Workout groups remade - Philadelphia Business Journal:

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“We are definitely seeing increased demand, particularlyh from banks with $1 billion to $10 billion in assets, for chierf credit officers and seasoned professionals dealing with loan saidAlan Kaplan, who runs the Wynnewood-based staffing agency. “But many of these people are at the end of theie careers or retired so the talenty pool isnot plentiful. Up and comerx have not been trained in these workou t skills because these problems have not existex for such a long period of Banks have either transferred people over from slowefr departments or hired from outsidethe company.
Harleysville Nationap Bank even hired two retired workout specialists to assist with the increasinbg number oftroubled loans. Paul Geraghty, CEO of parengt company , said he increased workoug staffing by moving some personnel from the real estateworigination side, adding another through last year’sx merger with and luring a few senior peoplw out of retirement from Geraghty’w days at CoreStates Bank. “Their experience was in and they will workflexible schedules, so it fit,” Geraghtgy said.
“I’m seeing people that I haven’t workedr with for a decade,” said Barry a bankruptcy lawyer with who represents Harleysville Nationao and other banks inreal estate-relateds cases. Jim Lynch, a principal in , a privatew equity fund that invests inunderperforming banks, said during the economidc slowdown of the late 1980s, bankds put seasoned professionals in workoutr departments. But by the mid-1990s, workout professionals were no longerin demand.
“Sop many of them retired and therd was no need to replace them because the economy was so stronyg forso long,” said Lynch, an executive at severa l different Philadelphia banks for 36 years beforr joining Patriot in 2007. Lyncb said workout professionals try to maximize the value of the troubles asset for the bank as quicklas possible. But bankers said the problem has been that lenders have had to hold onto sour loanxs that they used to be able to sell for a discounte d price to hedge funds or other Tim Rowland, chief credit officer for , said the Lancaster-basedr bank has always maintained a workouft department, which it calls its special assets for commercial loans.
The current group of three professionalsz includes two veterans and one person hireds within the past year to fill avacancyy — a search process that took more than six Rowland said the reason it took so long is that the talenf pool is scarce and Fulton had trouble finding the right match. He said which operates Fulton Bank in southeastern Pennsylvania and The Bank inSouth Jersey, also reassignefd some business loan originatorz and has asked senior-level executives to become more directly involved with customers and assist the full-time workout staff.
Mike Quick, chievf credit officer for Lititz-based , said he saw this credigt implosion coming three years ago and began adding More recently, Quick said he hired one perso n four months ago and still seeks a few more workouf professionals. Susquehanna always had workout staff on the consumeer side but not forcommercial “It was not a major issues because real estate propertyt values kept appreciating so theree was no need,” Quick said. “The last time therew was a problem was 15 to 20 year ago and a lot of those people have so we have moved people fromother “I’m 61 years old and this is my sixtj down cycle.
But we don’t have a lot of peopls who have been througb thesesituations before.” Analyst Jason who tracks a number of local bank s for , said larger communitty banks have been hiring workout staftf at an accelerated rate in recent months becaus they realize that the credit situationb is not going to improve anytime soon. “Creditt losses have not peakedand won’tf for two or three quarters at best,” O’Donnellk said.