The Charlotte Observer from Charlotte, North Carolina • 34

2D Thursday September II 2008 BUSINESS charlotteobservercom The Charlotte Observer Customers learn of information breach link Notes Countrywide Financial: Ex-worker might have sold account details because of the federal investigation She said there has been no evidence that the customers have been victims of identity theft or fraud Countrywide told customers it will monitor their mortgage accounts for suspicious activities and it offered to pay for two years of credit monitoring by an outside company "We value our customer relations so much and keeping customer information protected is a top priority" Martin said mortgage division last month and charged him with "exceeding authorized access to the computer of a financial institution" Investigators say Rebollo admitted to giving out customers' account information to third parties over two years He estimated that he profited by as much as $70000 on the sales the FBI said He has pleaded not guilty the charge carries up to five years in federal prison Countrywide a California mortgage company that was bought by Charlotte-based Bank of America Corp this summer sent letters to customers including some in Charlotte whose accounts might have been available to The FBI says he was terminated by Countrywide in July Susan Martin a spokeswoman for Countrywide said the company alerted the FBI when it noticed the breach She said she couldn't specify how many customers might be involved Boftv Loan losses 'will probably deepen' Bank of America Corp's investment banking executive said Wednesday that the Charlotte company's loan losses from homebuilders and other borrowers will probably deepen in the third quarter Brian Moynihan speaking at a financial services conference in New York said loans to homcbuilders and other industries related to residential real estate were his division's main source of problem assets "It's not pretty" he said but added "this is not a number that 4 4 creates major pain for us" Moynihan Moynihan the president of global corporate and investment banking noted that Bank of America is exposed to the struggling auto industry in the Midwest due to its purchase of LaSalle Bank He said he expects his division to invest in more international ventures such as European health care and to increase its presence in equity markets and mergers and acquisitions His division has cut 3400 jobs or 15 percent of its positions since October The conference was hos'ted by Lehman Brothers which that same day reported a dismal quarterly loss and said it might put itself up for sale CHRISTINA REXRODE BofA agreement The bank will buy back about $48 billion in securities from retail small business and charitable organizations The securities must have been purchased before Feb11 The buyback will occur between Oct 1 and the end of the year The bank will compensate eligible customers who sold such securities at a loss before the settlement Bank of America will participate in arbitration for customers who say they have damages beyond the inability to access their money Bank of America will refund fees that municipalities paid to refinance auction-rate securities that they had issued This applies to refinancings after Feb II For more information go to wwwbarkfamericacom and select "investment services" BofA agreement The bank will buy back about $48 billion in securities Carolinas Roundup Treecom chief invests in company shares Doug Lebda chief executive of Charlotte-based online lending marketplace Treecom Inc is investing more than a million of his own dollars in the company Treecom formerly known as LendingTree had been owned by IAInteractive Corp but IAC decided last year to spin off the Charlotte- 1 based LendingTree Lebda founded the compa- -4- ny before IAC bought it in 2003 Treecom Inc became a stand-alone compaJ ny Aug 21 and since then Lebda has spent lebda $113 million buying up 144331 of its shares much of it through a family trust according to securities filings He bought the shares on five separate days paying between $744 and $823 per share The company has about 166 million shares They closed at $770 on Wednesday down 3 percent CHRISTINA REXRODE CHS plans to build Concord rehab center Carolinas Health Care System has announced plans to build a 40-bed rehabilitation center on the campus of Carolinas Medical Center-NorthEast in Concord Beds will be moved from three other facilities Ten will come from Carolinas Rehabilitation and 20 from CMCMercy both in Charlotte Ten more will come from Stan ly Regional Medical Center in Albemarle which formed an alliance with Carolinas Health Care last year The new rehab center will serve residents of Cabarrus Rowan Stan ly and Iredell counties and will be similar to an outpatient rehab center that CHS opened last October in Mount Holly CHS a public not-for-profit organization is among the nation's largest health-care organizations with hospitals medical offices nursing homes and other medical offices in both Carolinas It spent $361 million on capital projects in 2007 the highest ever for a single year and expects even greater capital expenditures this year according to a report released at the hospital board's quarterly meeting Tuesday The Charlotte-based hospital system recently won state approval for a $174 million expansion of CMC-Pineville an $85 million replacement hospital for CMC-Lincoln $43 million in operating room projects at CMC-NorthEast and Carolinas Medical Center in Charlotte and four freestanding emergency rooms in Waxhaw Harrisburg Kannapolis and in the Steele Creek neighborhood of Charlotte KAREN CARLON BY CHRISTINA REXRODE crexrodecharlotteobservercom Some customers of Countrywide Financial Corp are learning that their personal information might have been sold by a former employee The Los Angeles division of the FBI arrested Rene a former financial analyst for Countrywide's subprime SECURITIES from ID money-market-like and that customers were not aware of the increasing risk they faced Other banks faced similar allegations The deal covers all the securities that retail and certain small business and charitable investors haven't been able to sell Bank of America which neither admitted nor denied wrongdoing said the offer will cover about 5500 customers The bank said it continues to cooperate with investigations by the SEC and the New York attorney general's office As the probes intensified last week the bank said it was ready to settle and that it had thought it had an agreement weeks earlier The bank said the Massachusetts settlement didn't come with a fine BANK from ID In this deal American Community shareholders get either $1235 in cash per share or 08517 Yadkin Valley shares although only 195 percent of the total deal can be paid out in cash American Community shares jumped 50 percent after the transaction was announced closing Wednesday at $1051 In the past year the shares have traded between $450 and $13 Yadkin Valley shares however dropped 26 percent to $1254 on the news Its shares have traded between $985 and $1790 over the past year American Community chief executive Randy Helton 4 II said he has long Helton known Yadkin Valley counterpart Bill Long and that talks started heating up this summer In the past year a large shareholder had publicly pushed for a sale but Helton said the deal wasn't the result of that pressure or any problems at the bank "We're always looking at strategic opportunities" Helton said "They gave us a very RACING from ID tators today and Friday and as many as 30000 a capacity crowd Saturday and Sunday About half will stay in hotels accounting for the bulk of visitor spending at more than $250 a person per day according to projections Such estimates are far from an exact science and the NI IRA's economic impact pales in comparison to the more than $100 million from a Sprint alp race weekend which can draw well over 150000 fans to Concord Still the NHRA is "bigger than you might think" said Tom Compton the racing organization's president While drag races last only a few seconds with cars screaming down a straightway compared with NASCAR races that run a few hours there are contests throughout the day In addition fans can get closer to drivers and crews because each ticket is a pit pass Attendance at races grew by more than 10 percent nationwide last year Compton said and fans spend three to five days at events "The qualifying days are just as popular as race days" he said "With Charlotte being a midsize market (the event) should have a noticeable im mit the bids that reset the interest rates If there are not enough bids to cover the securities for sale then the auction fails and the investors cannot access their principal Charlotte investment bank McColl Partners founded by former Bank of America Corp CEO Hugh McColl jr advised American Community on the sale as it did on the First Charter deal The head of the firm's financial institutions group Charlie Welch led the transaction but McColl also offered advice putting him in the unusual position once again of selling a Charlotte bank instead of expanding one Of four Charlotte banks that opened in the late 1990s including First Commerce (which sold to Bank of Granite in 2003) only First Trust re mains indepenMad dent Another round of banks opened in Charlotte this decade but none of them has been purchased First Trust CEO Jim Bolt said he couldn't comment on the possibility of a sale but noted his bank has stuck to its plan of serving businesses and professionals and has posted double-digit annual returns Charlotte remains a strong market and his bank can benefit when customers and employees are disrupted by competitors' mergers he said "It's certainly an opportunity for us" he said "Maybe they're FedExing something back home Sometimes cars break down" she said "Those are the type of expenditures that occur" Jefferson George: 704-358-5071 Bank of America said it expects to take a pretax charge of about $275 million in connection with the purchase of the securities from retail clients This mostly stems from the difference between the purchase price and the estimated value of the securities Last month Charlotte-based Wachovia Corp agreed to buy back up to $88 billion in auction-rate securities to settle an investigation involving the Missouri secretary of state New York Attorney General Andrew Cuomo and the Securities and Exchange Commission Wachovia which neither admitted nor denied wrongdoing also agreed to pay $50 million in fines and could face SEC penalties depending on the success of the buyback program Citigroup Inc UBS IPMorgan Chase Co and Morgan Stanley Co also have settled with regulators attractive price for our shareholders" Long the Yadkin Valley CEO said he has long eyed the Charlotte market because it was growing faster than his territory to the north He also liked American Community's financial numbers including its loan quality he said "The way we look at mergers is that we find banks that are not broken" he said Long said both banks are likely to take hits on preferred shares of Freddie Mac and Fannie Mae that they own but he said that didn't play a 'role in the deal The shares in the mortgage giants now under government control have lost value causing problems for many banks that hold these investments The American Community purchase is expected to be completed no later than early next year The bank will continue to operate under its own name Yadkin Valley has preserved the brands of other banks it has bought but regularly considers whether to switch to one uniform name Long said Helton 53 will remain a director but step down as an executive After three decades in banking he said he doesn't know what he will do next As of a filing in April he held pact" The NI-IM Carolinas Nationals arrive amid renewed squabbling between Bruton Smith owner of Lowe's Motor Speedway and Concord and Cabarrus officials over $80 million in incentives for the dragway and improvements to the speedway and nearby roads Local leaders saying the roadwork will benefit the public as well approved the incentives last fall after Smith threatened to move the speedway from Concord because of a dispute with the city over plans for the drag strip In exchange for incentives Smith said he would build the $60 million strip and make $200 million in speed- way upgrades Last month 4 the city and ie county told Smith that it could take up to Smith 40 years to reimburse Smith's company Speedway Motor-sports for fronting the cost of $60 million in road and other improvements Smith countered last week with a plan that compensated him in three years and gave him interest if payments took longer than thatWhatever happens the drag strip is finished and ready to host the NI-IRA Seats for Saturday's session are sold out 1r Morningstar expanding reach in Southeast Charlotte-based Morningstar Properties EEC and Harrison Street Real Estate Capital have formed a strategic alliance with 2Guys Storage EEC to invest in self-storage properties in the Southeast The companies plan to acquire develop and redevelop a portfolio of real estate assets valued at more than $100 million over the next three to five years DOUG SMITH Auction-rate securities are bonds with interest rates that reset periodically They can be issued by municipalities hospitals and other entities Banks and brokerage firms package them to sell to the public and they can also sub 145812 American Community shares worth about $15 million at Wednesday's close Mark De Marcus American Community's chief banking officer will become market president after the deal closes Yadkin Valley expects to cut American Community's expense base by 30 percent but Long said the bank hasn't determined how many jobs will be lost American Community has about 125 employees Yadkin Valley won't close any branches and expects to eventually build new ones Long said Chris Marinac who follows banks stocks for FIG Partners in Atlanta said American Community got a good price showing the value of a solid deposit base in the current banking environment The merger market has been slow lately but in this case American Community's board was proactive and "the right party stepped up" he said The deal gives Yadkin Valley the opportunity to expand down Interstate 77 including untapped SC markets Marinac said The deal follows Scottish Bank's sale to Columbia SCbased SCBT Financial Corp and First Charter Corp's takeover by Cincinnati-based Fifth Third Bancorp speedway officials said and only a few tickets remain for Sunday Officials eventually hope to hold at least one big event each month at the dragway then fill other weekends with amateur races car shows and smaller events Without question though this weekend's event is aimed at adding Concord and the Charlotte region to the ranks of communities that have benefited from NHIZA crowds in recent years After Smith bought the Bristol Dragway in northeastern Tennessee in the 1990s the MIRA brought a Nationals event to the venue in 2001 and has since drawn as many as 70000 over the long race weekend About 65 percent of those fans come from more than 100 miles away according to a 2004 economic impact study "We've always had a lot of response" from race fans said Beth Stockner a spokeswoman for the Bristol Convention and Visitors Bureau "It usually does fill up our hotels" Beyond food and lodging race fans also need other services while visiting the area which helps local businesses and generates more tax revenue said DeSales Wagster president and chief executive officer of the Cabarrus County Convention and Visitors 501 6or12 fliontbCD Interstate First Financial of Charlotte 15720 John Delaney Dr Suite 300 9am By Appointment 50 CD rcetru 1 I I EIS 3 Month CD 1 877 435 Ask Us About our Specials for -fotalinalloitviscit 04 illek FDIC Insured knot Percentage Vos Id (WV) $100001nonimurn deposit Yield and deposit amount sioct might Penalty lc( early voCidrawal 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