FSG CEO Says Banks More Important Now Than Ever

Saturday, December 07, 2013
Michael Kramer
Michael Kramer

FSG Bank CEO Michael Kramer told members of the Civitan Club on Friday that banks are more important today than ever - now that many other type lenders have gone away.

"Most non-bank lenders are gone," he told club members at the luncheon at the Bessie Smith Hall.

As a result, he said there is fierce competition between community banks to lock down new loan accounts.

:"I have never seen the lending market so competitive," he said.

Mr. Kramer said he may "give" in negotiations with potential borrowers on rate, "but not on credit."

He said one sour $250,000 loan can have a significant effect on the bank's bottom line.

Coming to FSG Bank in December 2011, he said the bank had accumulated a huge amount of bad loans. Writing them down cost bank shareholders millions of dollars, he said.   

Mr. Kramer said when the reserve ratio of a bank drops as low as two percent, it is in danger of being taken over by regulators. He said FSG got that low at one point, but, with an infusion of cash from new investors, is up to an 8.4 percent ratio.

He said bank "branches" are not so important in the age where many do their banking online and never visit a bank of any type.

Mr. Kramer said a bank now considering a new branch would go for one with about 1,500 square feet and three drive-thru lanes. Years ago, he said the bank would have been designing a branch with 4,000 square feet.

He said banks are scrutinizing loans much more carefully, but he said the cartoon showing the banker requiring a 300 percent down payment is not accurate. In fact, he said he worries that banks are again becoming too lax in credit checks, which he said could lead to new problems.

Mr. Kramer said the Small Business Administration has improved in recent years and it now operates closer to a business. He said many banks partner with the SBA and with the USDA.

He said, contrary to media reports, the federal government and taxpayers did not get soaked under the TARP program in which there were major cash infusions to troubled banks. He said the government wound up with a tidy profit. 


FRA’s National Private Investment Fund Due Diligence Summit to Feature Two Decosimo Principals

Decosimo, a Top 100 accounting and business advisory firm, will serve as the lead sponsor for the Private Investment Funds Due Diligence Summit to be held at the Princeton Club in New York City on  Sept. 22-23 . Hosted by Financial Research Associates, the conference will be chaired by Decosimo’s Domestic and International Principal Karl Jordan, CPA, CGMA. Decosimo Assurance ... (click for more)

Learning Blade To Compete In 24 Jobs Madness Contest

Innovate+Educate’s The Close It Summit announced Monday the top 24 contestants for their national Jobs Madness contest to find the best ideas in the country working to solve the skills gap and bridge the opportunity divide. “Jobs Madness was created to raise awareness of and elevate the newest, brightest and most disruptive ideas out there that we may not yet have known about,” ... (click for more)

City Receives $400,000 Federal Grant To Study Passenger Train Service

The United States Department of Transportation has announced Chattanooga has received a $400,000 Transportation Investment Generating Economic Recovery (TIGER) grant to study the potential use of existing railways for a passenger rail system in Chattanooga. There were 72 awards announced in 46 states and Washington, D.C. Out of numerous grant applications across Tennessee, ... (click for more)

Former Assistant Police Chief Eidson Not Charged In Shooting Of Stepson On Englewood Avenue

Former Chattanooga Police Department Assistant Chief Kirk Eidson was not charged in the shooting of stepson Robert Ingle, 18, on Sunday morning in North Chattanooga. However, Ingle was charged with domestic assault and vandalism. In the incident shortly after 9 a.m. at 1049 Englewood Ave., Mr. Eidson said Ingle came to the house asking him to take him to their other house ... (click for more)

Dirt Decision At Camp Jordan May Come Back To Haunt East Ridge Councilmen

Wow. I thought the arrival of Bass Pro Shop would help bring East Ridge back to a position of prominence in the Chattanooga area, but the Council proved otherwise last night.  To the council - There is a reason that the developers want that dirt: It's valuable . You currently own it and the developer wants it. Bass Pro has already agreed to set up shop. They were going ... (click for more)

Roy Exum: Goodbye To My Scooter

The month of August turned out to be unkind, with my dog, my favorite aunt and my magnificent mother all dying within three weeks’ time. As I finally begin to push out the three newest dents in my soul, my habit has been to write something akin to a goodbye note to those I have loved. I’m not ready for Aunt Martha and Mother yet – not by a stretch -- but I remembered Scooter with ... (click for more)