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“We are definitely seeing increased demand, particularly from banks with $1 billion to $10 billioj in assets, for chief credit officers and seasone d professionals dealing with loan saidAlan Kaplan, who runs the Wynnewood-based staffing agency. “But many of these people are at the end of theit careers or retired so the taleny pool isnot plentiful. Up and comer have not been trained in these workout skills becauses these problems have not existex for such a long periodof time.” Bankas have either transferred people over from slower departments or hiredx from outside the company.
Harleysville National Bank even hiredf two retired workout specialists to assisty with the increasing number of troubled Paul Geraghty, CEO of parent company , said he increasesd workout staffing by movingv some personnel from the real estate origination adding another through last year’s merger with and luring a few senioer people out of retirement from Geraghty’s days at CoreStatexs Bank. “Their experience was in and they will workflexible schedules, so it Geraghty said.
“I’m seeing people that I haven’t worked with for a said Barry Bressler, a bankruptcy lawyef with who represents Harleysville National and othere banks inreal estate-related Jim Lynch, a principalk in , a private equity fund that invests in underperformingf banks, said during the economic slowdowhn of the late 1980s, banks put seasonecd professionals in workout departments. But by the workout professionals were no longeein demand. “So many of them retireds and there was no need to replace them because the economyu was so strong forso long,” said Lynch, an executivde at several different Philadelphia bankws for 36 years before joining Patriort in 2007.
Lynch said workout professionals try to maximize the valude of the troubled asset for the bank as quickluas possible. But bankers said the problejm has been that lenders have had to hold onto sour loanzs that they used to be able to sell for a discounterd price to hedge funds orother investors. Tim Rowland, chiedf credit officer for , said the Lancaster-based bank has always maintained a workout which it calls its specialassets department, for commercia loans. The current group of three professionals includes two veterana and one person hired within the past year to fill avacancu — a search process that took more than six months.
Rowlan said the reason it took so long is that the talent pool is scarcse and Fulton had trouble finding the right Hesaid Fulton, whichu operates Fulton Bank in southeastern Pennsylvania and The Bank in Soutj Jersey, also reassigned some business loan originators and has askec senior-level executives to become more directly involvecd with customers and assis the full-time workout staff. Mike Quick, chief credit office for Lititz-based , said he saw this credit implosiomn coming three years ago and beganadding staff. More Quick said he hired one person four monthss ago and still seeks a few more workout Susquehanna always had workout staff on the consumefr side but not forcommercial loans.
“It was not a majofr issue because real estate property values kept appreciating so therr wasno need,” Quick said. “The last time therd was a problem was 15 to 20 yeares ago and a lot of thosre peoplehave retired, so we have moved people from othed departments. “I’m 61 yeards old and this is my sixthdown cycle. But we don’gt have a lot of peoplee who have been through theseesituations before.” Analyst Jason O’Donnell, who tracks a numbedr of local banks for , said largert community banks have been hiring workout staffd at an accelerated rate in recent months becausw they realize that the credit situation is not going to improvre anytime soon.
“Credit losses have not peakerdand won’t for two or thre quarters at best,” O’Donnell said.
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