Banks for Sale – www.KeyFunds.com

“An investment in knowledge pays the best interest.”

It’s been a bloodbath in the banking sector over the last two years with only the mightiest surviving the onslaught of one of the worst economic crisis in the last 100 years. Many mammoth banks, having billion of dollars as turnover and which seemed too large to fall, bit dust in the recent crisis. Lives were lost in suicides; pink slips were passed on to workers like hot cakes and companies fell like a pack of cards.

Amongst all this turmoil, one entity in the banking sector regained its lost prestige and importance i.e. small banking institutes. Amongst the high flying balance sheets of large banks, small banks lived a quiet life, with minimal risk and small asset management. They did not pay much attention to the booming real estate market and stayed clear of errant investments.

All this and much more have resulted in the resurrection of faith in the small banks in USA. The trend is getting increasingly popular and people from different classes are investing heavily in the small banks.

Banks for Sale – www.KeyFunds.com

“An investment in knowledge pays the best interest.”

It’s been a bloodbath in the banking sector over the last two years with only the mightiest surviving the onslaught of one of the worst economic crisis in the last 100 years. Many mammoth banks, having billion of dollars as turnover and which seemed too large to fall, bit dust in the recent crisis. Lives were lost in suicides; pink slips were passed on to workers like hot cakes and companies fell like a pack of cards.

Amongst all this turmoil, one entity in the banking sector regained its lost prestige and importance i.e. small banking institutes. Amongst the high flying balance sheets of large banks, small banks lived a quiet life, with minimal risk and small asset management. They did not pay much attention to the booming real estate market and stayed clear of errant investments.

All this and much more have resulted in the resurrection of faith in the small banks in USA. The trend is getting increasingly popular and people from different classes are investing heavily in the small banks.

You can find small or medium sized banks for sale on the Internet also. Finders firm like www.KeyFunds.com & www.CreditCapitalFunding.com can easily get the banks or find the bank based on customer requirements. A typical small bank can be bought in about 4 million USD. Not only does a small bank have huge prospects for expansion but it bodes of the biggest asset i.e. small banks have public faith, which is on an all time high.

Small banks can even look for niche markets to expand and tap the current market trends. The scope for improvement and expansion rests solely on the management. Coupled by the fact that small banks do not have complicated functioning, it does not require an Einstein to run a bank. Also, small bank form a great rapport with the local community and can act as a medium for larger corporation to tap into the customer base that a small bank can avail them off. Clean Small bank with conservative leading practices has again become the ideal investment in this time.

Robin Trehan BA, MIB, MBA can be reached at www.KeyFunds.com

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An exemplar of the procedure of the clawback provision. Clawback provision will make the existing shareholders of the bank accountable for any losses incurred in the existing loan portfolio which will lessen the existing value of the allowance for loan loss and leases as of the effective date for the investment of fresh capital. On the date of closing the new investors are going to get percentage ownership based on the new invested cash and tangible book value of the bank.

An exemplar of the procedure of the clawback provision. Clawback provision will make the existing shareholders of the bank accountable for any losses incurred in the existing loan portfolio which will lessen the existing value of the allowance for loan loss and leases as of the effective date for the investment of fresh capital. On the date of closing the new investors are going to get percentage ownership based on the new invested cash and tangible book value of the bank.

One of the important factors to keep in mind is to make sure, that with the infused new capital the bank should become well capitalized by all regulatory measures. In case not the regulators can ask for infusion of more capital which will further complicate the ownership.

For example if the tangible book value of the bank, on the day of investment $3 M and the loan loss allowances of $3M and new investor groups put in $6 M. The investor should receive approximately 67% of the total authorized, issued and outstanding capital stock of the bank.

Assuming that the ALLL of the bank is $3 M on the effective date of closing or date of new investment. A claw back provision will trigger assuming the losses attributable to the existing loan portfolio of the bank after the date of new capital infusion reduces from its present value in foreseeable future. The new investor in those circumstances will receive additional shares in the bank to the extent that they will inject additional capital to replenish the reserve. The theory is basically that the existing shareholders should only receive value to the extent of the value existing as of the date of new capital infusion and to the degree that the value changes as a result of deterioration in the loan portfolio, that the burden is shared by existing shareholders, as opposed to the new investors.

New investor should also keep in mind what will be the breakeven point for the bank in terms of asset size and where the economy is heading. A five years business plan should well augment this point and give some good ideas. Some of the critical aspect of the business plan, while keeping in view the claw back provision and ALLL should also include; plans regarding

· Assets- What amount of additional capital will be required to support the existing assets, and what amount of capital will be required for future growth? What are the earnings projections for the coming year? What kind of loan mix percentages is the bank want to keep in terms of commercial, consumer and other loans? Also, to keep in mind, how the present non-accruals will perform and if there are any chances of their returning to earning assets, in some form, over what period of time.

· Liabilities-deposit mix, demand, MMDA, savings, CD’s, core, brokered, public funds. What should be the right mix?

· Capital- 12%. More the better

· Staffing –loans, deposits, compliance, I/T, back room

· Technology –Latest e-business and m-commerce solutions

· Branches –how many branches if planned and capital required.

The concept of keeping the surprises to the minimum should be the goal. As being said, without a goal, there can be no plan; without a plan, there are no chances of success.

Robin Trehan, can be reached at www.Keyfunds.com or www.CreditCapitalFunding.com

How can small community banks add value to neighbourhood development?

“Small things have their own peculiar charm.”

The present US banking environment is structured in a very complex manner. Not only does it have one of the largest pool of banks, the manner of basic functioning and hierarchy is also different. On one hand we have mega banks which have profound presence across the globe and on the other hand we can find small community banks in every nook and corner of a street. Though every institute has its own importance, small community banks, over time immemorial, have carved a separate niche for themselves. Not only have they played a vital role in catalyzing the economy but also served as a safe and secure banking option to the common man.

However, we cannot deny that large banks have eaten up a considerable business of small banks over the last three decades. In such a scenario the role of small community banks has become even more crucial. In the modern day world, community banks can add a lot of value to neighbourhood development.

How can small community banks add value to neighbourhood development?

“Small things have their own peculiar charm.”

The present US banking environment is structured in a very complex manner. Not only does it have one of the largest pool of banks, the manner of basic functioning and hierarchy is also different. On one hand we have mega banks which have profound presence across the globe and on the other hand we can find small community banks in every nook and corner of a street. Though every institute has its own importance, small community banks, over time immemorial, have carved a separate niche for themselves. Not only have they played a vital role in catalyzing the economy but also served as a safe and secure banking option to the common man.

However, we cannot deny that large banks have eaten up a considerable business of small banks over the last three decades. In such a scenario the role of small community banks has become even more crucial. In the modern day world, community banks can add a lot of value to neighbourhood development.

We know that these small community banks play a crucial role in providing small loans to customers. These loans may vary from real-estate purpose to business expansion or set-up. More often than not, these loans stretch out to double digit years and it is of paramount importance that the bank builds a strong relation with its customers to ensure a healthy symbiotic relation. By acting as role models for other financial institutes, community banks can add a lot of value towards neighbourhood development.

In the current financial times, when there is dearth of security and trust, community banks act as a beacon of hope and stability. Unlike other institutes, small community banks follow really simple practices and have a very sound functioning and management. People can count on small community banks to help them in the now. The basic structure of community banks in America has been such that they find an indomitable place in the life of people. When people see huge organisation's falling like a pack of cards and small community banks carrying out their daily routine even in the time crisis, neighbourhood feels safer and secure that their money is in safe hands.

We have got tremendous amount of gap in financial system, which small banks can fill in the void. Overall the future of business is always organization's ability to learn, and translate that learning into action rapidly, which is the ultimate competitive advantage.

Robin Trehan can be reached at www.Keyfunds.com www.CreditCapitalFunding.com

A man who misses his opportunity and monkey who misses his branch, cannot be saved.Perfect time to invest in USA, as the asset class is cheap across board.

We know that the current precarious conditions are so grave that even the most optimist people tend to have weak knees when it comes to investment. Even a positive review by Investment Gurus is not enough to ward off the uneasiness that has crept into the minds of people. However, in these turbulent times there is a ray of hope. If analysed closely, one can see that this is probably the best time to invest in USA.

The present time pose a really vibrant scenario for new investors or someone whose portfolio got hit in the recent crisis. The asset class is cheap across board and the prices are at rock bottom.

Many experienced gurus and pundits believe that the present time is perhaps the best time ever to make an investment in the American Economy. In the words of Steve Luthold, managing director of Leuthold Core Investments, “

A man who misses his opportunity and monkey who misses his branch, cannot be saved.Perfect time to invest in USA, as the asset class is cheap across board.

We know that the current precarious conditions are so grave that even the most optimist people tend to have weak knees when it comes to investment. Even a positive review by Investment Gurus is not enough to ward off the uneasiness that has crept into the minds of people. However, in these turbulent times there is a ray of hope. If analysed closely, one can see that this is probably the best time to invest in USA.

The present time pose a really vibrant scenario for new investors or someone whose portfolio got hit in the recent crisis. The asset class is cheap across board and the prices are at rock bottom.

Many experienced gurus and pundits believe that the present time is perhaps the best time ever to make an investment in the American Economy. In the words of Steve Luthold, managing director of Leuthold Core Investments, “

Today, in my view, the stock market is presenting you with one of the great buying opportunities of your lifetime -- perhaps the greatest,"

It is no doubt then that the changing times have had a really positive impact on the investment scene. Life is getting back on track for most people and things are perking up. During the last recession, every sector – be it manufacturing, IT or any other, was hit severely and took a serious plunge. The idea of diversified investment took a hit but the same impediment now bodes well for investors. For the incisive individual, the current times can prove to be a jackpot and the risk that one may take can reap rich dividends in the near future. You won’t be wrong in assuming that all corporate shares are still being sold at the price of junk at the present moment with a 50% fall in prices as compared to pre-recession era.

Whatever the case may be, ground rules remain the same i.e. balance risk against each other and use invest with prudence as people start shedding the defensive mode to dawn a new role.

Robin Trehan, can be reached at Keyfunds.com or CreditCapitalFunding.com

“One of the advantages of being disorderly is that one is constantly making exciting discoveries.”

Minority banks in the US form a meagre 2% of the entire banking fraternity but the importance of such banks in the American community cannot be ruled out. Ask any Economic pundit and he will tell you that minority banks form an essential fabric of the American Banking Community.

Given the precarious times of the current economic slowdown, investors are vying for fresh avenues where they can get handsome returns. Even in the time of recession, many investors believe that they can rake in huge profits by investing in sensible entities. One such entity that has come under the radar of analyst across the globe is a minority owned bank. The reason for such popularity is very simple. It’s due to the fact that minority banks offer hefty advantages over their peers.

“One of the advantages of being disorderly is that one is constantly making exciting discoveries.”

Minority banks in the US form a meagre 2% of the entire banking fraternity but the importance of such banks in the American community cannot be ruled out. Ask any Economic pundit and he will tell you that minority banks form an essential fabric of the American Banking Community.

Given the precarious times of the current economic slowdown, investors are vying for fresh avenues where they can get handsome returns. Even in the time of recession, many investors believe that they can rake in huge profits by investing in sensible entities. One such entity that has come under the radar of analyst across the globe is a minority owned bank. The reason for such popularity is very simple. It’s due to the fact that minority banks offer hefty advantages over their peers.

First and the foremost thing that is associated with minority owned banks is that they operate in a national workplace which offers a high profit opportunity. Given the fact that the Hispanic population is increasing rapidly in the United States, the advantages of a minority banks become that much potent. It is expected that the buying power of minorities will rise by leaps and bounds in the days that follow, making the role of minority banks more crucial than ever. To put this in figures, it is expected that minorities will account for around $1.7 trillion of purchase in the United States by the end of 2010.

Minority banks do not have good managers as top level executives get better pay options elsewhere. However, minority banks form great customer loyalty amongst ethnic groups due to historic ill treatment of such people by traditional banks. This loyalty base can be tapped into if you invest in a minority bank. It can help the investors form a good rapport with a new customer base. Given the fact that minorities are getting more money in their pockets with each passing year, the time is ripe to invest in a minority owned bank.

Robin Trehan, B. A, MIB, MBA is a financial and M&A expert.