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resurfaced.

CHAPTER SIX
    “How’s the transition going?” Gerald Folsom demanded over his cell phone.
    Folsom’s Chief Financial Officer, Sanford Cunningham, blew out a loud stream of air that whistled in his boss’ ear. Cunningham had worked for Folsom for twelve years, handling three bank transactions for Folsom Financial Corporation in that time. A man of medium height and weight, with a brush cut, acne-pitted skin, and cold-blue penetrating eyes, he was Folsom’s bulldog. “These takeovers are always dicey,” Cunningham said, “but from my experience, it couldn’t be better.”
    “Be specific,” Folsom ordered.
    “Boss, this bank is a bird’s nest on the ground. You’ll remember July 15, 2011, as the day your net worth grew dramatically. As we determined during our due diligence, the loan portfolio is in great shape. The Feds took it over because they determined that the collateral is below the loan balance on a large number of the bank’s commercial real estate loans. And they’re assuming real estate values will continue to decline, so the loans will only be further under water as time goes on. Hell, the regulators are presuming that every city in the country will be another Las Vegas or Phoenix, with their real estate values plummeting. But most of Broad Street’s borrowers are as good as gold, never missing a payment. So, even though the regulators made the bank write down the loans based on their estimated real estate value, the bank’s loan delinquency rate is almost non-existent. Its president knew what he was doing when it came to lending.”
    “Any problems with the bank’s IT systems?”
    “No, they’re all updated and functioning, so the transition to our systems should be seamless.”
    “What about the deposits?”
    “As you know, we paid two point four percent for all of the deposits. Hell, if we do nothing else, we can invest the deposits in Treasuries and make money with zero risk. We’ll send a notice to all depositors next Friday advising them we’re going to reduce the rates we’re paying on CDs to one point two percent. That will save about $17 million in annual interest expense. Then we’ll bump up fees on checking accounts and reduce the interest paid on those accounts. That should generate another $37 million in fees and interest savings.”
    “We’ll see a mini-run on the bank when those letters go out,” Folsom said, not really worried. “Especially the retired customers. They’ll cash in their CDs and take their money to some other bank that’s paying a little more interest.”
    “We’ve got plenty of liquidity even if that happens. And there’s always the Federal Reserve. We can borrow overnight Fed Funds at near zero and lend it out at four and a half to five percent.”
    Folsom chuckled.
    Cunningham continued, “Our lawyers will start calling the owners of the real estate where our branches are located. We’ll renegotiate the leases. Probably cut the rent in half. That’ll save $60 million over the next ten years.”
    “That’s one of the things I’ll never understand,” Folsom interjected. “How can the federal government take over a bank and then pass on the right to the new owners to renegotiate all of the bank’s contracts? Leases, Certificates of Deposit, vendor contracts. They screw the original owners of the bank, the depositors, and the bankers’ vendors. What a cluster fuck!”
    “I assume you’re not complaining about how the system works,” Cunningham said with a laugh.
    “Sanford, my boy, just the opposite,” Folsom answered. “God bless my Uncle Sam.” Then he added, “When can you get me a summary of the loan portfolio?”
    “I’ll email it to you on Monday afternoon. Loan amounts, interest rates, loan-to-value ratios, collateral descriptions, delinquencies, and borrower information.”
    “That’s where the big bucks are hiding, Sanford. We buy the bank’s deposits at a slight premium and buy the loans from the FDIC that