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Execs Move, Earnings Hurt

Execs Move, Earnings HurtRecent earnings, mergers and corporate activity

April 24, 2008

By SAM GARCIA

Billions more in mortgage-related losses were reported, and a survey of bankers doesn’t offer much hope for a positive change anytime soon. Meanwhile, senior executives were shuffled at a reverse lender and a Connecticut-based bank.

Foreclosure are expected to increase, according to half of the 356 U.S. bankers surveyed in from Grant Thornton LLP’s 15th Bank Executive Survey. More than half are pessimistic about the economy this year, with 28 percent expecting an increase in residential loan losses. Reverse mortgages were offered by 19 percent, and another 18 percent plan to start offering reverse loans.

JPMorgan Chase ranked No. 2 on the Cision Index, which assesses the impact of news coverage on the 100 biggest U.S. companies. The New York-based company was commended for positioning its planned acquisition of Bear Stearns and explaining how it would benefit company shareholders.

Bank of America Corp., which was No. 8 on the index, was cited for its handling of the Countrywide Financial Corp. dealFreddie Mac and Fannie Mae, while not among the top ten, boosted their scores through extensive coverage of their potential roles in rejuvenating the mortgage industry.

“The major-media coverage we are seeing in the financial services industry demonstrates how smart corporate decisions can deliver a huge image boost — even in the toughest of times,” Cision North chief Joe Bernardo stated in the announcement.

Webster Financial Corp. President William T. Bromage will retire in June, the Waterbury, Conn.-based company announced. He will also relinquish his chief operating officer position, though he will serve as vice chairman until December.

Senior Financial Corp. has named Sarah Hulbert as its president, a press release stated. Hulbert — an author, speaker and 16-year veteran — was formerly the chairwoman of the National Reverse Mortgage Lenders Association and last worked as the director of wholesale lending for EverBank Reverse Mortgage LLC.

Ambac Financial Group Inc. reported a $1.7 billion first-quarter loss, far worse than the $0.2 billion profit it earned a year earlier, according to a filing Wednesday with the Securities and Exchange Commission. Mark-to-market losses of $1.7 billion, including $0.9 billion on collateralized-debt obligation investments tied to residential mortgage-backed securities, were blamed for much of the earnings deterioration.

Royal Bank of Scotland PLC said it will write down $12 billion and raise $24 billion to cover its exposure to U.S. mortgages.

Residential Capital LLC subsidiaries GMAC Mortgage LLC and Residential Funding Company LLC obtained a $750 million revolving credit facility from parent GMAC on April 18, an SEC filing said today. The line, from which $468 million was initially drawn, will be secured by mortgage servicing rights. The floating rate will be one-month LIBOR plus 2.00%.

Franklin Bank Corp. reported Tuesday that the American Stock Exchange approved its compliance plan submitted earlier this month and has extended the deadline to file its 10K with the SEC until June 30. The deadline for its 10-Q SEC filing was extended until July 31.

Farmers State Bank of Northern Missouri was merged into Mercantile Bank, Illinois-based parent Mercantile Bancorp Inc. announced. Farmers was acquired nearly a decade ago.

 

Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of MortgageDaily.com.

e-mail: mtgsam@aol.com

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