Bank News

• Encore Expands Lending Deal to $300 Million
  Debt purchaser and collector Encore Capital Group (Nasdaq: ECPG) yesterday reported it had expanded the size of its lending agreement to $230 million with an additional $70 million in availability.According to Encore’s filing with the U.S. Securities and Exchange Commission, its amended lending agreement now covers the following:JPMorgan Chase with $47.5 million available,Bank of America $42.5 million,Bank of Scotland $35 million,California Bank and Trust $30 million,Guaranty Bank $20 million,First Bank $20 million,Citibank $15 million,Bank Leumi $12.5 million,Manufacturers Bank $7.5 million Chase also acts as the administrative agent of the lending agreement.
• PR - "Delinquency Budget" to Rise, So Banks Plan to Spend More on Collections: Survey
  Online Resources Corporation (Nasdaq:ORCC), a leading provider of web-based financial services, released recently the results of a survey of U.S. households and billers regarding the effect of the current mortgage crisis on bill payment and collection patterns. The survey shows that fallout from the mortgage sector is spilling over into the broader economy, impacting companies across industries and their ability to collect payments.The survey of more than 1,000 nationally representative U.S. households finds that Americans are increasingly being forced to prioritize among their bills by creating a “delinquency budget” to determine which bills get paid. While the mortgage bill tends to be the one that households are most likely to pay, businesses across other industries are facing a decreasing share of that delinquency budget. Specific findings include: One out of four households report being delinquent on at least one bill, by 30 days or more; If forced to chose between which bills to pay, 98 percent of households would likely pay their mortgage first; while Credit card, phone, healthcare, utility and loan payments are among the groups of bills that are least likely to be paid. Online Resources also surveyed a cross-section of clients from its 2000+ strong biller end-point network of banks, credit unions, utilities, healthcare companies, card issuers, receivables management and mortgage companies. A majority of the respondents (across all industries with annual revenues ranging from less than $1 million to more than $20 billion), reported feeling a negative impact from the consumer credit crunch already. Only two percent expect it to be easier to collect payments in 2008, and 84 percent expect to spend more on collections in 2008.A key finding of both surveys is that billers are out of sync with how consumers would prefer to resolve their delinquencies. The majority of consumers prefer the web channel for making delinquent payments, due to its convenient and non-confrontational nature. However, only eight percent of billers offer online collections services that go beyond accepting payments that would allow consumers to resolve their delinquency.Prior Online Resources studies show that the web channel is highly effective in increasing collections and in engaging otherwise unreachable delinquent account holders. Production results from a top three U.S. card issuer’s use of the web channel delivered annual savings of over $3 million for each $50 million of delinquent debt. In addition, a significant number of late stage delinquent account holders that were previously unreachable by phone accessed the collections website and made payments on their accounts.“The web channel is playing an increasingly important role in consumers’ financial lives, and it is natural that they would gravitate to the web when they are late on their bill payments, to conveniently and privately resolve what might be an otherwise embarrassing situation,” said Edward Woods, Sr. Analyst for Celent Group, LLC. “As consumers’ payment woes spread further outside the subprime sector, it will be increasingly important for billers to look at consumers’ proven behavior patterns around use of the Internet for bill payments and delinquency resolution.”
• Executive Change: Synovus Moves Execs to TSYS
  Synovus (NYSE: SNV), the Columbus, Georgia-based financial services company, recently announced the following executive changes related to the upcoming spin-off of TSYS. G. Sanders Griffith III, Synovus Senior Executive Vice President, General Counsel and Secretary, wil transition to TSYS to serve as Senior Executive Vice President, General Counsel and Secretary. Paul M. Todd, Synovus Executive Vice President, has been named Executive Vice President of Mergers and Acquisitions for TSYS. J. Barton Singleton, President of Synovus Securities, has been promoted to Executive Vice President, Synovus Financial Management Services, the position previously held by Todd. “Moving into these key roles at TSYS is a great opportunity for Sanders and Paul, and I am sure their leadership will be instrumental in the company’s future success. They have certainly demonstrated their value throughout their long service to our company. We are proud of them and wish them well,” said Richard Anthony, Chairman and CEO of Synovus. Referring to Singleton, Anthony added, “We are fortunate to have someone with Bart’s experience and capabilities to assume the challenge of guiding the growth and profitability of our mortgage, insurance, trust, securities and Family Asset Management lines of business.” Griffith began his career at Synovus in 1988 as Vice President and General Counsel. He was promoted to Executive Vice President, General Counsel and Secretary in 1992 and Senior Executive Vice President in 1995. His responsibilities also included directing the governmental and regulatory affairs for both Synovus and TSYS. Todd will be returning to TSYS, where he began his career with the Synovus family of companies in 1995 and served in various capacities in the Finance and Strategy areas. In May 2002, he moved to Synovus Finance where he led the area responsible for mergers and acquisitions. He became the Chief Financial Officer for FMS in 2003 and then Chief Operating Officer in 2005. Todd was promoted to Synovus Executive Vice President in March 2007. Before coming to Synovus, Singleton spent 16 years at SouthTrust Securities in various roles, including Manager of the Capital Markets Group and as a member of the board of directors. He joined Synovus Securities in August 2005 and has served as a Senior Vice President and Manager of the Investment Banking and Institutional Brokerage Groups.
• Credit Card Delinquencies and Charge-Offs Soaring: AP Study
  U.S. consumers have been falling behind on credit card payments in the last year, prompting double-digit growth in the percentage of delinquent and charged-off accounts over that time period, according to an analysis from the Associated Press. The largest growth was in accounts that are 90 days or more late in payments which could mean that the worst is still to come, say some experts. The AP examined credit card trusts from 17 large credit card issuers and compared the numbers from October 2006 to October of this year. The accounts covered in the analysis make up about 45 percent of all outstanding credit card accounts in the country. The news organization found that the value of credit card accounts that were at least 30 days late in payments jumped 26 percent in the period. The total value of these delinquent accounts was $17.3 billion. Charge-offs rose 18 percent to a total of $961 million. Anecdotal evidence from the AP showed that a handful of large issuers – including Advanta, GE Money and HSBC – reported increases of more than 50 percent in accounts that are 90 days or more delinquent. Other card issuers named in the study include Bank of America, JPMorgan Chase, Capital One, American Express and Discover Financial. Retailer-branded private label cards from Wal-Mart, Home Depot, Lowe’s, Target and Circuit City were also covered. JPMorgan Chase was the only issuer to buck the trend, with its trust showing a decline in delinquencies and charge-offs from October 2006 to October 2007. Mark Zandi, chief economist of Moody's Economy.com, told the AP that the mortgage meltdown and subsequent crunch in real estate values is a main driver for the poor card performance, and that the problems would continue. "