Live Oak Bank expands to new lending niche, tops ‘best’ list again

Live Oak Bank, which has just been recognized by American Banker as the best bank to work for, is taking root in an additional lending niche.

The Wilmington-based bank announced this week that it will begin offering SBA-guaranteed loans to independent insurance agents. This expansion brings to 11 the number of industries within which Live Oak lends.

The bank invests significant time in understanding an industry and its need prior to entering a new industry. We saw a need for financing in this space, Kay Anderson, general manager of emerging markets for Live Oak, said in a news release.

When it adds a new niche, Live Oak brings in a person with extensive experience in that industry to head up the new team. Mike Strakhov, a career insurance professional, will lead the new division. Strakhov, who moved to Wilmington in mid-July from Columbus, Ohio, has nearly three decades of experience in the industry.

Before joining Live Oak, Strakhov served as branch vice president of CNA Insurance Companies for the state of Ohio, according to a news release from the bank. His career also included tenure with Chubb Group of Insurance Companies and First Niagara Risk Management.

Strakhov said Thursday that his experience with a large insurance carrier as well as an individual agency has given him a comprehensive view of how the industry functions.

With that combined experience, what the bank has asked me to do is to provide insights about the industry and how various aspects of it work; what would be very good, and what might be red flags, he said.

The new division leader anticipates building a launch team of four to five people. Thus far, he has hired a senior loan officer, he said.

Anderson said Strakhovs significant contacts within the insurance industry will be a key resource as Live Oak enters the market.

With Mikes industry knowledge and leadership, we will focus on strategic partnerships and educating the industry on our lending programs to achieve success in this market, she said in the release.

Company spokesman Micah Davis said that bringing in an industry expert is one way Live Oak is smarter in how we go to market; not wasting time.

What you learn from a person who knows the industry landscape helps us be relevant and solve problems, Davis said Wednesday.

Meanwhile, the fast-growing bank was pleased to note that it again topped American Bankers list of best banks to work for. The bank was number one in 2014 as well.

Chip [Mahan, chairman and CEO] and Neil [Underwood, president] want to build a company people are proud to come to work for every day, Davis said. We love what we do and we have a good time.

The banks focus on lending and the development of technology to make that lending process more efficient improves the experience for borrowers, he added.

Michelle Singletary: Readers disagree with stance on student credit cards

Others disagree when I encourage families not to borrow for college.

And, man, do I get a lot of email when I recommend that college students, especially freshmen, not have credit cards.

I value this feedback, so I created the Color of Money Talk Back feature, in which folks provide counterarguments to something Ive written.

I disagree with the idea that credit cards arent important for college students, wrote Sallie of Freeport, Maine. Perhaps if they are going to college near home, that is true. But even for them, I think (credit cards) are good. They provide a safety net.

Lets stop right here.

We should not be teaching young adults that credit is a safety net. Cash is their saving grace. Of course, at some point, having good credit will matter – but not in their formative financial years.

Sallie provided an example of when a credit card could be needed.

What if something happens to their parents? she asked. How do they (the students) get home?

OK, theres a possibility that both parents could become incapacitated. But how about teaching our adult children to be more resourceful than immediately turning to credit in a crisis? If such a situation occurred, they may have to call upon help from other relatives who have the ability to pay for a train or plane ticket. And hopefully the parents have done some estate planning so that there is an individual who is authorized to access funds that could be used to bring a child home.

A grandchild of mine had her computer destroyed in the middle of final papers, she argued. How to get a new one quickly?

My daughter is a rising junior in college and she is as tethered to her computer as she is to her smartphone. So I get that a broke computer is a big deal. But colleges have computer labs. Libraries have computers. On a college campus, plenty of other students have computers. Again, lets be wary of scaring young adults into thinking credit is their only choice when things happen.

Sallie also advocated a credit-building strategy that I wholeheartedly discourage.

I gave my children, and now give my grandchildren, a credit card on my American Express (account), she wrote.

Hold on here! Do you fully understand what it means to add someone on your credit card as an authorized user?

This person can benefit from your good credit habits, such as low credit balances and on-time payments. But the reverse is also true. If the primary cardholder doesnt pay the bill on time, that bad history could be reported as well. And an account holder who bumps up against the maximum credit limit could also work against everyone else using the card. Additionally, the strategy of boosting anothers credit may not work. Not all credit lenders report the account history to an added users credit file. However, my biggest issue with adding someone to your card is the fact that they have no obligation to pay the bill.

Sallie said her grandchildren understand that the card is for emergencies and use it as such with periodic other uses for which they have been good about paying me back. Their parents pay me back the other (times), as was the case with the broken computer. Another good thing about this is that I, of course, in getting the bill, get to see what they have used it for.

So a card that was supposed to be only used for emergencies is in fact used for other purchases. That slope is getting slippery.

Heres something else to consider. A recent report of 42,000 first-year college students and how they behave financially found that among the many things they had to deal with in college, they felt the least prepared to manage their money.

And how did they become more confident?

It wasnt by using credit.

Feeling prepared to manage money in college was not related to a students experience with credit cards – it actually decreased as they got cards earlier in life, according to the Money Matters on Campus report by EverFi, an education technology company, and Higher One, which partners with colleges and universities to lower administrative costs.

It was experience with managing a bank account that was key in developing independent financial skills, the report said.

Students should master using cash – even a debit card – long before graduating to MasterCard or Visa. Yes, it may take years to build up exceptional credit. But it only takes a short time of mismanagement to damage it.

Michelle Singletary can be contacted at:

[emailprotected]

Twitter: SingletaryM

Finance Professional Show 2015 Sponsors announced

The first wave of sponsors for this years Finance Professional Show has now been confirmed.

Shawbrook Bank, Everline, Just Bridging Loans Ltd, Brightstar Financial, Funding Circle, Blemain Group, and Dragonfly Property Finance have all pledged their support for the third Finance Professional Show being held at Olympia, London on 4th November.

These names join over 80 other exhibitors at the almost sold-out event, which saw 1,600 visitors through its doors in 2014.

Mark Posniak, Head of Sales and Marketing for Dragonfly Property Finance, said: After the successful and action-packed 2014 show, we were always going to support the 2015 one it is one of the key dates in the Dragonfly calendar and a fantastic chance to meet old acquaintances and make new ones. This is a trade event that brings brokers and finance providers together in a uniquely productive way and we would advise all intermediaries to come along and experience it first hand in November.

Also commenting on the event, Karen Bennett, Sales and Marketing Director, Commercial Mortgages, Shawbrook Bank, said: Shawbrooks sponsorship of one of the flagship events in the industry calendar continues for a very good reason. It is a highly educational day touching on issues affecting professional intermediaries and their clients across the lending spectrum.

CEO of Brightstar Financial Rob Jupp has reaped the rewards of exhibiting last year. The FP show was a huge success for us last year. We met some very serious commercial finance brokers who have since become very good introducers to us. Similarly we met a good number of brokers interested in bridging, second charge loans and those just starting to explore the specialist finance arena.

Hinting at an important announcement being made prior to the Finance Professional Show, Blemain Groups Sales Director, Gary Bailey, said: Its a great opportunity for lenders and intermediaries to come together and share insights and news, as well as driving business, and has quickly become established as an important fixture on the financial industry calendar.

Blemain Group will have some exciting news to sharehellip;which we hope will be warmly welcomed by our peers.

New to the Finance Professional Show, Everline which was recently acquired by business lender ezbob is excited to be supporting the event. Chief Operating Offer Russell Gould said:

Earlier this year, at the NACFB Expo in Birmingham, we announced the rebrand of our intermediary channel to Everline. Following the success of the rebrand and genuine interest at the earlier show I am delighted that Everline will be one of the main sponsors at this years Finance Professional show.

John Davies of Just Bridging Loan Ltd commented: The Finance Professional Show allows us to turbocharge our lsquo;education efforts as it brings all the key financial players together under one roof. We will be able to demonstrate how we arent just lending on the value of properties; our underwriting decisions are based on the property professionals business model.

Second-time sponsors Funding Circle is looking forward to updating introducers new and old on recent developments within the leading P2P lenders processes. Laura McMullen, Business Development Director at Funding Circle, commented: We hope this year will be as successful as the last. Since last year, Funding Circle has made a number of improvements including a new application system specifically for our introducers, and a new risk band, meaning we can help even more businesses access finance.

Organised by the team behind the annual Commercial Finance Expo at the NEC in Birmingham, the Finance Professional Show secures a varied and relevant range of exhibitors, from high street banks to commercial lenders and specialist asset-based and short-term finance providers. This, coupled with a strong conference programme, the NACFB AGM and impressive visitor numbers, makes the Finance Professional Show one not to be missed.

Further sponsorship opportunities are available to book for more info, please contact rachel@thefpshow.co.uk.

Better Small-Business Lending Data Could Tell Us a Lot About the Economy

New data on small-business lending could show a prospective entrepreneur which banks have the best track record of lending to female and minority business owners.

They could show lenders how they stack up against their competitors, and encourage them to rethink their lending strategies. And they could give important clues to regulators and community advocates about local and regional trends in small-business lending across the country, and its impact on the economy.

The only problem: The data isn’t collected or published anywhere.

The 2010 Dodd-Frank law required lenders to start providing better data about the loans they make to small businesses, including the race and gender of business owners, the businesses revenue and whether the lender approved or rejected loans. But the agency tasked with enforcing the requirement, the Consumer Financial Protection Bureau, hasn’t written a rule to enforce it yet.

Though lenders already report detailed data on mortgage borrowers–including their race, gender, ethnicity and income level-there is no such requirement for small-business loans, and the available data is limited.

Community-lending advocates argue the lack of information is hampering access to credit–especially for disadvantaged borrowers–at a time when the economy could use the boost that small-business creation and expansion provides.

Parkside Lending launches super-low down payment jumbo mortgage

Parkside Lending expanded its jumbo product offerings to go to 95% LTV without mortgage insurance as demand for jumbo mortgages grows in the market.

The San Francisco-based wholesale and correspondent lender created the new offering to help creditworthy borrowers with a down payment or equity as low as 5% fit into a traditional jumbo loan.

We believe our new Jumbo loan offering is an important financing alternative for a specific segment of creditworthy borrowers, said James Lamparter, executive vice president of sales at Parkside Lending. We continue to grow our Jumbo product line as we identify different needs in the marketplace.

Parkside noted that it will go to 95% LTV/CLTV on loan amounts up to $1 million withoutmortgage insurance on a 1 unit, owner occupied purchase or rate and term refinance.

Features of the product include:

  • An alternative to high balance loans (minimum loan amount: $417,001)
  • 740 minimum credit score
  • 24 months reserves (borrowers own funds)
  • 35% maximum DTI
  • Minimum down payment of 5% (borrowers own funds)

Parkside Lending also offers jumbo loans on non-owner occupied transactions, and will go to 65% LTV/CLTV, 1-4 units.

This isnt the first step the lender has taken this year to better supports its clients. Back in May, itannounced that it would begin offering Federal Housing Administration-backed mortgages.

Jumbo loan demand has beensteadily growing, with the Mortgage Bankers Associationreporting in April that applications for some jumbo loan sizes increased in 2014, mainly in the $417,000 to $625,000 range and in the greater than $729,000 range.

Earlier this month, Chase, the US consumer and commercial banking business ofJPMorgan Chase(JPM), similarly changed the requirements on its jumbo loan products to better match its peers in the market. A buyer with a FICO of 680 or higher looking to purchase a single-family property can now put as little as 15% down.

ABA to NCUA: CU Business Lending Proposal Is Risky

ABA today registered its opposition to the National Credit Union Administration’s aggressive proposal to expand business lending by credit unions. ABA noted that the proposal would allow CUs to circumvent caps on business lending imposed by Congress while simultaneously weakening the safety and soundness of credit unions.

In particular, NCUA would evade the statutory 12.25 percent cap on member business loans by excluding non-member business loans and loan participations among credit unions from its business loan limits. “If Congress intended to allow the NCUA Board to exclude forms of business loans from the MBL cap, it would have articulated this in Section 107A of the FCU Act — but it did not,” ABA said. “NCUA is overstepping its authorities in excluding NMBLs from the MBL cap.”

By allowing an aggressive expansion of business lending among credit unions, ABA warned, NCUA would elevate the risk of failures and share insurance fund losses — both due to credit unions inexperienced with making commercial loans and to NCUA’s unproven ability to supervise these loans. “At least five credit unions since 2010 have failed at the hands of poorly run business loan programs, accounting for a quarter of all losses to the insurance fund during that period,” ABA added. “Losses could quickly multiply under this proposed rule.”

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Contact KY3: Best credit cards for college students

These are NerdWallets top picks for the best student credit cards.

  • Create your own rules to ensure a good credit history.

Put a maximum dollar limit on it. Maybe a ceiling limit of five-hundred dollars or one-thousand dollars to avoid those unexpected splurge spending that students can go out on. That will protect the student and even the parents a little bit, said Joe Allen Stokes, with Consumer Credit Counseling Service.

  • Money experts say dont bank on student loans to fully support a college career.

With a credit card, you got to address that within thirty to sixty days. You cant let it ride for four years, said Stokes.

  • A rewards card is only beneficial if you pay your bills off every month.
  • If you carry a balance, dont bother with rewards, look for the low interest rate.
  • Thanks to new consumer protection laws, many credit card companies require co-signers, like parents, if the student doesnt work. There are also new marketing restrictions on college campuses. This way students are not bombarded with offers and perks

Close Brothers Group plc Receives Average Recommendation of "Buy" from …

Shares of Close Brothers Group plc (LON:CBG) have received a consensus rating of Buy from the ten research firms that are currently covering the firm, MarketBeat reports. Five equities research analysts have rated the stock with a hold recommendation and five have assigned a buy recommendation to the company. The average 1 year target price among analysts that have issued a report on the stock in the last year is GBX 1,692.33 ($26.48).

Shares of Close Brothers Group plc (LON:CBG) traded down 1.38% during trading on Monday, hitting GBX 1430.00. The stock had a trading volume of 377,120 shares. Close Brothers Group plc has a 12-month low of GBX 1,284.75 and a 12-month high of GBX 1,857.39. The firms market cap is GBX 2.11 billion. The stock has a 50-day moving average of GBX 1,481.51 and a 200 day moving average of GBX 1,557.41.

Several analysts recently commented on the company. Barclays increased their price target on Close Brothers Group plc from GBX 1,550 ($24.25) to GBX 1,650 ($25.82) and gave the company an overweight rating in a research note on Friday, July 31st. JPMorgan Chase Co. reissued an overweight rating and set a GBX 1,780 ($27.85) price objective on shares of Close Brothers Group plc in a research note on Monday, July 27th. Shore Capital reaffirmed a hold rating on shares of Close Brothers Group plc in a research report on Friday, July 24th. Canaccord Genuity reiterated a buy rating and set a GBX 1,844 ($28.85) price objective on shares of Close Brothers Group plc in a report on Friday, July 24th. Finally, Panmure Gordon restated a hold rating and set a GBX 1,650 ($25.82) target price on shares of Close Brothers Group plc in a report on Friday, July 24th.

Close Brothers Group plc (LON:CBG) is a United Kingdom-based merchant banking group providing lending, deposit taking, wealth management services and securities trading. The company operates through three divisions: Banking division, providing lending activities including asset finance, aviation marine, broker finance, insurance premium finance, leasing, professional services finance, asset-based lending, brewery rentals, commercial vehicle rentals, invoice finance, motor finance and property finance; Securities division, providing trading services through Winterflood Securities, Winterflood Business Services, Winterflood Investment Trusts and Close Brothers Seydler Bank AG, and Asset Management division providing a range of financial advice, investment management and on-line investing services which include Bespoke Investment Management, Financial Advice and Planning, Services for Professional Advisers, Employee Benefits Solutions and Self Directed Service.

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Fitch Affirms Ahli United Bank (UK) PLC at ‘BBB+’; Outlook Stable

AUBUKs company profile constrains the VR, reflecting the banks limited franchise and relatively small size, particularly in view of its focus on the UK property market. The banks long track record as a specialist property finance lender, with its residential mortgage loan portfolio (85% of loans) concentrated in prime central London, partly mitigates the risks. Its commercial property loan exposure is spread across the UK.

The VR also reflects AUBUKs healthy capitalisation and liquidity and its experienced management team. AUBUKs asset quality is sound, although a large part of residential mortgage loans are granted on an interest-only basis. Average loan-to-values and loan tenors in the residential book are conservative.

The bank is also exposed to an inherently volatile UK commercial real estate market, although the exposure represents 100% of equity. AUBUKs liquidity buffers are strong, but also a necessity given its highly concentrated deposit base. Nonetheless, Fitch expects the largest deposits, which are mainly from the Gulf region, to remain fairly stable and the bank has demonstrated its ability to manage large deposit swings.

Profitability continued to improve in 1H15, but business generation has slowed, because of the banks conservatism regarding the sustainability of high property values in central London. Furthermore, rising regulatory costs, mainly relating to strengthening compliance and audit functions as required by the UK regulator, limit performance growth.

RATING SENSITIVITIES-IDRS AND SUPPORT RATING

AUBUKs IDRs and Support Rating are sensitive to a change in Fitchs assumptions around the probability of support that would be forthcoming from AUB and ultimately from PIfSS if required. If AUBUK is no longer considered a core subsidiary of AUB, this would likely cause a downgrade of its IDR. A rating action on AUBs IDRs is likely to be reflected in a corresponding change in AUBUKs ratings.

RATING SENSITIVITIES-VR

The banks VR is sensitive to significant price corrections in the UK property market, which could lead to deteriorating asset quality and eroding capital through higher loan impairment charges.

An upgrade of the VR is unlikely unless AUBUK significantly diversifies its franchise, which is unlikely given the banks focus and links to the Gulf region.

The rating actions are as follows:

Long-term IDR affirmed at BBB+; Outlook Stable

Short-term IDR affirmed at F2

Support Rating affirmed at 2

Viability Rating affirmed at bbb-

-Ends-

Contact:
Primary Analyst
Mahin Dissanayake
Director
+44 203 530 1618
Fitch Ratings Limited
30 North Colonnade
London E14 5GN

Secondary Analyst
Andrew Parkinson
Associate Director
+44 203 530 1420

Committee Chairperson
Gordon Scott
Managing Director
+44 203 530 1075

Media Relations: Elaine Bailey, London, Tel: +44 203 530 1153, Email: elaine.bailey@fitchratings.com.

Additional information is available on www.fitchratings.com.

copy; Press Release 2015

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