BEST PRACTICES: ACQUIRING SBA LOANS FROM THE FDIC; WHAT SBA LENDERS SHOULD KNOW. An SBA lender has an excellent opportunity to expand its portfolio by acquiring from the FDIC SBA loans originated by a failed bank. These loans may be acquired at a discount and are backed by an SBA guaranty and, possibly, FDIC loss sharing. However, such loans and acquisitions come with risks that lenders should consider carefully before proceeding. Author:  Amy R. Brownstein, Esquire.  Source:  Starfield Smith, PC

MBA: COMMERCIAL/MULTIFAMILY LOAN ORIGINATION VOLUME DIPS SLIGHTLY IN Q2.  According to the MBA’s Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, a decrease in loan originations for retail and multifamily properties led to a 2 percent decrease in overall commercial/multifamily originations in the second quarter compared with the same period a year ago.  Author: Scott Reid.  Source:  REBusiness Online.

FLORIDA COMMUNITY BANK CLOSES IPO WITH $104M RAISED. The parent company of Florida Community Bank completed its IPO with net proceeds of $104 million to fuel its growth. Weston-based FCB Financial Holdings (NYSE: FCB) said that its underwriters exercised their option to purchase an additional 720,000 shares for $22 each, which raised net proceeds of $14.7 million. The initial public offering, which launched in early August, resulted in $89.3 million in net proceeds for the company. Author: Brian Bandell.  Source.  South Florida Business Journal.

AUDITING YOUR SBA PORTFOLIO.  Loans are made by participating lenders under an agreement with the SBA to originate, service, and liquidate loans in accordance with the SBA’s rules, regulations, policies, and procedures. Keeping your SBA loans in compliance is imperative to ensuring the collectability of your guaranty. This begins with managing the 7(a) loan approval process in an effort to mitigate risk of potential loss.  Source: BancServe.

THE EVOLUTION OF SBA LOAN SERVICE PROVIDERS.  Back in the early 90’s, I was teaching bankers how to do SBA lending. I also helped in doing credit analysis and loan packaging. Everyone called me a loan packager. As my business has evolved into setting up SBA departments and finding people to fill SBA jobs, so has the cottage industry that seeks to support small SBA lending programs.  Today we call this industry that of the SBA Loan Service Providers or LSP. They come in all skill sets. Some just do SBA loan packaging. Others focus on SBA credit analysis, etc. There are a few that are what we might call “full service”, proclaiming that they have the expertise to be your entire SBA back office. While it would serve the SBA lending community for the SBA to classify LSPs as “certified” according to their skills and abilities, it will be incumbent upon you to check them out. Significant due diligence is required. Author: Tim Terry.  Source:  SBA Advisors.

PRIVATE EQUITY: CHANGING PERCEPTIONS AND NEW REALITIES.  Industry performance is better than previously thought, but success is getting harder to repeat. Investors and firms will need to adapt to changing conditions.  Authors:  Sacha Ghai, Conor Kehoe and Gary Pinkus.  Source: McKinsey & Company.

STONEGATE BANK MOVES TOWARD NASDAQ LISTING. Stonegate Bank took its first step toward moving its stock to the NASDAQ exchange.  The Pompano Beach-based bank (OTCBB: SGBK) filed a Form 10 registration statement with the Federal Deposit Insurance Corp. to become a regularly reporting company.  Author: Brian Bandell.  Source.  South Florida Business Journal.

WHY BITCOIN MATTERS FOR BANKERS.  It can be lonely out there for a Bitcoin aficionado, especially for a banker.  Ask Alan Lane. In October, the president and CEO of Silvergate Bank in La Jolla, Calif., was up in Sacramento for a roundtable convened by the California Bankers Association and the state’s Department of Business Oversight. Reading a laundry list of about a dozen issues on the department’s radar, Commissioner Jan Lynn Owen mentioned Bitcoin — the Internet currency, payment system and technology that’s been grabbing headlines, igniting controversy and inspiring innovation across the globe. Lane pricked up his ears, in part because the $616 million-asset Silvergate had been in discussions about banking a Bitcoin startup.

“I raised my hand and I said, ‘Is anybody else talking with any potential Bitcoin customers?’ There were a lot of blank stares around the room,” Lane recalls. “A lot of the bankers hadn’t heard of it. … One guy, I don’t remember who it was, said, ‘I think they ought to outlaw it.'”Lane’s reply:  “Well, if they outlaw it, I’m going to lose about $1,200 because I just bought 10 bitcoin.” Later, he says, another banker friend teased him, “Uh oh, Alan, you shouldn’t have said that. You just put a target on yourself with the regulators.”  Author:  Marc Hochstein.  Source:  American Banker.

STONEGATE BANK COMPLETES ACQUISITION – GROWS ASSETS 51%.  Stonegate Bank grew its assets over 51 percent after completing its acquisition of Florida Shores Bancorp.Florida Shores Bancorp had two subsidiaries that Stonegate Bank picked up: Florida Shores Bank – Southeast in Broward and Palm Beach counties, and Florida Shores Bank – Southwest in Lee, Sarasota and Charlotte counties. read entire article… Author: Brian Bandell.  Source:  South Florida Business Journal.

UNOFFICIAL PROBLEM BANK LIST DECLINES TO 645 INSTITUTIONS.  The FDIC released details of its enforcement action activity through October 2013. For the week, there were nine removals that lower the Unofficial Problem Bank List to 645 with assets of $221.2 billion. At the end of November last year, the list held 856 institutions with assets of $326.4 billion. Author.  Bill McBride.  Source.  Calculated Risk Finance & Economics.

EVOLUTION OF THE LOAN MODIFICATION.  In the late 1990’s and early 2000’s, CMBS loan modifications and extensions were relatively straightforward. Early CMBS loans were originally underwritten based on in place cash flow and reasonable LTV’s and DSCR’s, loans typically transferred into special servicing either due to a maturity default or payment default. The reasons for the defaults were, again, fairly straightforward, loss of an anchor tenant in a shopping center or mall, loss of one or more big tenants in an office building, franchise issues with a hotel, or high vacancy in a multi-family property that was competing against relatively inexpensive housing.  Author:  Andrew Hundertmark.  Source:  CWCapital Asset Management.

MIAMI BEACH BANKER PARTY SHOWS WHY HOTEL DEBT FILLS BONDS.  The Fontainebleau Miami Beach is booked solid next week as bankers prepare to crowd the iconic lobby for cocktails at an annual bond-market convention. For owner Jeffrey Soffer, the conference helps justify a $1 billion makeover that almost cost him the property three years ago.  Author:  Sarah Mulholland.  Source:  Bloomberg.

BANK CHIEF WORRIED ABOUT “IMPOSSIBLE” REGULATIONS ON COMMUNITY BANKS.  Douglas Manditch expects regulatory costs to increase for Empire National Bank, the $455 million-asset bank in Islandia, N.Y., that he is chairman and chief executive of. History suggests he is right. In 2011, Empire allocated 13 percent of its revenue to compliance and governance. A year later, it was 16 percent.  Source:  TriNovus.

BOFA WILL DISSOLVE MERRILL LYNCH UNIT WHILE KEEPING NAME.  Merrill Lynch & Co., the 99-year-old firm known for its “thundering herd” of brokers pitching stocks to Main Street, may cease to exist as a legal entity more than four years after being acquired by Bank of America Corp.  While Bank of America will keep the Merrill Lynch brand for its retail brokerage and investment bank, the Charlotte, North Carolina-based company plans to dissolve the subsidiary as early as the fourth quarter, according to an Aug. 2 filing. The firm will assume Merrill Lynch’s obligations and debt.

GREAT FLORIDA BANK TO BE ACQUIRED BY FLORIDA COMMUNITY BANK.  Florida Community Bank signed a deal to acquire Great Florida Bank, which has been under orders from regulators to raise capital. Weston-based Florida Community Bank, a subsidiary of private equity-funded Bond Street Holdings, missed out on a deal to acquire Jacksonville-based Atlantic Coast Financial Corp. (NASDAQ: ACFC) in June when the shareholders of the selling bank voted against the deal.  Author:  Brian Bandell.  Source:  South Florida Business Journal.

NEW REGULATIONS ARE STRANGLING COMMUNITY BANKS.  The wave of new banking regulations that Congress created to deter and punish Wall Street’s misdeeds is landing with much greater impact on the U.S.’s almost 7,000 community banks than on the too-big-to-fail lenders. Community banks didn’t cause the financial crisis; they played by the rules. Because of their time-tested business model, one based on customer relationships rather than transaction volumes, community banks aren’t a threat to the financial system. Yet they are being forced to pay a penalty in regulatory costs — to comply with rules aimed at preventing the bad behavior on Wall Street from happening again. Author:  Camden R. Fine.  Source:  Bloomberg.

SENATORS DRAFT HIGHER CAPITAL REQUIREMENTS FOR BIGGEST U.S. BANKS.  The largest U.S. banks, including JPMorgan Chase & Co. (JPM) and Bank of America Corp., would have to hold capital in excess of Basel III standards under a proposal being drafted by Senate Democrats and Republicans to curb the size of too-big-to-fail banks. The current draft of the legislation would require U.S. regulators to replace Basel III requirements with a higher capital standard: 10 percent for all banks and an additional surcharge of 5 percent for institutions with more than $400 billion in assets. Senators Sherrod Brown, a Democrat from Ohio, and David Vitter, a Republican from Louisiana, have said they intend to introduce the bill this month.  Author:  Cheyenne Hopkins.  Source:  Bloomberg.

PENSION FUNDS, ENDOWMENTS HUNGER FOR REAL ESTATE ASSETS.  Last May, the California State Teachers’ Retirement System (CalSTRS) paid roughly $800 million for a majority interest in LCOR, an investment, management and development firm whose portfolio includes 7,400 multifamily units, 7.7 million sq. ft. of commercial space and multiple development projects. In June, the California State Public Employees’ Retirement System (CalPERS) plunked down $100 million for one-third of Bentall Kennedy, a real estate investment advisor with $8.4 billion in U.S. assets under management. And in December, the Teachers Insurance and Annuity Association College Retirement Equities Fund (TIAA-CREF) agreed to pay $250 million for a 49 percent equity stake in a high-rise apartment tower at 8 Spruce Street, in downtown Manhattan, and put down another $551 million for a 70 percent stake in MiMA, a luxury mixed-use complex at West 42nd Street. Author:  Elaine Misonzhnik, Senior Associate Editor.  Source:  National Real Estate Investor.

ICBA ASKS CFPB TO ADJUST FINAL MORTGAGE RULES ON BEHALF OF COMMUNITY BANKS.  The Independent Community Bankers of America (ICBA) began February by visiting Capitol Hill to argue that community banks should be exempted from many of the Dodd-Frank financial reform law’s new regulations. ICBA’s vice president of mortgage finance policy, ended the month by writing a comment letter asking that final mortgage rules the Consumer Financial Protection Bureau (CFPB) issued be adjusted to avoid leaving many consumers without access to mortgage credit. While acknowledging that the ICBA is generally pleased that the final rule provides some flexibility for community banks to continue to offer mortgage loans – including balloon mortgages – to the consumers in their communities, Haynie wrote that concern remained that the exemptions and exceptions would cover far too few community banks.  Author:  Not Listed.  Source:  TriNovus.

U.S. FINANCIAL TRANSACTION TAX BILL INTRODUCED IN CONGRESS.  Legislation introduced Thursday by Sen. Tom Harkin, D-Iowa, and Rep. Peter DeFazio, D-Ore., would impose a 0.03% tax beginning in 2014 on non-consumer financial trading, including stocks, bonds and other debts after their initial issuance, and would include derivative contracts, options, puts, forward contracts and swaps. The backers say the law would discourage speculative and high-speed trading and raise as much as $352 billion over 10 years, according to estimates for a similar proposal floated in the last Congress.  Author:  Hazel Bradford.  Source:  Pensions & Investments.

COMMERCIAL MORTGAGE BOND DEMAND SPURS BORROWER’S MARKET.  The rally in commercial mortgage bonds since mid-2012 has paved the way for a brisk start for issuance this year and sweetened terms for borrowers.  A trio of Wall Street dealers this week plan to sell $600 million of commercial mortgage-backed securities based on a 12-year, interest-only loan on part of the 968,000 square foot Queens Center mall in New York, according to a term sheet.  Author:  Al Yoon; Source:  The Wall Street Journal.

BASEL COMMITTEE 2012 – RISK DATA AGGREGATION.   The key principles of the June 2012 paper from the Basel Committee on Banking Supervision entitled ‘Principles for Effective Risk Data Aggregation and Risk Reporting’ marks out a new era in how banks need to think about information technology and data architectures in the context of risk aggregation.  Source:  Company.  ClusterSeven Ltd.

CAP RATE COMPRESSION:  A HARBINGER FORMING FOR REIT INVESTORS? It is clear to see that REITs today are benefiting from historically low interest rates and that has fueled their growth over the past several years. This growth has also resulted in general improvement in payout ratios, dividends paid, and financial positions across most of the spectrum of REITs.  Author:  Brad Thomas.  Source:  Seeking Alpha.

EXCLUSIVE:  TREASURY REJECTS U.S. CENTURY BANK REQUESTS FOR $45M TARP DISCOUNT.  The U.S. Department of the Treasury has rejected a request by U.S. Century Bank and proposed acquirer C1 Bank for a 90 percent discount on repaying taxpayer funds from the Troubled Asset Relief Program (TARP), according to documents obtained by the Business Journal.  That amount of a discount would have been a record setter for TARP repayments by a bank that didn’t fail.  Author:  Brian Bandell,  Source:  South Florida Business Journal.

INDUSTRY VETERANS FIND OPPORTUNITIES IN PRIVATE EQUITY.  As private equity interest in the restaurant sector has revved up, so too has the practice of firms hiring those executives who have worked in the trenches and know the ins and outs of the food service business. Not only can restaurant industry veterans bring their operational expertise to assessing investment opportunities, but they also have long relationships that can help in luring top talent to future management teams and industry insight that can translate to a healthy pipeline of deals.  Author:  Robin Lee Allen, Source:  Nation’s Restaurant News.

IMPACT OF FDIC INSURANCE EXPIRATION.  At year-end, unlimited FDIC insurance on non-interest bearing bank deposits will expire. Congress did not address requests for an extension of this program while in session, and it’s unlikely that Congress will take up this issue during lame-duck sessions. On January 1, 2013 – literally overnight – corporate treasurers will face the question of what to do with hundreds of billions of dollars in deposits that are no longer fully guaranteed by the government.  Author, not listed; Source:  Treasure Strategies.

UNDERSTANDING OTC MARGIN REQUIREMENTS.  Corporate end users of OTC derivatives most commonly trade the financial instruments to manage their balance sheet liabilities and cash flows, in addition to hedging interest rate and exchange rate risks. Interest rate derivatives comprise approximately 80% of all OTC derivative transactions, with FX derivatives billed as the second largest category.  Author:  Daniel Flatt, Source:  The Corporate Treasurer.

UNHAPPY ANNIVERSARY: DODD-FRANK HITS THE TERRIBLE TWOS. This week marks the second anniversary of the Dodd–Frank Wall Street Reform and Consumer Protection Act. There is nothing to celebrate. With every new rule concocted by one of the 11 federal agencies involved, the flaws of the statute and its injurious costs to consumers have become glaringly, painfully apparent. Congress should devote Year Three of Dodd–Frank to remedies.  Author:  Diane Katz, Source:  The Heritage Foundation.

EMERGING TRENDS REPORT:  “RECOVERY ANCHORED IN UNCERTAINTY” IN 2013. Commercial real estate’s slow recovery will continue in 2013, according to the Emerging Trends in Real Estate 2013 report released today by PwC and the Urban Land Institute at the ULI Fall Conference taking place in Denver.  The report, generated by surveys and interviews with 900 real estate investors, developers, service providers and lenders, shows expectations that trends that have materialized in recent years will continue in 2013.   Author:  David Bodamer, Source:  National Real Estate Investor.

THE COMING STORM: $2 TRILLION IN CRE LOAN MATURITY PRESENTS THE NEXT FISCAL CLIFF.  While a majority of America is keenly aware of the housing bubble, and at least somewhat familiar with the unraveling of the European Markets, little energy is being focused on what may very well be the nation’s next looming fiscal crisis:  the large volume of commercial real estate debt maturing over the next seven years.  Author:  Nicholas Coburn, Source:  National Real Estate Investor.

REGULATORY COMPLIANCE BIGGEST CHALLENGE FOR FLORIDA COMMUNITY BANKS, CREDIT UNIONS.  Florida community banks and credit unions said regulatory compliance was their biggest obstacle, even greater than economic problems, according to a survey by the Florida Chamber of Commerce and Florida CFO Jeff Atwater.

DODD-FRANK MISSED AN OPPORTUNITY TO TRULY REFORM DERIVATIVES.  Title VII of the Dodd Frank Act, much of which will take effect next month, requires over-the-counter derivatives to trade through central counter-parties.  Author:  Aron Gottesman, Source:  American Banker.

GOLDMAN SACHS ANALYSTS SAY BANK SLOWDOWN ISN’T TEMPORARY.  New bank regulations and capital requirements are “structural” changes to the industry that are more to blame for declining profits than the US economic slump, Goldman Sachs Group Inc. (GS) analysts said.  Authors:  Christine Harper and Donal Griffin, Source:  Bloomberg.

PROPOSED NEW RULES ON MORTGAGE LOAN OFFICER COMPENSATION AND OTHER REGULATION Z CHANGES FROM THE CFPB.  On August 17, 2012, the Consumer Financial Protection Bureau published additional proposed changes to Regulation Z to implement portions of Dodd Frank.  Author:  Not Listed, Source:  TriNovus.

TALKING POINT:  PRIVATE EQUITY IN LATIN AMERICA – OUTLOOK FOR 2012.  How would you describe recent deal activity involving private equity firms in Latin America?  Authors:  Jose Setti Diaz, Daniel Serventi, Christopher Mann, Source:  Financier Worldwide.

TALKING POINT:  SECONDARY BUYOUTS IN TODAY’S MARKET.  How would you describe secondary buyout activity over the last 12 months or so?  What notable deals have you seen in this space?  Authors:  Richard J. Welch, James Goold, Manuel Carvalho, Source:  Financier Worldwide.

TALKING POINT:  PRIVATE EQUITY PORTFOLIO COMPANY VALUATIONS.  Why are regulators now focusing more attention on private equity portfolio valuations?  Authors:  Charles Lundelius, Mike Ryan, Michael Athanason, Source:  Financier Worldwide.

NO LOANS FOR TENANTS IN COMMON…UNLESS YOU PLAY BY THE NEW RULEBOOK.  A couple of weeks back, I went to a commercial real estate finance symposium in Dallas hosted by the Bisnow daily newsletter.  There were two guest panels, a debt panel and an equity panel….The debt panel consisted of two CMBS conduit lenders, a bridge lender, a life insurance lender, and an agency lender.  Author:  Sunny Sajnani, Source:  Metropolitan Capital Advisors.

BAUER BOOSTS RATINGS FOR BANK OF AMERICA, SUNTRUST AND THREE MIAMI BANKS.  Bauer Financial upgraded its ratings for Bank of America and SunTrust Banks, two of the largest banks in South Florida, as well as three Miami-based banks that were boosted to the highest possible rating.  Author:  Brian Bandell.  Source:  South Florida Business Journal.

BREAKING DOWN BASEL III.  Federal regulators sent a shockwave through the community banking industry when they recently released proposed rules to implement Basel II regulatory capital standards.  Author:  James Kendrick.  Source:  Independent Banker.

FROM THE ANALYST CHAIR: ANTICIPATE THE ROAD BLOCKS IN COMMERCIAL REAL ESTATE FINANCE.  The process of obtaining capital can prove challenging and time-consuming regardless of whether it is a simple refinance or persuading an equity source on the viability of a new ground-up project.  Author:  Gabe Gonzalez.  Source:  Metropolitan Capital Advisors.

AUTOMATING THE BANK’S BACK OFFICE.  The dream of achieving rapid, large-scale process automation is becoming a reality for some banks.  Competitors cannot afford to miss the opportunity to transform their own back-office processes.  Source:  McKinsey Quarterly.

FDIC UPDATES STRESS TESTING IMPLEMENTATION TIMELINE FOR LARGE BANKS.  The FDIC announced on August 27, 2012 that it is considering changes to the implementation timeline for the annual capital-adequacy stress tests required by section 165(i)(2) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  The changes under consideration would delay implementation until September 2013 for covered institutions with total consolidated assets between $10 billion and #50 billion.

INVESTMENT BANKING:  FACTS AND ADVICE.  A good time to send your resume to an investment bank is in November and December.  Source:

THE CMBS MARKET HAS WEATHERED THE SUMMER’S ECONOMIC STORMS.  Although the industry has experienced some turbulence this year, it was lucky enough to avoid a crash like it went through last summer due to the European debt crisis and the drama surrounding the US debt ceiling.  Author:  Jennifer Popovec.  Source:  National Real Estate Investor.

THE PROFITABILITY REPORT: HOW TO PROTECT YOUR MARGINS IN A DOWNTURN.  Given the barrage of bad economic news over the past 18 months, you would think that the profit margins of US companies would have withered away to nearly nothing.  But though it’s true that bottom lines have been hammered over the course of the recession, something promising has begun to happen:  Profit margins are ticking back up.  Source:

TAKING A LONGER-TERM LOOK AT M&A VALUE CREATION.  Companies that do many small deals can outperform their peers-if they have the right skills.  But they need more than skill to succeed in large deals.  Source:  McKinsey Quarterly.

TAPPING THE NEXT BIG THING IN EMERGING-MARKET BANKING.  Lending to micro-, small, and medium-sized enterprises looks particularly attractive.  Here’s how to overcome the traditional risks in reaching this market.  Source:  McKinsey Quarterly.










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