Wells pledges $20M to NY’s economic recovery
Wells Fargo is extending some extra relief to women, minority and other small business owners in New York’s low-income communities. The $1.97 trillion asset bank pledged up to $20 million to support the New York Forward Loan Fund (NYFLF) – an economic revitalization program initiated by New York Governor Andrew Cuomo to support multifamily and small rental property owners, businesses and nonprofits affected by the pandemic.
A group of financial institutions and partners, including Wells Fargo & Company, expect to raise a total of $100 million for NYFLF, which opened for pre-applications on May 26, 2020, but started purchasing its first loans in July, the bank said.
Wells Fargo is the largest lender and contributor “in this critical program”, said Vince Toye, head of Community Lending and Investment for Wells Fargo Commercial Real Estate, but its role is limited to funding the program.
Calvert Impact Capital, Local Initiatives Support Corporation (LISC), and Community Reinvestment Fund, USA – were the initial investors who helped establish the NYFLF seed fund.
Five Community Development Financial Institutions (CDFIs) are processing applications. NYFLF loans help with upfront business reopening costs such as inventory, marketing, or refitting for social distancing.
Through July 20, 2020, NYFLF has funded 19 loans across 11 counties totaling $602,103. Up to 17 of those loans went to women or minority-owned businesses and one to a veteran-owned business, all from different industries. The average loan amount was $31,690.
“As the largest provider of affordable housing debt and equity in New York City and New York State,” said Alan Wiener, head of Multifamily Capital for Wells Fargo Commercial Real Estate, Wells Fargo supports “this important initiative that offers much-needed credit to small businesses, landlords, and nonprofits” in the state that has been hardest hit by the pandemic.
Since the beginning of the health crisis, Wells Fargo provided substantial credit and liquidity to customers, and support to the communities, said Toye. “NYFLF’s goals align with wells Fargo’s other efforts to assist revitalization initiatives.”
Recent donations include Wells Fargo Foundation’s $175 million donation to support the economic recovery of vulnerable populations and funding of 50 million meals to Help Feeding America. The organization:
- Provided $10.1 billion in Paycheck Protection Program (PPP) funding to 179,000 small businesses, of which 84% had fewer than 10 employees, with an average loan size of $56,000.
- Will donate all $400 million processing fees from the PPP to the Open for Business Fund.
- Provided more than 1,100 nonprofits helping 100,000 renters and homeowners; and more than $17 million in relief to struggling self-employed and small business owners through grants to nonprofits, CDFIs that serve diverse entrepreneurs, and the Opportunity Fund.
- Offered over 2.7 million consumer, small business, and commercial borrowers, approximately 2.5 million payment deferrals for more than $5 billion in principal and interest payments, and waived 6 million fees exceeding $200 million through June 30.
Mortgages drive First Reliance’s Q2 income up 195.5%
Here is a “record mortgage revenues” success story. First Reliance Bank is celebrating the best quarter in the company’s 21-year history. The bank’s holding company, First Reliance Bancshares, Inc., reported its Q2 2020 net income increased 195.5% from Q2 2019, to $3.9 million.
Quarter results benefited from mortgage revenues of $8.1 million, which increased 350% compared to the same period one year ago.
After a successful financial performance in 2019, “First Reliance achieved record-setting net income of $3.9 million, or $0.49 per diluted common share,” a 206.3% increase over Q2 2019, said in a press release Rick Saunders, president and CEO of First Reliance. “This is the best quarter in the Company’s 21-year history, showing excellent loan growth, increased capital levels, higher liquidity levels, and record-setting mortgage volumes.”
Additionally, First Reliance completed the issuance of $5.5 million of subordinated debt “to be held at the holding company, with no immediate plans to inject into the Bank,” he said, and “strategically slowed loan growth, focusing on diversifying our revenue streams, growing our core deposit base, and eliminating unnecessary expenses.”
Also largely driven by the mortgage banking division, non-interest income increased $4.6 million, or 164.3% from Q2 2019, to $7.4 million. Mortgage production volumes reached $223 million in Q2 2020, up 193% from $76 million during the same period one-year ago.
“As mortgage rates reached all-time record lows, we saw unprecedented mortgage volume throughout our markets,” Saunders said. “Our mortgage team is working tirelessly to support the demand and help our customers with refinancing their homes, renovations, or new home purchases.” For Q3 2020, however, the company projects slightly lower volumes in the mortgage pipeline.
Quarter highlights include a provision expense of $1.2 million for Q2 2020 compared to $169,000 for Q2 2019; Total loan deferrals outstanding of $14.7 million or 2.9% of total loans; Strong asset quality, with a ratio of nonperforming assets to average assets at 0.21% and past due ratio at 0.34%; Total assets increased 20.2% to $763 million at Q2 2020.
On the weaker side, due to higher mortgage division operational expenses non-interest expense increased by 6%, or $396,000 for Q2 2020, compared to the same period one-year ago.
Expense control was and continues to be a strategic priority, the bank said. To increase operating efficiencies, in Q2 2020 the bank opened a new branch office in Winston Salem, North Carolina, but also consolidated its Charleston and Charlotte market offices and plans “continued focus” on building infrastructure that support future growth.
FHFA selects RiskSpan’s MBS analytics tool
Big data and big risks challenge businesses to upgrade to more complex, faster and easier to use software. The Federal Housing Finance Agency (FHFA) selected cloud platform Edge by RiskSpan to analyze Agency Mortgage Backed Securities (MBS) issued by Fannie Mae and Freddie Mac.
The Arlington, Va., based fintech, which developed Edge cloud, specializes in mortgage and structured finance product data, analytics and management for the residential mortgage, capital markets, banking, and insurance industries.
Edge hosts and manages approximately 13 billion loan records and 3.5 million securities, tracking securities performance history dating back over 20 years, according to the company website, to provide “deep analysis of loans and securities in support of trading, portfolio management and risk management.”
The Software–as-a-Service platform provides FHFA staff instant access to collateral backing Agency MBS. It delivers pool and loan-level data through portals powered with “advanced prepayment analytics across the mortgage securities spectrum,” the company said, via RiskSpan’s Application Programming Interface (API).
“We have been providing data services to the Agency mortgage market for more than a decade,” noted Don Brown, RiskSpan senior managing director. “As mortgage datasets become larger and more complex, we continue to evolve our offering to allow clients easy access to the tools and models necessary to make optimal use of all the data available.”
For example, embedded analytical tools enable users to create customized charts to compare performance across servicers, collateral, or other underwriting nuances; develop, modify, and quickly share queries; access Delinquency Transition Matrices for any Ginnie Mae cohort.