Michael Mayo, one of the banking industry’s top analysts, told the Senate Banking Committee recently that companies continue to hide information from certain people, including bearish analysts, despite a fair disclosure regulation that the Securities and Exchange Commission intended to end that practice.
Important, or what the SEC calls “material,” information has been disseminated more fairly because of the new rule, but Mayo said other information that helps analysts flesh out the condition of a company, but does not rise to the level of “material information,” is more difficult for bearish analysts to access.
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His phone calls to companies are sometimes returned late or not at all.
“Bullish and conflicted analysts get their calls returned first, and even get senior executives on the line, including the CEO,” Mayo testified. “As for objective and critical analysts, at times their calls are not even returned.”
Mayo said the lack of access has made him and his colleagues at Prudential Securities Inc. “better analysts.” They have to look more closely at accounting footnotes, talk to “impartial” third parties and “go out and kick the tires” now to evaluate how a banking company is faring.
Loan levels: Bank One made 2,294 mortgages in low- and moderate-income neighborhoods during 2000, giving it 7 percent market share in those areas, more than any other lender.
LaSalle Bank followed closely with 1,865 such mortgages and 5.7 percent of the market. The third-biggest mortgage lender in Chicago’s poorer neighborhoods was Seattle-based Washington Mutual Bank, with 1,538 and 4.7 percent of the market, according to a new study from the National Training and Information Center in Chicago.
The center wanted to determine how many of the top mortgage lenders in those communities were so-called “subprime” lenders, which cater to people with sparse or spotty credit records.
None of the top three are subprime lenders. But the next three largest lenders to Chicago’s poorer communities in 2000 did make subprime loans, along with some prime loans: NationsCredit Financial Services, with 2.7 percent of the market; Chase Manhattan Mortgage Corp., with 2 percent; and CitiMortgage Inc., with 1.7 percent, according to the center.
For the study, the center used mortgage data filed by lenders under the Home Mortgage Disclosure Act.
The group defined low- and moderate-income neighborhoods as those whose residents’ incomes are 80 percent or less of Chicago’s overall median family income.
Bank notes: Sarah Vega, director of the Illinois Department of Financial Institutions, was appointed to the board of the Federal Home Loan Bank of Chicago, one of twelve regional banks created by Congress to provide housing finance to financial institutions in Illinois and Wisconsin.
Banco Popular appointed Javier Ubarri as new region executive for Chicago. Banco Popular is based in Puerto Rico but has its U.S. headquarters in Chicago.