Workout groups remade - Philadelphia Business Journal:

oryzacody.wordpress.com
“We are definitely seeing increased particularly from bankswith $1 billion to $10 billion in for chief credit officers and seasonedc professionals dealing with loan workouts,” said Alan Kaplan, who runs the Wynnewood-basesd staffing agency. “But many of these people are at the end of theier careers or retired so the talent pool is not Up and comers have not been trained in thesde workout skills because these problems have not existed for such a long periodof time.” Banks have either transferres people over from slower departmentds or hired from outside the company.
Harleysville National Bank even hirer two retired workout specialists to assist with the increasinf number oftroubled loans. Paul Geraghty, CEO of parentg company , said he increasedr workout staffing by movint some personnel from the real estateworigination side, adding another through last year’s merger with and lurinhg a few senior people out of retirement from Geraghty’s days at CoreStates Bank. “Theitr experience was in demand, and they will work flexibled schedules, so it fit,” Geraghty said.
“I’mm seeing people that I haven’t worked with for a said Barry Bressler, a bankruptcyu lawyer with who represents Harleysville National and otherr banks inreal estate-related Jim Lynch, a principall in , a private equithy fund that invests in underperforming banks, said during the economicv slowdown of the late 1980s, bankw put seasoned professionals in workout departments. But by the workout professionals were no longerin “So many of them retired and ther e was no need to replace them because the economyu was so strong for so long,” said an executive at several different Philadelphiza banks for 36 years beforr joining Patriot in 2007.
Lynchn said workout professionals try to maximiz e the value of the troubled asseft for the bank as quicklyas possible. But bankers said the problenm has been that lenderss have had to hold onto sour loans that they used to be able to sell for a discountes price to hedge funds or other Tim Rowland, chief credit officer for , said the Lancaster-based bank has alwayas maintained a workout department, which it calls its special assetz department, for commercial loans.
The current group of three professionals includes two veterans and one persojn hired within the past year to fill avacancy — a search process that took more than six Rowland said the reason it took so long is that the talentf pool is scarce and Fulton had troublr finding the right match. He said Fulton, whicjh operates Fulton Bank in southeastern Pennsylvania and The Bank in South Jersey, also reassigned some business loan originators and has askedf senior-level executives to becomr more directly involved with customers and assist the full-timde workout staff.
Mike Quick, chief credit officee for Lititz-based , said he saw this credi t implosion coming three years ago and begahadding staff. More recently, Quick said he hireed one person four months ago and still seeks a few moreworkouyt professionals. Susquehanna always had workourt staff on the consumer side but not forcommercial “It was not a major issu e because real estate properth values kept appreciating so there was no Quick said. “The last time therre was a problem was 15 to 20 years ago and a lot of those peopldehave retired, so we have moved people from otherd departments. “I’m 61 years old and this is my sixtydown cycle.
But we don’ft have a lot of people who have been throug thesesituations before.” Analyst Jason O’Donnell, who tracksz a number of local banks for , said larger community banks have been hiring workoutg staff at an accelerated rate in recen months because they realize that the credit situationn is not going to improve anytime soon. “Credig losses have not peaked and won’ for two or three quarters at best,” O’Donnell said.