WASHINGTON Direct Loan Program Comes Under Fire Bankers gained an ally in their fight for the student lending market as Rep. Bart Gordon, D-Tenn., said the administration's plan to lend directly to students will result in costly defaults. If the government takes over the student lending market, it will incur much greater costs than administration officials have admitted, Rep. Gordon said.

April 10

19772

Comptroller of the Currency Eugene A. Ludwig announced the formation of a National Credit Committee to keep tabs on examiners at the largest banks. "We are determined never again to let a small group of outliers damage the safety and soundness or reputation of the entire industry," Mr. Ludwig said.

April 10

19770

Taking a first legislative crack at the issue, Rep. John J. LaFalce D- N.Y. has proposed 12 ways to fix the insurance fund backing thrift deposits. "In my view, the right one is one which can garner substantial bipartisan support in the near term," Rep. LaFalce said.

April 11

18127 REGIONAL BANKING SunTrust, Synovus, Hibernia Post Gains SunTrust Banks Inc. posted earnings of $136 million for the first quarter, up 7%. But its net interest margin dropped, largely because of tough competition in deposit pricing and adjustable-rate mortgages. Synovus Financial reported a 17.9% jump in first-quarter revenue, to $24.1 million, while Hibernia Corp.'s earnings improved 14%, to $26.4 million.

April 13

18206

Citibank is planning to open a representative office in Tel Aviv and has scheduled a return to Beirut for later this year. Citicorp vice chairman William Rhodes said peace between Israel and its Arab neighbors will lead to growing economic opportunities in the Middle East.

April 10

19735

Centura Banks Inc. reported strong loan growth in the first quarter, but its net interest margin dropped as deposit costs rose. Centura, one of the first banks to report this quarter, said it earned $13.9 million in the period ended March 31, a gain of 32%. Centura's earnings per share of 67 cents were in line with consensus estimates.

April 10

19734 COMMUNITY BANKING Used Commercials Get a Fresh Spin Seeking to save money on high-priced advertising costs, community banks are increasingly turning to commercial syndication, taking tried-and-true advertising campaigns from banks in one part of the country and applying them in their own little world.

April 12

18150

First State Bank, a $17 million-asset institution in Tabor, Iowa, last month became the first Iowa bank to sign up with the Midwest Independent Bank, a bankers' bank in Jefferson City, Mo. By choosing Midwest Independent, First State joined a growing trend toward using bankers' banks instead of large regionals for correspondent banking needs.

April 11

18111

Fending off a broad array of rivals, the top 50 agricultural banks boosted their lending markedly last year. The banks increased their holdings of agricultural loans by more than 11%, well ahead of the 7% growth in such loans posted by the banking industry as a whole, an American Banker survey reported.

April 10

19745 SMALL BUSINESS St. Louis Becomes Hub for SBALoans The sale of ITT Small Business Finance to General Electric Capital Corp. has suddenly turned St. Louis into a hub for lending backed by the Small Business Administration. With the March 31 sale of St. Louis-based ITT, both GE Capital and Salt Lake City-based Zions Bancorp announced they would operate their national SBA lending activities out of St. Louis.

April 11

18092

Many bankers face increasing competition from factoring companies like Baltimore-based Reservoir Capital Corp., a small shop that specializes in niche financing. Starting with just three employees in 1991, the firm has grown to 14 employees and is buying $12 million to $15 million of new assets every month.

April 11

18093 COMPLIANCE OCC Sets Standards For New Products The Comptroller of the Currency's office has come up with three standards for judging new products that national banks want to offer. Julie Williams, the agency's chief counsel, said the standards are an attempt to prepare for bank entry into in a wide range of new products.

April 13

18201

Chase Manhattan Corp. reported a dramatic increase in mortgage lending to minorities, less than four months after a community group labeled it one of the five worst lenders in the country. Chase said it boosted home lending to minorities 270% in 1994, originating 6,578 mortgages to blacks, Hispanics, and Native Americans. That's up from 1,773 mortgages in 1993.

April 13

18202

Datasoft Corp., an Atlanta compliance software company best known for its "Reg O for Windows" product, has been acquired by Antinori Software Inc., also based in Atlanta. Antinori develops check fraud and research automation software for its 100 banking customers. Scott Fairbairn, who founded Datasoft in 1992, will become director of risk management and compliance products at Antinori.

April 13

18200 CREDIT UNIONS Groups Eye Deposits As Lending Surges There is more urgency among credit unions to lure deposits, as some institutions with money tied up in medium-term investments face a liquidity squeeze. In 1994 loans grew nearly five times faster than deposits. "For the rest of this year credit unions have to call attention to the other side of the balance sheet," said Tun Wai, chief economist for the National Association of Federal Credit Unions.

April 10

19757

Representatives of eight state trade groups are talking with the country's largest private insurer about creating a nationwide alternative to federal deposit insurance for credit unions. Private insurance would give state credit unions an alternative to the increasingly intrusive National Credit Union Administration, industry officials said.

April 10

19756 CREDIT/DEBIT/ATMs PNC Signs Partners For Credit Card Push PNC Bank Corp. has formed an alliance with First Data Corp. and Card Issuer Program Management Corp. to help propel it into the top ranks of credit card issuers. PNC will rely on First Data for processing and the management company for marketing help.

April 10

19764

Visa U.S.A. signed a five-year agreement making it the "official payment card" of the National Football League. Visa will pay $40 million, an industry source said. At the same time, MBNA America Bank won the right to issue Visa cards on behalf of each of the NFL's 30 teams over the same five-year period.

April 11

18120

Toys 'R' Us is ready to play the cobranded card game with Bank of New York Co. The card, which could be released by the fall, will offer rebates comparable to those of other retail cards. But "we like to think that ours is a little better," said John Kimmins, vice president of the toy company.

April 13

18209 INVESTMENT PRODUCTS Medium-Term CDs Are Back in Vogue

Amid this year's dramatic comeback for certificates of deposit, medium- term instruments are suddenly basking in the limelight. Banks and consumers, who had been leaning toward shorter-term CDs, are now showing a keen appetite for CDs with maturities of one to 2#1/2 years. Small time deposits in this range grew at a 25% clip in the 12 months that ended in February, according to the Federal Reserve.

April 11

18122

Dramatizing banks' difficulties in retaining top-flight money managers, three executives have fled SunTrust Banks' Orlando-based capital management unit to set up shop across the street. The exodus amounts to a major shake- up in the top ranks of the Atlanta company's SunBank Capital Management, which oversees $11.4 billion of assets.

April 13

18219

Wells Fargo & Co. and Nikko Securities are putting their jointly owned money management firm on the block. Wells Fargo Nikko Investment Advisors, with $170 billion of assets under management, is one the world's largest money managers, but it isn't expanding fast enough to satisfy senior management, a spokeswoman said.

April 13

18218 MORTGAGES Fannie Mae's Profits Rose 9% in Quarter Despite a sharp drop in loan volumes, Fannie Mae's earnings were up 9% in the first quarter, to $554.5 million. Fannie also managed to increase its earnings per share by a penny, to $2.03, over the level in the fourth quarter of last year. This was the 29th consecutive quarter in which Fannie Mae reported higher earnings, and analysts hailed it as a victory.

April 13

18193

Volume in Ginnie Maes plunged 72% in the first quarter, to about $11.8 billion. But a compilation by Mortgage Marketplace, an American Banker newsletter, showed that some big lenders significantly increased market share in the Government National Mortgage Association securities during the year. Countrywide Funding Corp. jumped to No. 1, with a share of 17.3%, up from 4.3%.

April 12

18154

Keycorp is forming a finance company to make home equity loans to people with blemished credit histories, after gutting its traditional mortgage business just weeks ago. The Keycorp move is emblematic of a flight to low quality by some large institutions as normal originations have become unprofitable.

April 11

18116 TECHNOLOGY Long Island Savings Automates Branches Long Island Savings Bank has completed a platform automation project aimed at improving service in the bank's investment and loan areas. Under a $2.5 million contract with International Business Machines Corp., the Melville, N.Y.-based bank installed 43 IBM servers and over 200 OS/2 workstations, linking 37 branches in Queens, Nassau, and Suffolk counties.

April 11

18110

In its biggest deal to date, outsourcer Fiserv Inc. said it would buy bank software firm Information Technology Inc. for $373 million in cash and stock. Fiserv officials said the pending acquisition of ITI will consist of $249 million in cash and the rest in shares of Fiserv common stock.

April 10

19730

NationsBank has resumed control of two major data centers - in Richardson, Tex., and its hometown of Charlotte, N.C. - altering a ground- breaking outsourcing agreement entered into with Perot Systems Corp. more than three years ago. Under the revised arrangement, Perot Systems' role is reduced to technical consulting and operational support.

April 11

18107 FINANCE Earnings Slump Seen For Some Big Banks After a robust 1994, the industry's first-quarter earnings reports will reflect poor performances at money-centers and rising deposit rates at regional banks, analysts predict. While some banks continued to thrive in economically attractive areas of the country, first-quarter results are expected to show that trading losses at New York banks and shrinking net interest margins at some regionals depressed earnings, as they did in the fourth quarter.

April 10

19774

Staging a comeback, the nation's 100 largest banking companies advanced 11.3% in market capitalization to a record level in the first quarter. A quarterly American Banker survey shows the aggregate market value of the largest publicly traded banking companies at an all-time high of $291.4 billion on March 31, up from $261.8 billion at yearend.

April 12

18144

Eugene A. Ludwig, the comptroller of the currency, said that credit standards are slipping and announced he was forming a panel to investigate the situation. Though some bankers warned that an overreaction by regulators could needlessly restrict credit, many agreed with Mr. Ludwig, pointing to signs of potential problems in the syndicated loan market and in the credit card business.

April 11

18125

Western Bank called off its proposed acquisition of Pacific Bank, concluding a chapter in an unusual community banking story. The proposed $54 million acquiring price equaled 120% of Pacific's book value. But Georges S. San Laurent, Western's chief executive, said he came to realize "the integration of the two banks could not be easily achieved."

April 11

18128

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.