It appears that the proverbial hangover from overzealous Commercial Real Estate lending is still pushing on strong. Right here in Minneapolis we have another three banks that are under FDIC scrutiny. Some don't even have capital to cover the reserves they have on their books now. Still, most must improve their tier one capital ratios to a level that big brother is comfortable with before they go slinging loans out again. The current customers of these banks will suffer in the interim, as the restrictions prohibit the bank from lending.
Banks, just like any other company, fall victim to poor management. Fortunately, for the managements of those banks finding themselves in precarious positions such as the few mentioned in the above article, our partners and associates over here at the Platinum Group can help in a couple of ways.
1. We're closing a distressed debt fund that will be able to pick some of those problem loans off of the banks books, thus freeing up reserve capital which can be moved back into the tier 1 position.
2. For those loans that have been referred to the banks special assets or workout groups, we can help alleviate some of the pain in managing those loans through our full service receivership practice.
I will follow up later on with posts that go into greater details on these two practice areas for our firm, but for the time being, if you happen to know of a banker who is really stressed out as a result of regulatory authorities, you might send them my way for a brief conversation. Even if we don't do business together, we can certainly help bring some creative ideas to the table that wouldn't be there otherwise.
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