Private Equity Leaders Forum to Explore Banking Landscape, as Cascade of Bank Failures Surpasses 115

PRLog (Press Release) - Oct 31, 2009 -
Private Equity Leaders Forum 2009, "Buying a Failed Bank: Opportunities and Pitfalls" (http://www.PrivateEquityLeadersForum.com), December 10th, New York City, will discuss the current banking system landscape, as the cascade of bank failures this year surpassed 115 already, the most 1992, when 181 banks collapsed during the savings-and-loan crisis. Questions to be addressed by Private Equity Leaders Forum 2009, "Buying a Failed Bank: Opportunities and Pitfalls" include:

·         Does the trouble in the banking system from bad loans and the recession go even deeper than the number suggests?

·         Would the economic recovery save some banks that would otherwise go under?

·         Could it wind up costing even more if the recovery is slow and smaller banks' finances get even worse?

·         Are the glimmers of hope in the economy enough to stop loan deterioration?

Private Equity Leaders Forum 2009 will also address the following topics, all of them top of mind among private equity executives participating in bank auctions:

·         Eligibility and Required Qualifications for Private Equity Firms: Private equity funds face a barrier to acquire or make significant investments in a failed bank following the FDIC's issuance of its "Final Statement of Policy on Qualifications for Failed Bank Acquisitions”. Which are the most critical provisions of the Policy Statement? Which are the factors the FDIC Board of Governors might consider to grant weavers for one or more provisions of the Policy Statement?

·         Capital Commitments and Structure and Cross-Support Requirements: The acquiring depository institution must be capitalized at a minimum 10% Tier 1 common equity to total assets ratio. Would opaque ownership structures be a constraint to buy a failed bank? Which additional disclosures private equity firms will need to provide? How to deal with the cross-support requirement, collateralizing risk among separate investments? Would the FDIC offer to share buyers' losses on the assets being transferred be enough to attract buyers?

·         Evaluating Competitive Issues and Assessing Expected Returns: The 10% threshold is substantially higher than the current capital requirements for FDIC insured banks and most bank holding companies. The FDIC typically only requires newly formed banks applying for deposit insurance to maintain a minimum Tier 1 capital to assets leverage ratio of no less than 8% for the first three years of operation. Would this threshold limit expected returns for private equity investors? Which other competitive issues firms need to be aware of? Would there be advantages buying a failed bank versus starting a bank from scratch?

Sponsors are invited to contact GoldenNetworking.com by sending an email to info@goldennetworking.com to receive Private Equity Leaders Forum 2009's Sponsorship Package. This forum is produced by GoldenNetworking.com, the premier networking community for businessmen, entrepreneurs, professionals and diplomats.