(Greensboro, NC) May 1, 2013 — Close to 100 professionals from across the state attended Wharton Gladden’s Third Annual State of Main Street Luncheon and heard a lively discussion between highly regarded banking leaders.  This year’s topics centered on the fundamental differences between credit unions and community banks, as well as the effect of pending regulations such as the Dodd-Frank bill, and panelists highlighted the current state of small businesses in North Carolina.

The annual luncheon was held at the Piedmont Club in Downtown Winston-Salem and featured prominent banking leaders: Lori Thomson, President and CEO of Premier Federal Credit Union; Simpson “Skip” Brown, Regional President of First Community Bank; Marcus Schaefer, President and CEO of Truliant Federal Credit Union; Pressley Ridgill, President and CEO of NewBridge Bank; and Algenon Cash, Managing Director of Wharton Gladden, moderated the discussion.

Cash kicked off the event with some background about why the Firm started hosting the annual luncheon.  “Many years ago, we noticed everyone was enamored with Wall Street, but we understood that Main Street is the primary economic driver, so we decided it was important to bring together leaders to highlight the current state of small business, community banks, and credit unions,” he said.

Schaefer carefully explained that credit unions have some major differences compared to traditional community banks.  For example, he highlighted the ownership structure of the two types of financial institutions; credit unions are non-profit organizations that are owned by members.  Community banks on the other hand are for-profit entities that are owned by shareholders.

Another comparative difference is the amount of commercial loans that can be held on the balance sheet.  Credit unions are capped at 12.5% of their assets being in the form of commercial loans, while banks operate with no cap at all.

“Many small business owners needed capital when credit markets froze some years ago, but the cap made it difficult for us to fill a clear gap in the marketplace,” Schaefer said.

Ridgill highlighted that banks and credit unions perform similar functions, but credit unions pay no taxes and that creates an unleveled playing field.

“I have no issue with credit unions making more commercial loans, but they should be required to pay taxes and undergo the same oversight as the banks,” Brown stated.

“Credit unions often provide loans when banks choose not to do so, for example, we make micro loans to our members who need to pay utility bills.  Our non-profit status makes it possible to help a segment of the market that may be non-bankable,” Thompson said.

The bill to reform financial institutions, Dodd-Frank, took center stage when Algenon Cash asked the panelists to discuss the many ways the legislation may impact the economy, lending activity, and the health of small business.

“70% of the bill has not been written, so we are still waiting to receive clear rules and guidelines, right now we are just doing a lot of guess work,” Ridgill said.  “We may not feel the full effect of this bill for several more years,” Schaefer added.

Cash closed the event by reminding guests, “Main Street is definitely in recovery mode – financial institutions are much healthier and small businesses are hiring again.  Over 70% of new job creation originates in small businesses, so this sector of our economy is critical to a sustained recovery.”

About Wharton Gladden & Company:

Wharton Gladden & Company is a uniquely designed boutique investment banking firm that specializes in providing strategic advisory services, underwriting, capital placement and private equity for a diversified client base that includes corporations, real estate developers, financial institutions, investors, municipalities and high net worth individuals.