small banks aren’t rushing to line up for President Obama’s proposed expansion of the SBA’s main lending program. And in moves reminiscent of the ongoing health reform debate, other proposals already are making the rounds.

“There are different ways to skin this cat,” said the Senator, who suggested the creation of a $50 billion loan pool that would combine TARP funds, Federal Reserve loans and bank contributions that lenders could use to service small businesses. That idea has gained the support of about 30 other senators.

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Tags: banking, commercial banking, financial regulation, government stimulus, small business, TARP, Troubled Assets Relief Program, U.S. Small Business Administration  

BB&T, Regions, SunTrust top satisfaction list

By Geert De Lombaerde Posted on October 21, 2009 at 8:03 am

J.D. Power has asked the question and crunched the numbers to figure out how satisfied small businesses are with their banks. For Middle Tennessee’s largest banks, the numbers vary quite a bit: BB&T, which ranks 13th by deposit market share, leads the list and Regions and SunTrust also score well above the industry average. Off the pace are Bank of America, Fifth Third and U.S. Bank.

The equivalent survey from a year ago has Regions a lot further down the list. Overall satisfaction has fallen more than 3 percent as the credit crunch and recession have taken their toll and bankers and small biz owners alike.

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Tags: banking, commercial banking, company rankings, J.D. Power and Associates, small business  

First Tennessee shuffling leadership

By Geert De Lombaerde Posted on August 28, 2009 at 11:54 am

Josh Flory checks in with some interesting management news from First Tennessee. The bank has lured King Purnell, a former SunTrust regional president, to lead its commercial real estate line of business statewide, a new approach that bank leaders say complements the market-based org chart the bank has long used.

“We’ll have very focused attention on (each) line of business,” [Charles Burkett] said. “These are the businesses that we want to be in, that we want to grow, we want to support, and it gets our people servicing customers in those segments with additional focus on it.”

SEE ALSO: Naomi Snyder with the corresponding Nashville news that ends up with Mike Edwards in Memphis and Doyle Rippee in charge of Middle Tennessee.

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Tags: banking, Charles Burkett, commercial banking, Doyle Rippee, executive leadership, First Tennessee Bank, Josh Flory, King Purnell, Mike Edwards, The Bank Draft  

Small biz gets no credit

By Geert De Lombaerde Posted on July 22, 2009 at 2:08 pm

The good news: The National Small Business Association says the number of small-business owners who think the economy will grow in the next year has more than doubled since December. The bad news: The number jumped from 3 percent to 7 percent and many of the business who could use a financing boost likely can’t get one.

There was, however, an increase in the number of small-business owners who used a traditional bank loan in the last 12 months. While a positive indicator that bank loans are an option for some small businesses, this increase also reflects the fact that more businesses are turning to outside sources of financing as the difficult economy has forced them to use up business savings and earnings—making access to affordable capital all the more important.

SEE ALSO: A report from federal regulators that says almost 90 percent banks are tightening the loan underwriting standards.

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Tags: banking, commercial banking, economic indicators, entrepreneurship, financial regulation, lending, National Small Business Association, Office of the Comptroller of the Currency, small business, small-business lending  

On being a start-up banker in these times

By E. Thomas Wood Posted on July 19, 2009 at 9:07 pm

Claire Tucker, veteran Nashville banker and president and CEO of one-year-old CapStar Bank, shares these observations from last week’s American Bankers Association De Novo Bank Conference, held in Washington, D.C.:

Notable officials at the meeting were Ed Yingling, president and CEO of the American Bankers Association, Diane Casey-Landers, COO of the ABA, and of course, Dr. De Novo himself, Bob Turicchi. I was a bit surprised that there were fewer than 40 bankers at the conference, a figure that may be directly correlated to the relatively low number of banks that have been formed of late, particularly in the last year.

There were several themes that quickly emerged as THE hot topics:

• The content of legislation currently being debated in the Committee on Financial Services in the House of Representatives must focus on three areas of reform: the creation of a systemic oversight regulator; the creation of a mechanism for resolving troubled systematically important institutions (a/k/a “too big to fail”) and filling in gaps in the regulation of the shadow banking system. In a conversation I had with Mr. Yingling on Monday evening, he reinforced the need for bankers to weigh in on the issues to place focus on what really caused the crisis in the financial industry. The bottom line, which I subscribe to, is that traditional banks are the solution, not the problem.

• Ms. Casey-Landry honed in on the discussions occurring between the Financial Accounting Standards Board (FASB) and the ABA regarding “mark-to-market” accounting rules. It is the position of the ABA that there must be a distinction between “market values” and “economic values.” Traditional banking typically entails making loans and accepting customer deposits… not active participation in the daily trading of securities. What it all boils down to is that mark-to-market is applicable when there is a willing buyer and a willing seller. Otherwise, the result can be unrealistic and understated valuations. My take is that shareholders will be negatively affected by the current proposed rules.

• The issue that hit closest to home for me, as CEO of a de novo bank, was the pending additional assessment that may be levied on all banks by the Federal Deposit Insurance Corporation. In essence, regardless of a bank’s financial performance, balance sheet composition, or level of capital, all must pay into the FDIC fund to replenish the funds that have been dispersed to the depositors of failed banks. I can attest to the negative financial implications of using valuable capital to cover the failures of others.

My take-away from the conference is that we must stay actively involved, giving feedback to our representatives in D.C. regarding the destructive effects to our core banking system, in Nashville, in Tennessee and in our entire region, that will result if we are caught up in the web and end up paying for the irresponsible behavior and business decisions of those operating in a less regulated environment than the traditional community bank.

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Tags: American Bankers Association, banking, CapStar Bank, Claire W. Tucker, commercial banking, Edward L. Yingling, financial regulation, startup banks