News and Finance

This is a weekly roundup of promotions, appointments and employee accomplishments in the Birmingham metro area. For more People on the Move, check out the Birmingham Business Journal’s print edition each week. Send announcements to ccrawford@bizjournals.com.

CONSTRUCTION

A Gulf South chapter has formed of the International Concrete Repair Institute to serve the regions of Alabama, Mississippi and the Florida Pan Handle. Founding members of the board of directors are President Bryan Wood of Sutton Kennerly & Associates in Bessemer; Vice President Tony Spencer of Steelcon Coating Systems Inc. in Jasper; Treasurer Dale Sloman of Birmingham Industrial Construction; Secretary Tim Holmes of Carboline Co. in Birmingham; Buck Buchanan of Gulf Atlantic Floors in Madison, Miss.; Allen Cook of Performance Sealants and Waterproofing in Montgomery; Michael Davis of Structural Design Group in Birmingham; Mike Laughlin of Ready Mix USA in Birmingham; Steve Lemay of Sherman Industries / Lehigh Cement in Birmingham; Steve Shanks of MBA Structural Engineers in Birmingham; Tyler Pitts of Pitts Construction Inc. in Mobile; and Gary Whitfield of Bonsal America in Leeds.

FINANCIAL

BAI named BBVA Compass’ Rick Claypoole the BAI Maverick Banker of the Year. The award recognizes Rick’s role as the designer of the innovative and popular Build-to-Order checking account for the Birmingham, AL-based financial institution. Claypoole, director of consumer deposits for BBVA Compass, received the honor at the annual BAI Mavericks in Banking executive forum held in Washington, D.C. Claypoole joined BBVA Compass in 2006.

LEGAL

Birmingham Bar Association Young Lawyers Section has partnered with Birmingham Pledge, Birmingham City Schools and the YWCA of Central Alabama for Law Week May 3-7. Young Lawyers who participated were Hayes Arendall, Steven Brom, Jason Bushby, Kim Byram, John Camp, Holly Clemente, Erin Corbally, Jessica Davis, Tiffany deGruy, Lauren DeMoss, Tyler Forsythe, Charles Greene, Lauren Goodman, Josh Hornady, Matt Keenan, Debra Krotzer, Robin Beardsley Mark, Stephanie Mays, Jenny Miller, Anil Mujumdar, Andrew Nix, Josh Payne, Carin Pendergraft, Kelly Roney, Lauren Shine, Katie Taylor, Emily Tidmore, Ethan Tidmore, Rachel VanNortwick, Jose Vega, Josh Wilson and Cinda York.

J. Fred Kingren, a partner at Hand Arendall LLC, was recognized as the 2010 Distinguished Accounting Alumnus award by Beta Alpha Psi, an accounting honor society at Samford University’s Brock School of Business. Kingren concentrates his legal practice in the general business, finance, securities law, mergers and acquisitions and taxation areas. He also helps guide businesses from their early stages of development through their evolution into more mature businesses and ultimately their eventual transition in ownership.

MEDIA

Regional best-selling author and Birmingham native David H. White released his fourth book “A Stroke of Genius.” The book was inspired by White’s years as a sports writer in Alabama and North Carolina. “A Stroke of Genius” is White’s fourth book.

NONPROFITS

Barry Tollison, a disabled Birmingham native, formed the nonprofit Crystal Falls to help disabled individuals in the greater Birmingham metropolitan area pay for food, shelter, clothes, utility bills or medical bills.

PLANNING

The American Institute of Certified Planners inducted city planner Gary M. Cooper of Birmingham into AICP’s College of Fellows at a recent ceremony held in conjunction with the American Planning Association’s 2010 National Planning Conference in New Orleans. Cooper, who has been a leader in urban planning during the course of his 50-year career, was recognized as an AICP Fellow for distinction in professional practice. He is noted for crafting one of Alabama’s first greenway plans, reshaping development standards despite builder opposition after Hurricane Frederic leveled most of the development in Gulf Shores in 1979 and participating in Alabama’s first industrial heritage plan. During his career he also has created state and regional planning agencies in Alabama, North Carolina and South Carolina and prepared hundreds of comprehensive development plans and implementation strategies.

PROFESSIONAL SERVICES

John Cotton, CEO of BestBIZ LLC, recently launched Gold Star Customer Service Certification at www.bizinnercircle.biz.

RETAIL

Michael McAbee, vice president of merchandise planning and replenishment at Hibbett Sports Inc., is a recipient of the annual SGB 40 Under 40 award, which is given to some of the brightest young stars in the sporting goods. He also won Hibbett’s Newsome Achievement Award in 2009.

REAL ESTATE

Daniel Samford, president of Samford Properties LLC, was awarded the Certified Commercial Investment Member designation by the CCIM Institute. Samford was among 272 commercial real estate professionals who earned the designation by passing the CCIM Comprehensive Examination.

Jerry L. Grant and Alicia M. Teed of Daniel Corp.’s Daniel Realty Services LLC were awarded the Certified Commercial Investment Member designation by the CCIM Institute. Grant is the office leasing manager and Teed is senior property manager.

UNIVERSITIES

Richrd Marchase, University of Alabama at Birmingham’s vice president for research and economic development, was recently given the American Association of Anatomist’s 2010 A.J. Ladman/Wiley Exemplary Service Award. The award recognizes an AAA member distinguished in the field of anatomical sciences who has provided exceptional service to the society. As Federation of American Societies for Experimental Biology president, Marchase advocated for NIH and NSF funding and an early, vocal supporter of funding for NIH on the supplemental and stimulus appropriations bills.

UTILITIES

The Alabama Power board of directors recently elected new officers. Myrk Harkins was elected vice president with responsibility for Corporate Real Estate. Harkins previously served as assistant to the vice president Corporate Real Estate. Bob Weaver was elected vice president with responsibility for Corporate Services. Weaver previously served as assistant to the executive vice president. He joined Alabama Power in 1980 in human resources. Richard Hutto was elected vice president with responsibility for the Southeast Division based in Eufaula. Hutto previously served as Alabama Power’s manager of budget and regulatory planning. He began working with Alabama Power in 1980 as a cooperative education engineering student in power delivery. Mark Crews was elected vice president with responsibility for the Western Division based in Tuscaloosa. Crews comes to his new position from serving as director of external affairs with Southern Co. Services in Atlanta.

Source

nFinanSe reported a net loss of $2.7 million, or 23 cents a share, for the 13 weeks ended April 3, compared with a net loss of $3.4 million, or 36 cents a share, in the same period a year ago.

Revenue for the first quarter of 2010 was $54,692, a filing with the Securities and Exchange Commission said. That included amortization of $30,000 of marketing funds paid to a national retailer.

The company said in its filing that it is required under generally accepted accounting principles to reflect the amortization expense as a contra-revenue item in its financial statements.

For the year-ago period, the company said it had gross revenue of $24,346, but revenue fell to a negative $5,654 after including the marketing expense.

nFinanSe (OTCBB: NFSE) is a financial services company headquartered in Tampa that provides stored value and prepaid cards.

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Tech industry leaders nationwide are optimistic about the country’s economic direction and see 2010 as a year of improvement, according a study from DLA Piper.

About 69 percent of those surveyed see the economic recovery building slowly as the year wears on, and 73 percent expect to see more companies partake of initial public offerings.

The study, released Friday, queried hundreds of CEOs, CFOs, venture capitalists, entrepreneurs and others in the technology sector.

While tech leaders are becoming more bullish on a rebound, they are divided on whether the markets have changed enough to affect future IPOs, mergers and acquisitions. About 24 percent said it will produce less funding, while 38 percent each said it would have no impact or that the market would adapt.

Sixty percent said the national debt would hamper the country’s ability to compete globally no fax pay day loan.

Half of those surveyed are not fond of government intervention, saying the effects of stimulus spending and more regulation would be a negative on their business, while 46 percent view it as a positive because government regulation will spur new technology or new industries.

Social networking drew mixed results, while cloud computing drew more positive responses. About 47 percent said their websites will continue to be plagued by poor monetization strategies, while 32 percent see consolidation in their future.

Cloud computing adoption will continue in earnest, according to 56 percent of respondents, while 49 percent said security concerns will be the biggest hindrance to its adoption.

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Baker Hughes Inc. has won a trade infringement lawsuit against Varel International Energy Services over a drill bit design.

Houston-based Baker Hughes (NYSE: BHI) was the plaintiff against the Dallas-based drill bit maker, alleging the company copied one of its designs.

According to a statement by Baker Hughes' representing law firm, Locke Lord Bissell & Liddell LLP, Baker has been awarded "several million" dollars in damages.

Michael Sutton of Locke Lord Bissell & Liddell's Houston office led the team representing Baker Hughes. Sutton is a partner at the firm and co-chair of its intellectual property department.

Earlier this year, Ion Geophysical Corp. was awarded a $25.2 million verdict in its own patent infringement lawsuit. Houston-based Ion (NYSE: IO) was also represented by Locke Lord Bissell & Liddell.

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MINNEAPOLIS — Boeing’s first-quarter profit fell almost 15 percent as it delivered fewer aircraft. But the company said it is still on track for its most closely watched delivery: the first 787, by the end of the year.

Its shares jumped $2.60, or 3.7 percent, to $74.01 in morning trading.

Boeing’s first-quarter report on Wednesday was notable for all the potential bad news that wasn’t there. Sticking with plans to deliver the 787 by the end of the year might reassure those analysts who had been worried about further delays. Its 2010 profit guidance remained unchanged except for an accounting charge that investors found out about last month. And it said 2011 revenue should rise.

Boeing President and CEO Jim McNerney said that despite significant budget pressures facing the U.S. Defense Department, some of the company’s key defense programs continue to have strong Pentagon support, including the St. Louis-built F/A-18 fighter jet.

"The current business environment will continue to put pressure on some of our defense, space and security programs, but we remain intensely focused on executing to plan and meeting the enduring needs of our customers," he said.

McNerney said Boeing will decide during the current quarter whether to increase the production rate on its workhorse 737 from the current 31 per month.

The airplane maker and defense contractor said on Wednesday that it earned $519 million during its first quarter, or 70 cents per share. Analysts surveyed by Thomson Reuters expected a profit of about 63 cents per share.

Revenue fell almost 8 percent to $15.2 billion, close to what analysts had forecast.

The 787 flew more than two years late. Boeing said the test fleet has flown for a total of 500 hours as of Friday. One of the planes was moved to Florida on Sunday for extreme weather testing at Eglin Air Force Base.

Boeing has orders for 866 of the planes, from 57 customers. The sooner Boeing delivers the plane, the sooner it gets paid, although customers have made major pre-delivery payments, too.

Boeing said it expects revenue of $64 billion to $66 billion this year. Analysts had been expecting $65.04 billion. It reduced its full-year forecast to $3.50 to $3.80 per share to account for a previously announced charge of 20 cents per share related to recently passed health legislation.

Boeing said it expects 2011 revenue will be higher as it delivers the 787 and a new version of its 747.

Ken Leiser of the Post-Dispatch contributed to this report.

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Thomas Hanley has been named the new president and chief executive officer of ExpressJet Holdings Inc., effective immediately.

Hanley replaces T. Patrick Kelly, interim president and CEO, who will return to his position on ExpressJet’s board of directors on May 1. James Ream resigned from the CEO position last December to work for Dallas-based American Airlines Inc. (NYSE:AMR)

Houston-based ExpressJet Holdings (NYSE: XJT) is the parent company of regional and charter airline operator, ExpressJet Airlines Inc, which serves 134 scheduled destinations in North America and the Caribbean with about 1,045 departures per day

Hanley previously worked in a variety of executive positions for a private equity fund, Wexford Capital LP of Greenwich, Conn., and led a restructuring of Rhino Energy, a Lexington, Ky.-based coal company. He also worked as a vice president of the US Airways Express division.

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Kentucky’s seasonally adjusted preliminary unemployment rate for March declined to 10.7 percent from a revised 10.9 percent in February.

The March jobless rate increased from 10.1 percent a year earlier, according to statistics released Thursday by the Kentucky Office of Employment and Training.

The March unemployment rate matches the state’s rate in January 2010 guaranteed pay day loans.

The U.S. seasonally adjusted unemployment rate in March was 9.7 percent, unchanged from February.

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A new player is charging into the arid landscape of banks willing to lend to franchise operators. Bancorp Bank, based in Wilmington, Del., said this week that it will launch a new program specifically targeting startup and expanding franchises.

Bancorp plans to limit its program to 30 yet-to-be-selected franchise brands with "measured performance and experience within their operations," and will make its loans through the Small Business Administration’s guaranteed lending programs. The bank is partnering on the effort with consulting group Franchise America Finance, a newly launched subsidiary of Siegel Financial Group.

"We got together because we saw a vacuum of capital access to small business," said Nathan Greenberg, one of Franchise America Finance’s three founding partners. "We expect to have brands coming on board in the next 30 days."

Bancorp didn’t put a dollar figure on its new lending program, though it said it intends to build a "significant" SBA lending portfolio. Recent hire Dianne Gallion, an SBA lending veteran who most recently ran Banco Popular’s small business loan programs, will head the initiative.

"Bancorp Bank is very excited to enter the national franchise lending arena," Gallion said in a written statement. "We are focused on lending to only the best of the best in franchising, while helping the economy by stimulating job creation through a proven business model."

Lending crunch: The past year has been a grim one for franchise operators looking for financing. Lending to franchisees plunged 36% to $7.5 billion in 2009 from $11.7 billion in 2008, according to a year-end report from franchise research firm FRANdata. In 2010, the firm forecasts that franchise lending will contract even further, to $6.7 billion.

That’s a far cry from the $10.1 billion that FRANdata expects franchise businesses to demand in the coming year. In its own economic research, PricewaterhouseCoopers forecast that the number of franchise outlets in the U.S. will rise 2% in 2010, topping 900,000.

"Capital access has become the number-one issue in franchising, impacting new unit growth, ownership transfers, and even unit renovations," FRANdata President Darrell Johnson said in a written statement.

One key player in the franchise lending field, CIT Group (CIT, Fortune 500), essentially disappeared from the market last year as it lurched toward its eventual bankruptcy. Once the SBA’s most active lender and a preferred financer for franchisors like Dunkin’ Donuts, the Melting Pot and Cici’s Pizza, CIT originated only a handful of loans in 2009. That left many potential franchise operators scrambling to find an alternate lender.

Bancorp sees opportunity in that gap. The online bank holds assets of $2 billion, mostly commercial loans in the Delaware Valley area, but is looking to expand. SBA lending will be a new field for the bank, which has done little so far in the government-backed lending market.

The International Franchise Association, an industry trade group, applauded the move.

"This is a private-sector response to the failure of small business lending in the economy," said David French, IFA’s vice president of government relations. "We have been working with the SBA, the Obama administration and Congress to drive some policy changes. Those changes have not moved as quickly as we would like. We are encouraged by the folks that see the need and want to get in and help provide franchise financing." 

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The operator of St. Louis-based Hardee’s restaurants said Wednesday that it may have received a better takeover offer than the one it already has from a private equity firm.

CKE Restaurants Inc. said an unnamed party submitted a bid that may be superior to its current deal with Thomas H. Lee Partners, a Boston firm that’s among a trio of investment firms that bought Dunkin’ Brands Inc. in 2006.

CKE accepted Lee’s offer in February, which includes about $619 million in cash and approximately $309 million in debt. CKE did not disclose many specifics about the new proposal, but said it could keep talking with the bidder until April 27 because of terms in the agreement with Thomas H. Lee.

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When both sides claim victory after a U.S. Supreme Court decision, there’s some spin going on. Yet it’s not as if anyone is being dishonest about Tuesday’s ruling. Investors and the mutual fund industry alike have something to crow about.

At issue? What constitutes an excessive mutual fund fee, and what standard should be used to make that assessment. A key sticking point is that individual investors often pay twice as much as big institutional clients such as pension funds.

Some observers argue the court’s ruling will pressure fund companies to reduce that gap and give smaller investors a break. The ruling "was not a home run for either side," but is investor-friendly, says William Birdthistle, an assistant professor at the Chicago-Kent School of Law.

Here’s a rundown:

BACKGROUND: A group of investors sued Harris Associates, an adviser to the Oakmark family of mutual funds, arguing that its fees were excessive. The case reached the 7th U.S. Circuit Court of Appeals, which shocked the industry two years ago.

In its decision, that court abandoned a fee-challenge standard adopted in 1982. The Gartenberg standard requires plaintiffs to show that fees were so out of whack that they couldn’t have been the product of aboveboard negotiations between the fund adviser and the independent board that approves the adviser’s fees.

The 7th Circuit went beyond the Gartenberg test and concluded that investors alleging excessive fees must also show the adviser misled the fund’s board. That’s a higher standard — so high that investor advocates suggested that fighting excessive fees would be nearly impossible.

THE DECISION: The Supreme Court faulted the lower court, saying the Gartenberg standard reflected Congress’ intent in the mutual fund laws on the books. The high court sent the case back for reconsideration applying Gartenberg.

Justice Samuel Alito, writing for the court, said Gartenberg correctly holds that any challenge must show a fee was so high that it couldn’t have been the product of "arm’s length bargaining" between the adviser and board. The court also warned against judicial second-guessing of fund board fee decisions.

WHAT INVESTORS WON: Investors will avoid the higher bar that the appeals court would have established for fee challenges.

Such a standard "would have virtually precluded any successful fee suit from proceeding," says Mercer Bullard, a University of Mississippi securities law professor. Bullard says excessive fee claims are now more likely to succeed.

It’s an important result stemming from the first time the high court squarely addressed the disparity in fees paid by individual investors and institutional clients.

The industry has plenty of justifications for charging smaller investors fees that are frequently twice as high for each dollar invested. Institutional clients enjoy what’s in essence a bulk rate because they don’t need as much support.

WHAT INVESTORS LOST: Although Gartenberg isn’t as strict as the 7th Circuit’s standard, it has still proved to be a high bar. Since Gartenberg has been in effect, no fee challenge has prevailed at trial.

WHAT FUND COMPANIES WON: Predictability. Fund fee-setting came under a cloud after the appeals court tried to replace Gartenberg, says Paul Schott Stevens, president and CEO of the industry’s Investment Company Institute.

The high court’s support for the standard bolsters existing practices, bringing "stability and certainty for mutual funds, their directors, and almost 90 million investors," he said.

WHAT FUND COMPANIES LOST: Their practice of charging small investors more is now being closely watched.

The ruling also means fund companies won’t get the greater fee-challenge protection they would have won from the appeals court’s rejected standard.

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