In nearly every category from real estate loans to small business loans to consumer loans, banks in the St. Louis area are lending less than a year ago, according to data released from the Federal Reserve Bank of St. Louis.
The Federal Reserve, which tracks more than 70 banks chartered in the St. Louis area, released its third quarter report from locally chartered banks. The figures do not include financial services firm Stifel Financial or banks that are headquartered outside of St. Louis, such as Bank of America or M&I.
The number of locally chartered banks, 73, dropped by one in the quarter as Citizens State Bank of Shipman, Ill., merged in July with Carlinville National Bank in Carlinville Ill., creating the newly named CNB Bank and Trust.
Locally chartered banks’ loans for the third quarter that ended Sept. 30 totaled $20.04 billion, down from $22.2 billion in the third quarter of 2010. The third quarter loans are up slightly from the second quarter of this year, when locally chartered banks had $20.03 billion in total loans.
“What we’re seeing is that lending standards have changed from prior to the economic crisis,” said Julie Stackhouse, senior vice president of the Federal Reserve Bank of St. Louis. “Banks have plenty of cash to lend. The disconnect is finding borrowers that have the demand and the credit record to support a loan.”
Some borrowers are sitting on the sidelines waiting for the economy to improve before they expand their businesses. Construction and industrial, or C&I, loans, which go to pay for equipment upgrades and inventory, fell in the third quarter to $3.3 billion, down from $3.6 billion a year ago. Many banks in the St. Louis area have targeted growing C&I loans to replace construction and land development loans, which had high default rates during and following the recession payday loans direct lenders.
Small business loans have also declined, to $3.6 billion in the third quarter, down from $3.9 billion a year ago.
“At this point, so much is dependent on confidence in the economy, and demand for loans is flat,” Stackhouse said. “Businesses don’t want to gear up until (consumer) spending is up.”
Not all banks are seeing slowdowns in loan activity. Clayton-based Enterprise Bank & Trust grew its loans, both organically and through acquisitions, with its fastest growth category in C&I loans.
“Overall, most business owners are careful about adding more people or equipment, but some segments are growing, such as health care and manufacturing,” said Enterprise Bank & Trust’s Chief Executive and President Stephen Marsh.
Nonperforming loans, or those that are at least 90 days past due, totaled $855 million for all St. Louis-chartered banks in the third quarter, down from $1.1 billion a year ago. Banks are also setting aside less for loan loan provisions, which fell to $545.1 million in the third quarter compared to $614.3 million a year ago.
“Credit quality is a slow, steady improvement,” Marsh said.
Another positive trend is that profitability is improving. Banks chartered in the St. Louis area had a combined profit of $104. 8 million for the year through Sept. 30, compared with a $50 million loss in the same time period last year. Of the 10 largest locally chartered banks, only two posted a loss for the first nine months of the year, First Bank and Reliance Bank.
First National Bank of St. Louis posted a $14.6 million profit for the first nine months of the year, up 8 percent from the comparable period a year earlier.
“Our customer base has seen some improvement in their businesses in the last 12 months, but this is still the worst economic downturn I’ve seen in 35 years,” said President Rick Bagy.
Premier Silvio Berlusconi’s government failed to come up with immediate growth measures to show a summit of world leaders, sending Italy’s borrowing rates to dangerous new highs Thursday and igniting talk of a possible government collapse.
Italy’s respected president, who would be responsible for choosing an interim government if Berlusconi’s did fail, was holding talks with party leaders in a search for possible alternatives.
Berlusconi’s weakening grip on his majority was evident in a Cabinet meeting that lasted late into the night Wednesday amid reports of discord with his finance minister, Giulio Tremonti. Berlusconi wanted the Cabinet to agree to enforce some emergency economic reforms as a decree, so they could take immediate effect, including selling government property and privatizing some local public services.
Instead, he headed Thursday to a summit in Cannes of the Group of 20 wealthy nations with only proposed legislation, requiring approval by a divided Parliament.
At Cannes, Berlusconi pledged to other eurozone leaders that he would put the measures to a vote of confidence within the next two weeks. If those measures fail, Berlusconi would be forced to step down.
Berlusconi has insisted that his government will survive its mandate until 2013, but even his coalition partners, the Northern League, have cast doubt on that.
“It is difficult to avoid the impression that this government’s time is numbered in days, or weeks, and that the legislature will finish at the beginning of 2012,” the Corriere della Sera newspaper wrote in a front page editorial.
“Berlusconi has become a puppet in the Italian political theater,” the speaker of the lower house and former Berlusconi ally, Gianfranco Fini, told state TV.
He urged Berlusconi to show his leadership by seeking a broad alliance to see the country through the crisis.
Market reaction to Italy’s political deadlock was withering. Italy is the eurozone’s third largest economy, far too large to be bailed out like Greece, Portugal and Ireland have been. Yet Italy has a debt of euro1.9 trillion ($2.6 trillion), or 120 percent of GDP, second only to the debt ratio in extremely troubled Greece.
The yield on Italy’s 10-year bonds jumped to 6.4 percent on the secondary market at one point Thursday, 4.62 percentage points higher than the rate on the German equivalent bund. Speculation that the European Central Bank was back in the markets buying up Italian bonds took the yield back down to 6.17 percent.
The ECB has been buying up Italian bonds for weeks in an attempt to keep borrowing rates at manageable levels. Borrowing costs of 7 percent or more are widely considered unsustainable, which could cause a default on public debt.
President Giorgio Napolitano met with leaders of Italian parties Thursday to gauge the political situation and seek alternatives. If the government falls, Napolitano would decide if a technical government or someone else in the center-right would run the country before new elections.
Napolitano sought to reassure Italy’s partners and the markets, saying that both the majority and the opposition “are aware of the weight of the problems that Italy must confront with urgency.” He said the next parliament vote would allow him to better evaluate the political situation.
The head of Berlusconi’s party, Alfonso Alfano, insisted after meeting with Napolitano that Berlusconi has a majority to continue to 2013. But even he addressed the possibility of the government’s failure, saying that new elections, and not a technical government, should be next.
Berlusconi’s influence frayed further when six of his Party of Freedom (PDL) lawmakers signed a letter saying they would no longer support him in parliament if he did not seek to build a national unity government.
“The current government does not have the consensus in parliament to achieve the difficult agenda of commitments taken in front of European institutions, the parliament and the Italian people,” they wrote.
Later, another two of his lawmakers defected to a centrist party.
The government has been further weakened by reports of discord on emergency measures between Berlusconi and his finance minister.
After raising expectations of a decree, the government announced legislation reportedly after Napolitano suggested they would enjoy more legitimacy if passed by parliament. They include divesting government-owned real estate, privatizing local public companies, encouraging investment in infrastructure and liberalizing the labor market.
The measures must be approved by the end of the year, the government said in a statement.
They were outlined to the European Union last week after Italy and Berlusconi came under pressure from other eurozone governments and financial markets to find ways to boost the country’s anemic growth.
However, doubts have been growing that Berlusconi has the political muscle to push such reforms through.
Greek railway workers and journalists joined ferry crews, garbage collectors, tax officials and lawyers on Tuesday in a strike blitz against yet more austerity measures required if the country is to avoid defaulting on its debts.
The protests will lead into a general strike over the coming two days, culminating on Thursday when Parliament holds a crucial vote on the new painful cutbacks that follow nearly two years of austerity. A similar strike before an austerity bill in June was accompanied by large protest marches which degenerated into street battles between rioters and police.
The highly unpopular new measures include further pension and salary cuts, the suspension on reduced pay of 30,000 public servants out of a total of more than 750,000 and the suspension of collective labor contracts.
Meanwhile, European countries are trying to work out an overall solution to the continent’s deepening debt crisis, ahead of a weekend summit in Brussels.
“The situation is exceptionally difficult, because there is great uncertainty in Europe, great uncertainty internationally,” Finance Minister Evangelos Venizelos said in a meeting with the country’s president, Karolos Papoulias. “People … are making big sacrifices. We are carrying out a patriotic duty because we have to save the country.”
Venizelos also tempered expectations for reaching a definitive deal on a second rescue package for Greece at a European Union summit this weekend. The second bailout, worth euro109 billion, was initially agreed in July, but crucial details remain to be worked out.
“We must not have great expectations for Sunday’s summit,” Venizelos said. “We will seek what is best for the country and the eurozone. Everyone understands that if Greece is saved, the eurozone will be saved too. And the reverse is also true: if the Europeans fail on Greece they will not be able to safeguard themselves.”
Greece’s embattled Socialist government needs to pass the new measures _ which some of its own backbenchers have threatened to block _ to receive the next euro8 billion ($11 billion) installment of the original euro110 billion package of international rescue loans that have been keeping it afloat since May 2010.
“It must be understood that we are fighting a war here,” the finance minister said, adding that a “national fight” must be waged against tax evasion. “If some people think that we live under normal circumstances and we are implementing a policy we want to implement of cutbacks and austerity, they are very much mistaken.”
The bailout was needed after the country’s borrowing rates soared on international markets upon revelations that Athens had misrepresented its financial data for years. Rating agencies cut Greece’s credit grade to the lowest in the world.
The country has maintained a market presence through regular sales of short-term debt _ up to six months _ and on Tuesday successfully auctioned euro1.62 billion worth of 13-week treasury bills. The country had to offer buyers a slightly higher yield, 4.61 percent compared with 4.56 percent at the previous sale last month. Investor interest was slightly higher, with the auction 2.86 times oversubscribed.
The government has said it will run out of cash in mid-November if the next bailout loan installment is not forthcoming.
Tuesday’s strikes kept island ferries in port for a second day, while stinking mounds of rotting garbage remained uncollected for the 17th day on the streets of Greece’s cities, carpeting sidewalks and forcing pedestrians to make detours through speeding traffic.
Tax collectors and lawyers joined the strikes, while civil servants occupied the finance and labor ministry buildings.
The new austerity measures were announced after the government failed to meet its savings targets, despite some 22 months of austerity that saw a record loss of jobs during a deep recession.
In July, unemployment rose to 16.5 percent, from 16 percent in June and 12 percent a year earlier, according to data provided Tuesday by Greece’s statistical authority. The total number of unemployed exceeded 820,000.
On Wednesday and Thursday, teachers, doctors, taxi drivers and bank employees will be on strike, together with air traffic controllers _ whose walkout will halt all flights for two days.
The country’s two main labor unions have also called rallies and protest marches to Syntagma Square outside Parliament in central Athens during the general strike, while a Communist union has urged members to block off the assembly building on the day of the vote.
Vans mounted with loudspeakers did the rounds of central Athens Tuesday, urging workers to “flood Syntagma Square and surround Parliament.”
Chemical manufacturer Solutia Inc. is buying Southwall Technologies Inc., a developer of films and glass products for the automotive and architectural industries, for $113 million.
Town & Country-based Solutia is buying Southwall for $113 million in cash, or $13.60 per share of Southwall’s common stock, the companies announced Friday. Solutia’s tender offer is expected to be completed in the fourth quarter this year. Southwall is based in Palo Alto, Calif.
Japanese automakers Nissan and Mitsubishi are strengthening their cooperation by expanding the number of models they make for each other in Japan.
Nissan and its smaller rival Mitsubishi have had what is called an original equipment manufacturer, or OEM, deal since December 2010. They manufacture specific vehicle models for each other and sell them under their own brands.
Nissan Motor Co. said Thursday it will provide the Fuga luxury sedan to Mitsubishi Motors Corp., starting from summer next year.
They have also started talks on Mitsubishi providing the Minicab-MiEV commercial electric car to Nissan in the fiscal year that begins April 2012.
Such OEM deals are fairly common in the auto industry. They allow companies to cut costs by increasing production scale and to expand their lineup of types of cars they don’t want to invest in the development or manufacturing of personal loans for bad credit.
Under an earlier agreement, Nissan, which also makes the Leaf electric car and March subcompact, is providing the NV200 Vanette compact van to Mitsubishi Motors from next month.
They also set up a joint venture called NMKV Co., which began operating in June, to work together on minicars for the Japanese market, which may later include other nations.
Mitsubishi President Osamu Masuko has said he hopes the joint venture will fuse his company’s design expertise with Nissan’s purchasing power.
“These initiatives are intended to strengthen the competitiveness of both companies in Japan,” both sides said in a statement.
Leaders of a House panel say they plan to make Obama administration officials answer for putting taxpayers on the hook for a half-billion-dollar loan that went to a now-bankrupt solar panel manufacturer.
The panel is conducting a hearing Wednesday that will examine what went wrong with Solyndra Inc., which had received a federal loan of nearly $528 million and recently filed for bankruptcy. GOP leaders of the subcommittee describe the loan as a “half-billion bust” that raises red flags about the administration’s efforts to generate more jobs in the renewable energy sector.
“It is not the role of government to pick winners and losers in the market,” said Republican Reps. Fred Upton of Michigan and Cliff Stearns of Florida, in a joint statement. Upton is chairman of the House Energy and Commerce Committee, while Stearns oversees the committee’s investigations and oversight panel.
The panel will hear from officials with the Energy Department and the White House Office of Management and Budget, which played the central roles in approving a loan guarantee for Solyndra. The guarantee essentially works as an insurance policy that covers a company’s debt obligation in the event of default. In many cases, the loans come from private banks, but in Solyndra’s case, the financing came from the federal government itself.
Two executives with Solyndra Inc. were also invited to testify but are now expected to appear voluntarily next week. The two Solyndra executives invited to appear before the panel were Brian Harrison, the company’s president and chief executive officer, and W.G. Stover Jr., a senior vice president and chief financial officer.
A news release about the hearing did not provide any reason for the delay, but a Solyndra spokesman, David Miller, said numerous factors played a role, including “legal complexities arising from last week’s activities and the urgency of bankruptcy proceedings.”
“It is in the best interest of all interested parties for them to remain in California to engage with potential purchasers,” Miller said.
The release from the Energy and Commerce Committee said lawmakers have been assured of the pair’s appearance next week. Miller said the company was in contact with committee staff and was working with them on a future date.
Republicans on the panel have been highly critical of the loan to Solyndra. They say the company’s financial woes should raise red flags about the federal government’s efforts to jump-start renewable energy projects. Those efforts include the loan guarantee program.
The $862 stimulus bill that Congress passed in early 2009 included money for the loan guarantee program. GOP lawmakers are also using the company’s collapse to attack economic stimulus legislation in general.
Lawmakers also say Solyndra misrepresented the company’s viability when company officials visited Capitol Hill in July. While company officials painted a picture of improving finances, the company was preparing to restate financial statements projecting reduced revenues, according to staff with the Energy Department’s loans program.
The Energy and Commerce subcommittee has been investigating Solyndra for nearly six months. They’ve questioned whether the Energy Department and the White House conducted a proper review of Solyndra’s application for a loan guarantee. They’ve also asserted that politics may have played a role in approving the loan guarantee by pointing out that investors in Solyndra had helped raise money for President Barack Obama’s 2008 campaign.
Solyndra was heralded as one of the nation’s bright spots of green technology innovation, creating a solar tube of sorts that could soak up sunlight from many angles, producing energy more efficiently and using less space. The company’s panels were also light and easy to install, which was meant to save upfront costs.
But over the past few years, other companies caught up and provided similar products at a lower cost.
Administration officials noted that a loan guarantee for Solyndra was sought by both the Bush and Obama administrations and that private investors also put more than $1 billion into the company.
As executive director of St. Louis Regional Clean Cities, a Department of Energy-sponsored program, Kevin Herdler’s mission for the past decade has been helping the St. Louis area cut its dependence on foreign oil and improve air quality by promoting alternative fuels such as biodiesel and compressed natural gas.
“We’re sending almost $1 million a minute out of this country for foreign oil, and we’ve got to do something to bring that back,” he said.
“Whatever technologies are out there that help use reduce our dependence is what our mission is.”
Part of that job these days is helping the St. Louis area prepare for electric vehicles and plug-in hybrids such as Chevrolet’s Volt, which should roll into local auto dealerships in the coming weeks.
Herdler began organizing a regionwide electric vehicle task force in the fall of 2009. The group, represented by a wide range of interests, from electric utility Ameren to auto dealers, union electricians and others, meets monthly to help ensure the region is equipped with charging infrastructure.
How did the task force get started, and what’s the mission?
It was my idea to get it started, but I wouldn’t say I was the driving force behind it. It was something that this current administration is excited about, so it makes it part of my mission. We (in St. Louis) don’t want to be the last to get the vehicles, so the only way we’re going to get the vehicles here is to get the infrastructure in place. I think we’ve put together a real good team of industry leaders, and now we’re just trying to get all of our ducks in a row and get ready.
Which comes first, the charging stations or the cars?
We’ve had this discussion for 15 years that we’ve had this (Clean Cities) program. You have to build first. I’ve had several fleets that want to switch over to other fuels (such as natural gas and propane), but they’re leery to bring their vehicles here because the infrastructure isn’t here. We have to have the infrastructure in place for the manufacturers to bring the vehicles here.
What’s needed in terms of public EV charging infrastructure?
Ninety-five percent of the charging is either going to be at home or at the workplace. People are going to drive to work, they’re going to make their couple of stops on the way home and they’re going to go home and plug in. And they’ll be charged in the morning when they’re ready to go to work. I don’t see us needing many public charging facilities.
What challenges do you see in getting the necessary infrastructure in place?
Our concerns are, and we’re working with the electrical associations and building commissioners, the city residents that don’t have alleys, the lofts and apartment complexes. How are you going to get the charging out to the curb? It’s not just St. Louis. It’s any city, any urban area that has that situation. And these lofts are even more confusing because you’ve got an electrical room and who knows where it’s going to be compared to where street parking is.
President Obama has called for 1 million electric vehicles on the road by 2015. Are EVs and plug-in hybrids going to be the winning alternative vehicle technologies?
No. We’re going to need them all to cut our dependence on fossil fuel. Electric is just one small piece of that, one niche market. Who knows what the next administration is going to do? And technology keeps getting better and better.
The departure of Steve Jobs from the role of CEO leaves Apple Inc. with a deep bench of executives who have been with the company for more than a dozen years
SABMiller PLC, one of the world’s largest brewers, has launched a hostile $10 billion bid Wednesday for Australian rival Foster’s Group Ltd. after its board rejected a takeover offer.
The maker of Peroni, Grolsch and Miller Lite said it is taking the 4.90 Australian dollars ($5.13) per share cash offer, minus any dividend Foster’s chooses to pay out, straight to shareholders and that the offer would be funded by existing resources and new debt.
The London-headquartered company said Foster’s had so far declined to consider a similar offer made in June. The Australian brewer said the bid significantly undervalued the company.
SABMiller had said in June that Foster’s was attractive because it was Australia’s leading brewer with seven of the top 10 beer brands, and buying the company was consistent with its strategy to spread globally. It considers Australia an attractive market because of its population growth and economic connections to Asia.
SABMiller, which is listed in London and Johannesburg, said it had a proven track record of integrating brewing companies and improving the performance of those businesses.
SABMiller said it had decided to make the offer to the shareholders directly as Foster’s board showed “no willingness” engaging with the offer.
SABMiller shares were up 0.5 percent at 21.29 pounds ($34.88) Wednesday morning.
Moviegoers may want to take two bites of the same apple next year: A pair of live-action adventure flicks based on Snow White will come out in theaters just months apart.
As it stands, the first, still-unnamed Snow White movie is scheduled for release March 16. That gives moviegoers two and a half months before “Snow White and the Huntsman” on June 1.
Executives are confident that both projects can succeed, given their differences in stars, tone and plot.
However bizarre the coincidence is, history shows that two similar projects like these can both attract large audiences.
In May 1998, viewers turned out for “Deep Impact,” a movie about a comet threatening Earth. They showed up again that July when an asteroid did the same in “Armageddon.” “Deep Impact” sold $349 million in tickets worldwide, and “Armageddon” followed with $555 million.
Audiences didn’t duck for cover either when “Dante’s Peak” blew in February 1997 only to have “Volcano” erupt that April. The first made $169 million and the other $120 million at the box office.
The latest standoff pits a couple of “frenemy” studios against each other _ newbie studio Relativity Media and its longtime distribution partner, Universal Pictures.
Since 2005, Relativity had provided financial backing for most of Universal’s new movies in a deal that was to last through 2015. But Relativity has been eager to make money from distributing as well, as it did with the March 8 release of “Limitless,” which has sold more than $150 million in tickets worldwide.
So in June, Relativity passed its co-financing deal with Universal to Relativity’s financial backer, Elliott Management. That paved the way for the two studios to compete head to head _ Relativity with the unnamed movie and Universal with “Huntsman.”
“Everybody kind of goes into this eyes wide open,” said Tucker Tooley, Relativity’s president of worldwide production. “It’s the nature of competition. It’s the nature of this business.”
Universal executives declined to comment.
Executives argue that the two Snow White movies are spaced far enough apart so that advertising one won’t inadvertently drive people to the other.
Most movies make 95 percent of their sales in the first four weeks. On average, people in North America see four movies a year. There’s plenty of time to get refreshed and go out again.
“Ten weeks in the movie business is a lifetime,” said “Huntsman” producer Joe Roth.
He should know. Roth was head of Disney’s studios when its “Armageddon” opened second but still sold $200 million more in tickets worldwide than “Deep Impact.”
The casts of both Snow Whites are also distinct enough to merit a return trip to the theater.
In Relativity’s version, billed as a family comedy, Julia Roberts is in for an intriguing role reversal as the former “Pretty Woman” plays the Evil Queen.
“She’s a very fun and evil and wicked Evil Queen,” said producer Bernie Goldmann, who also produced “300.” Nathan Lane is set to add a humorous touch as a bumbling Huntsman.
In Universal’s epic action adventure, Kristen Stewart of “Twilight” fame gets “Karate Kid”-like fight training from buff Chris Hemsworth of “Thor.” Hemsworth plays the mercenary Huntsman, who disobeys orders to kill her. The action-packed movie also involves a love triangle with Prince Charmant, played by Sam Claflin.
“At its heart, it becomes a girl’s empowerment movie,” Roth said.
Timing and casting aside, Snow White is a tale that has been told many times with many different plot twists. These versions follow that tradition.
In an early Italian retelling, the good guy we know from Disney’s 1937 animated classic as Prince Charming rapes Snow White while she’s sleeping, according to Tina Boyer, a professor of German at Wake Forest University. She awakes not to a kiss, but to her baby being born. Another tale has Snow White fleeing her father, not her wicked stepmother, because he’d like to make her his incestuous wife.
Relativity’s movie has Snow White teaming up with the seven dwarves to fight the Evil Queen. In Universal’s, she teams up with the Huntsman to fight back.
Reading the 20-plus different versions is partly what inspired Melisa Wallack to write her own take in the script that Relativity later bought, said Goldmann, Wallack’s husband.
“It enabled us to understand that there was a lot of freedom in expanding the story,” he said.
Evan Daugherty had written the other Snow White script while he was a film student at New York University many years ago. He also takes many liberties with the plot. Universal, now owned by Comcast Corp., bought it following a bidding war.
It helped that “Alice in Wonderland” sold $1 billion at the box office last year and revived interest in classic stories that feature young girls and have fallen out of copyright protection.
Even if producers of both projects saw success and jumped on the bandwagon, there aren’t enough complex roles for young women these days anyway, said Marjorie Rosen, a professor of film and journalism at Lehman College. Having characters as rich as Snow White and the Evil Queen on screen is a blessing, Rosen said, even if there are going to be two versions of them.
She said pent-up demand for strong female leads has led to the success of a slew of recent bride movies, from “27 Dresses” and “Bride Wars” to the recent “Bridesmaids.”
“Women were lining up for the first week or two because they were desperate for movies about them,” Rosen said. “Maybe (the studios) are hoping that Snow White is kind of like that but better.”
And if there’s two, why not a third? Word has it that Disney has been working on a live-action remake of its animated classic for the past decade. In that one, Snow White ends up in a forest with seven Shaolin monks.
At its core, each iteration is about a dysfunctional family, something that touches everyone at some level. That may be why the story is still relevant today.
“They can take the basic themes if they want to and go with it because that’s what fairytales and folklore are all about,” said Wake Forest’s Boyer. “They have to be reinvented. That’s how they stay alive.”
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