News
Through the Richmond Fed's Survey of CDFIs in the Southeast (SCDFISE), CDFIs provide timely information on their capitalization, demand, and capacity, and development programs and services. This article presents key findings from the 2017 SCDFISE, including trends in CDFI certification, analysis of asset size, and perennial challenges in meeting demand for products and services provided by southern CDFIs.
The Senate is looking to pass legislation within the next month that would roll back restrictions on swaths of the finance industry. Such legislation would constitute the most significant loosening of rules imposed in the wake of the 2008 financial crisis. Buoyed by their success in rewriting the tax code, Republican lawmakers now aim to help the financial industry relax many post-crisis rules and regulatory obligations, particularly for thousands of small- and medium-sized banks. The bill would allow hundreds of smaller banks to avoid certain elements of federal oversight.
A new provision in the Tax Cuts and Jobs Act lays the foundation for placing trillions of dollars in unrealized capital gains into investment funds to drive long-term capital to distressed communities. The new Opportunity Zone Program provides tax benefits in Opportunity Funds, or "O Funds." O Funds will activate passive holdings by connecting investors to investment opportunities in Opportunity Zones. This concept, which was originally introduced in the Investing in Opportunity Act, is the first new community development tax incentive program introduced since the Clinton Administration.
According to Harvard University JCHS' newly released report, "America's Rental Housing 2017", unprecedented growth in the rental housing market is slowing amidst persistent affordability challenged for low- and moderate-income renter households. The report finds that fewer new renter households are being formed, rental vacancy rates have risen, and rent increases have slowed. At the same time, renter demographics are changing and rental affordability challenges remain prevalent.
We are seeking a high energy and dynamic candidate for the position of Public Policy Manager. The Manager will advance our public policy advocacy agenda. The position reports to Chief Executive Officer, but works with all members of the team. This is a full time 40 hour per week position. The position is located at CDBA's offices in Washington, DC. Click here to read the full description.
The tax reform law enacted in late 2017 is already threatening to exacerbate the affordable housing crisis. The law is expected to eliminate 300,000 affordable housing units over 10 years, partly because it will reduce the value of banks' low-income tax credits, which finance half of all affordable housing units, according to a report by the nonprofit real estate firm NHP Foundation. Lowering the corporate tax rate reduces the value of the tax credits by roughly 15% because banks and partnerships that use the tax credits are limited in deductions on appreciating expenses.
In Portland, Oregon, a movement is building to establish a public bank. After debating divestment from companies whose practices might be harmful to people or the environment, the City Council voted in April to stop investing city money in all corporations. Portland is also one of the numerous US cities that decided to stop banking with Wells Fargo. "My hope is that a public bank wout be a profit-making institution, expect the profit would be for public purposes," said David Delk, of the Portland Public Banking Alliance. "The possibilities are limited really only by our imagination because the needs are so great."
A growing number of cities across the United States are considering launching city-owned public banks. Among these are Portland, Seattle, Los Angeles, San Francisco, Oakland, Philadelphia, Santa Fe, and Washington DC. The Public Banking Institute, a national advocacy nonprofit, has been supporting these and many other campaigns. At the state level, New Jersey's governor-elect Phil Murphy, who spent 23 years at Goldman Sachs, has expressed interest in establishing a state public bank.
Commerce Bancorp, of Greenwood, MS, is acquiring all of the issued and outstanding capital stock of Tallahatchie Holding Co. of Charleston. The share exchange deal was signed on November 29, 2017, and will see Tallahatchie County Bank's single branch and $58 million in assets merge to Bank of Commerce, with five pre-existing branches and $395 million in assets.
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In Mississippi, Commerce Bancorp Inc. of Greenwood is acquiring all of the issued and outstanding capital stock of Tallahatchie Holding Co. of Charleston.
The share exchange deal was signed Nov. 29, 2017, and will see Tallahatchie Holding merging into Commerce Bancorp, according to a regulatory filing recently obtained by S&P Global Market Intelligence.
Deal terms were not disclosed, but SNL valuations for bank and thrift targets in the Southeast between Nov. 29, 2016, and Nov. 29, 2017, averaged 159.50% of book, 169.25% of tangible book and had a median of 23.77x last-12-months earnings, on an aggregate basis.
Following the merger of the holding companies, Tallahatchie County Bank will be merged into Commerce Bancorp unit Bank of Commerce.
As of Nov. 30, 2017, Bank of Commerce has $395 million in assets and five branches, while Tallahatchie County Bank has $58 million in assets and one branch. Commerce Bancorp will enter Tallahatchie County, Miss., with one branch, where it will be ranked second with a 42.02% share of approximately $122.31 million in total market deposits. The combined entity will have over $450 million in assets and a presence in five counties in North Mississippi.
Two Tallahatchie County Bank executives will take on new roles at the combined entity. President and CEO William McKellar will serve as executive vice president and Vice President Rob Rowland will serve as senior vice president and market president.
The merger is slated for completion on or before March 1, subject to the receipt of regulatory and shareholder approvals and other customary closing conditions.
Butler Snow LLP, with Jefferson Stancill as lead attorney, served as Commerce Bancorp's legal counsel in the transaction.
Old Second Bancorp. A $2.4 billion-asset bank in Aurora, IL, has agreed to buy Greater Chicago Financial, the parent of $350.4 million-asset ABC Bank. The deal, which is expected to close in the second quarter, values Greater Chicago at 119% of its tangible book value. "ABC Bank's four offices and more than a century of service in the Chicago market are a great complement to our existing footprint," said James Eccher, Old Second's President and CEO.