After its high-profile acquisitions of mortgage giant Countrywide Financial Corp. and investment bank Merrill Lynch, Bank of America Corp. is looking to establish itself as a one-stop financial superstore.
In a pilot program being rolled out in the L.A. and Washington, D.C., markets, the bank will place financial advisers, mortgage specialists and small-business consultants in select branches to answer questions and provide advice to customers on the spot – a process that usually requires scheduled appointments and referrals.
What’s more, these “specialty stores” will feature videoconferencing capabilities, so customers can connect instantly with specialists across the country.
“With the acquisitions we made over the last couple of years and the increased capabilities we have on the investment and mortgage sides, we are looking for ways to bring those capabilities closer to the customer,” said Anne Pace, a spokeswoman for the bank.
In mid-2008, Bank of America acquired Countrywide, the Calabasas mortgage giant that specialized in subprime loans, for $2.5 billion. Later the same year, the bank announced its intention to acquire Merrill for $50 billion amid the financial crisis.
Bank of America plans to convert about a dozen local branches beginning in January. Customers will be able to make appointments online or just walk into branches.
James Barth, a senior fellow with Santa Monica’s Milken Institute, said while it may be expensive for the bank to put additional specialists in the branches, it could be a savvy move that would appeal to existing or potential customers.
“It’s costly, but it may be good public relations,” Barth said.
Still, he said the bank will need to be careful about the advice it provides. The newly created Consumer Financial Protection Bureau was established by the White House to oversee the products and services offered by financial institutions, and it remains to be seen how the agency will feel about this sort of service.
“It’s not yet clear what that new bureau’s position will be,” Barth said.
Buying Spree
Private equity is showing signs of life, and Marlin Equity Partners has been leading the charge of late.
The El Segundo firm said last week that it has acquired Hospedia Ltd., an English company providing bedside multimedia terminals, for an undisclosed sum.
It is the ninth acquisition this year by the firm or its subsidiaries, and is the second deal in the past month. In late August, the firm partnered with Samnite Technologies to buy a division of telecommunications company Nortel Networks for $39 million.
Marlin, which has more than $1 billion under management, targets undervalued companies in the midst of operational or financial change.
The firm took a hit recently when Phoenix Technologies, a software developer Marlin had agreed to buy for $139 million, said it received an unsolicited $150 million bid. Phoenix did not identify the bidder.
Loan Surge
Local small-business commercial real estate lending jumped sharply in August from the previous month.
In the L.A. district, $78.3 million in SBA-504 loans were approved by the U.S. Small Business Administration last month, a 174 percent increase from July. Thirty-nine loans were approved during August, nearly double the previous month’s total.
SBA-504 loans are used primarily to finance purchases of commercial real estate and industrial equipment.
“Commercial real estate prices are showing signs of stabilizing and the 504 rate is the lowest in the program’s history,” said Kurt Chilcott, president of CDC Small Business Finance, in a statement.
Low Score
L.A. residents, it turns out, aren’t exactly the most creditworthy out there.
Last week, credit reporting company Experian released its rankings of the cities with the highest credit scores, and Los Angeles didn’t even make the top half. With a score of 737, Los Angeles ranked 95th out of 142 cities surveyed.
Minneapolis topped the list with a score of 787, while San Francisco was the highest ranked California city, earning the No. 5 ranking with a score of 780.
Bakersfield was the lowest ranked city in the state, coming in at No. 135 with a score of 708.
C-Suite News
Nara Bancorp Inc., the Koreatown holding company for Nara Bank, announced that Chairman Chong-Moon Lee has resigned from the board to dedicate his time to building schools in Asia and Africa. Ki Suh Park was elected the new chairman. … Downtown L.A. bank holding company City National Corp. has hired Jonathan Worley as vice president and head trader for its City National Securities subsidiary. … Citi Private Bank, the wealth management arm of banking giant Citigroup Inc., announced that Nancy Citron Neal has joined the L.A. office as a director and ultrahigh-net-worth private banker.
Staff reporter Richard Clough can be reached at [email protected] or at (323) 549-5225, ext. 251.
