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VOL. 126 | NO. 114 | Monday, June 13, 2011


Local Companies Working to Navigate Economic Straits

By Andy Meek

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The financial services business seems like a tough one to be in these days.

Investors have for the last few weeks treated bank stocks like the piñata of Wall Street. Bankers, attorneys and investment professionals have boiled a massive government overhaul of the country’s financial regulations down to clipped phrases like “finreg” and “Dodd-Frank” that they speak of often with a grumble or a shaking of the head.

Oh, and there’s that army of state attorneys general, gunning for the country’s biggest banks to pick up the tab stemming from the nation’s foreclosure crisis, which has kept investors and analysts fretting about other shoes yet to drop.

Needless to say, the bankers, accountants, tax professionals, financial advisors, bond salesman, equity research analysts and others who make up the field in Memphis have had a tough space to operate in for the last few years.

Here’s a brief roundup of what some of them are doing – and how they’re doing it.

2010 was another banner for the Longleaf Partners Funds, a widely respected family of mutual funds managed by Southeastern Asset Management Inc. At the annual presentation to the funds’ shareholders this month at Theatre Memphis, Mason Hawkins – who has been referred to in the financial press as the Warren Buffett of the mutual fund business – said stock price volatility last year did not mark an automatic end to the “good returns” of the Longleaf funds.

In 2010, all three funds saw returns that exceeded their goal of inflation plus 10 percent.

“We’ve communicated many times that we believe there are six fundamental requirements to becoming a successful long-term investor,” Hawkins said at the meeting.

He listed them as being a road map for good decision making; an extensive search strategy; the ability to value businesses, assess managements and weigh corporate competitive advantage; the discipline to say no to non-qualifiers; patience to wait for the right opportunity; and the courage to make significant investment at a point of maximum pessimism – “or, when no one agrees with you.”

“Volatility produces opportunity,” Hawkins said. “2010’s volatility not only helped us deliver good results last year, it permitted us to build a stronger foundation for future returns.”

In other news across the financial spectrum in Memphis, Summit Asset Management – a registered investment advisor founded in 1991 and independently owned and operated by lifelong Memphians – celebrates its 20th anniversary in 2011.

• Shoemaker Financial should begin rebuilding in a couple of weeks the company’s office space in Germantown that was damaged by a fire in October, according to founder Jim Shoemaker.

A $1.5 million building permit for Shoemaker’s new office has been filed.

The firm showed its resilience early after the crisis – as in, the next day. The day after the fire, Shoemaker was already receiving and placing orders again in a re-jiggered office setting.

Congratulations are in order to several financial professionals and firms. Bill Sipes of Sipes and Seaton CPA firm has been appointed to the American Institute of Certified Public Accountants National Credentials Committee for the Accredited in Business Valuation credential.

As The Daily News reported Friday, June 3, Independent Bank, the second-largest bank based in Memphis, has been ranked among the top 100 best-performing community banks in the country for 2010, according to SNL Financial. Independent also is in talks to put a retail branch inside One Commerce Square and to put Independent Bank signage on the outside.

• Adams and Reese LLP has been selected “Project Finance Law Firm of the Year – USA” and “Banking and Finance Firm of the Year - USA” by Finance Monthly Magazine. In the last few years, Adams and Reese transaction attorneys have been involved in project and bank financings in excess of $15 billion.

Only a few weeks ago, a merger became official that combined one of the largest accounting firms in Memphis with a large Virginia-based accounting firm.

The firms Dixon Hughes PLLC and Goodman & Company LLP have combined to form Dixon Hughes Goodman LLP, with the new entity employing more than 1,700 people in 30 existing offices throughout 11 states and Washington.

Magna Bank has sought approval from the U.S. Treasury to pay back another chunk of the nearly $14 million in Troubled Asset Relief Program funds the bank accepted in 2008, a sign of optimism for the local community bank.

• Wunderlich Securities in Memphis, along with its founder and chief compliance officer, recently submitted offers of settlement to the U.S. Securities and Exchange Commission in response to a cease-and-desist order from the SEC.

The regulatory agency said Wunderlich committed a number of infractions including overcharging some investment clients and making commissions off clients that weren’t disclosed.

According to the agreement, the firm will set aside $369,000 to repay overcharged clients. That does not include civil penalties that will be paid by the firm and the two executives, Tracy Wiswall and Gary Wunderlich Jr.

Meanwhile, Wunderlich has added six institutional fixed-income professionals over the past two months, continuing a growth streak for the firm that’s seen multiple offices open within the past year and scores of new employees hired.

Charles Burkett, president of banking at First Tennessee, is retiring at the end of this year.

He’s stepping down as banking president at the end of this month.

His career with the bank began in 1970. His leadership roles have covered the areas of personal banking, retail credit, installment and credit card loan administration, small business lending, trust, investments, insurance and financial planning.

His departure comes at the same time as a management shakeup is reshaping First Tennessee’s future, as well as that of its parent company, First Horizon National Corp.

PROPERTY SALES 51 180 16,377
MORTGAGES 21 57 10,144
BUILDING PERMITS 103 665 39,209
BANKRUPTCIES 31 107 7,704