Replies to post #3152 on IndyMac Bancorp Inc. (fka IDMCQ)

[I Like Bottom Fishing]

We are now moving back up trend mode on the idmcq chart play.

note* idmcq indicators are turning up and heading north to a higher pps.

The Q stocks looks like they are ready to run again, Q penny stocks look like that are coming back to life in a strong way that FRNTQ did run top speed, and this IDMCQ has been consolidating for a long time now, well only time will tell, god bless and always the best of trading.

[I Like Bottom Fishing]

IDMCQ News Investors turn attention to stressed banks in
Minnesota: Regulatory requirements, however, are causing private equity firms to remain cautious.

Tuesday, August 18, 2009 4:13 AM

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News for 'IDMCQ' - (Investors turn attention to stressed banks in Minnesota: Regulatory requirements, however, are causing private equity firms to remain cautious.)

Aug 18, 2009 (Star Tribune - McClatchy-Tribune Information Services via COMTEX)
-- Minnesota's strapped community banks have been turning to their existing
shareholders to pony up more money to weather the economic maelstrom -- a sort
of pass-the-hat strategy, as one industry player said. But now outside
investors, including wealthy individuals, private equity firms and investment
groups, are buying in.

The nascent interest in local banks comes after national mega-deals to rescue
insolvent banks earlier this year. Private equity groups bought Miami's
BankUnited Financial Corp. in May, and Pasadena, Calif.-based IndyMac Bancorp in
January, after the Federal Deposit Insurance Corp. (FDIC), struggling with a
wave of bank failures, opened the door last fall for nonbank buyers to bid for
the failed banks.

"There is a great deal of interest to replicate that here," said Karen
Grandstrand, head of Minneapolis-based Fredrikson & Byron's 25-member banking
team, whose clients include community banks.

Two Minnesota banks have failed since the current banking crisis: First
Integrity in Staples and Horizon Bank in Pine City. Other banks purchased both.

That pattern may soon change. Private investors view the bank industry as
undervalued now, Grandstrand said.

She said she's handling a half-dozen equity deals where outside private
investors -- not existing bank shareholders -- are taking minority or
controlling stakes in local community banks and, in at least one deal, are
planning to buy the bank outright. Grandstrand won't name names, but she said
the deals range from $200,000 to $25 million and involve local and out-of-town
investors.

"Equity has been sitting on sidelines waiting until they have a good sense that
the economy has bottomed out so they can time their entry," she said.

Grandstrand said she's noticed a change in confidence just in the past few
weeks, with investors buoyed by better-than-expected jobs numbers.

A quick survey of Twin Cities' private equity firms suggests that very few have
the appetite or experience to enter the banking game.

George Hicks, co-founder of Bloomington-based Varde Partners, which buys
distressed debt, said Varde has participated in some of the loan auctions the
FDIC holds several months after a failed bank closes. Buying banks outright, he
said, isn't really their business. Still, he's keeping his eye on the situation,
he said.

So is an independent investment group called the Opportunity Partners. The real
estate investment group, formerly called the Condominium Opportunity Partners,
has more than a dozen investors. Among them are Kim Culp, a veteran banker who
runs the Excelsior Group, a real estate investment company in Minneapolis; bank
holding company Highland Bancshares in St. Michael, and Kirt Woodhouse,
president of Sterling Group Inc., a real estate company in Golden Valley.

Opportunity Partners has broadened its scope to include all distressed real
estate, Woodhouse said, but remains focused on real estate-backed assets, not
entire banks. The group has a letter of intent to buy a real-estate-backed loan
from a local bank.

"We're making it known to the banks that we have cash available, and banks are
contacting us," Woodhouse said.

Bob Rinek, a managing director of Piper Jaffray & Co. in Minneapolis, said he
thinks most local private investors are still mulling the situation, and are
focused more on buying the individual distressed assets.

"They're studying it, but they're not quite sure what the rules are ultimately
going to be and they're not quite sure they want the government as a partner,"
Rinek said. "Everybody's a little bit nervous about doing it. They're not real
sure what the prices should be. The market has not been as fluid and as
efficient at the small-bank level."

A legal hurdle

Private investors have argued that the Bank Holding Company Act presents a
formidable obstacle. Under the act, any company owning 25 percent of voting
securities in a bank becomes a bank holding company, which means it's subject to
oversight, can't have investments in nonfinancial companies, and must maintain
certain levels of capital, among other things.

"Private equity generally doesn't want to be a bank holding company," said
Michael Carlson, partner with Faegre & Benson's financing and restructuring
group in Minneapolis.

The FDIC, the industry-funded agency responsible for protecting the depleted
deposit insurance fund, is keen on getting more private investors involved in
buying insolvent banks. But it's also wary of trouble, and last month proposed
new investment rules that have some private equity players choking. One of the
rules would require private equity buyers to maintain a Tier 1 leverage ratio of
at least 15 percent for three years, which is three times the ratio that banks
currently must maintain to be considered well capitalized.

A Tier 1 leverage ratio is the bank's core equity capital divided by its total
risk-weighted assets -- a key measure of a bank's financial strength.

"To me that's the largest inhibitor," said Thomas Chen, head of the financial
institutions investment banking group at Piper Jaffray in New York.

Judging from comment letters filed with the FDIC, the American Bankers
Association finds the proposed rules "inappropriately restrictive." The
Independent Community Bankers of America, which typically represents smaller,
more rural banks, supports them. Two major labor unions have written to support
the rules.

Private equity players charge that the FDIC can ill afford to tighten rules at a
time when it needs all the help it can get to deal with mounting bank failures.

And some bankers agree. In a July 23 comment letter to the FDIC, Judy Thorp, a
senior vice president with American Marine Bank in Bainbridge Island, Wash.,
pointed out that when the FDIC solicited bids for Minnesota's Horizon Bank from
547 bidders, it got only a single bid -- from St. Cloud-based Stearns Financial.
"Do you think these numbers will improve with additional limitations?" she said.

The FDIC has yet to finalize the suggested rules. But the proposed regulations
could mean that bankers will remain the primary shoppers for the troubled banks
in Minnesota.

Bankers such as John Morrison. Morrison, the 72-year-old president of
Stillwater-based Central Bank, estimates he's bought as many as 50 banks in his
career. He's shopping again, he said. His bank has been approved to bid on banks
in Minnesota, Montana, Florida and Colorado, he said, but his main interest is
in Minnesota, surrounding states and Florida.

"We're just trying to grow our business," Morrison said.

Jennifer Bjorhus --612-673-4683



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Jennifer Bjorhus


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