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First Financial Founder Finds Success in Loans

November 13, 2011

Bliss Morris admits she was in the right place at the right time.

The Oklahoman

Bliss Morris admits she was in the right place at the right time.

Morris, who went to work for the Federal Deposit Insurance Corp. in her early 20s, was on the ground when Oklahoma City's Penn Square Bank failed in 1982.

She worked on more than 30 bank failures, and was in place when the FDIC decided to get out of the loan sales business. A colleague suggested Morris might be well-suited to launch a private company to take over that chore.

"It was an idea that was way before its time," Morris said. Her Oklahoma City company, First Financial Network, has been brokering loans and performing the requisite document preparation and asset analysis affiliated with that process for more than two decades.

Since the economic collapse of 2008, the company has valued and sold more than $18 billion of loans.

Morris sat down last week with The Oklahoman to discuss her business and her outlook. This is an edited version of that conversation:

Q: What is First Financial?

A: The market and the business has changed dramatically since 1989, when I founded the company. We started out as a loan sale adviser. Back in those days that was an unknown business. We were a boutique company. The premise was to help banking institutions determine which loans in their portfolio would be best suited to be sold. We would go through the process of preparing those assets for sale, valuing the loans so the bank could set up management expectations in terms of value and then ultimately selling those loans.

Today, 22 years later and another downturn -- obviously the business was started in a downturn -- the way in which our business has changed is we have the opportunity to do business not only here in the United States but also on an international basis. And certain processes that we developed over the years that were a part of what would carry us to the execution of a sale of loans, we now are actually utilizing as independent lines of business.

I'm very proud that we're an Oklahoma company. That's not easy to do considering some of our competition are household names, some are international banks and then other types of loan sale advisers that are more like our company.

Q: What are some of the other lines of business?

A: We've been asked to come into institutions that are seeking outside capital and do a sampling of their loan portfolio. We come in and index their documents and put them in a very orderly fashion. We have developed what we call a loan sale network. It's a secured platform where all of those images can be loaded in a very organized fashion -- data can be loaded in an organized fashion. Other institutions that would be interested in buying that bank or recapitalizing that bank can actually do their due diligence in an online secure environment at their leisure anytime, 24-7.

Another thing we've been asked to do in this business climate is come in and help clients understand what the value of their loans is. We have Dodd-Frank that's coming into play with so many new regulations for our banking industry. They're trying figure out what that means for them. They're required in certain circumstances to know what the market value of that loan would be. We actually provide those valuing services apart from doing the loan sale.

It's just been interesting how that's naturally happened because we developed those processes as a means to the end, and now they're becoming profitable lines of business for us.

Q: So the tools you provide help them evaluate their portfolio in a way they can't do in-house?

A: Pretty much, yes. Since we're a 22-year company, we have maintained and aggregated the sales price for different types of loans for many, many years. We're certainly running different analysis. We have different internal evaluation models we've created. ... But we also are really looking at how does the market view those types of loans. What were prices paid in Atlanta, Ga., for office-backed real estate loans, for instance.

We're also real excited about what we might be able to do in Europe. The European companies are really examining the possibility of beginning to use disposition plans like we use here in the United States. The sale of loans really started in the state of Oklahoma. The sale of loans started after Penn Square Bank failed. The liquidation was here, and for a while was the largest one the FDIC had in the country. When FDIC decided in the mid-'80s that they needed to get out of the liquidation business and get those loans back in the private sector, that's where the whole concept of loan sales started. Now you have other countries look at that model.

Q: So, based on your knowledge of bad loans, you should have some sense of where we are in this current financial mess.

A: We have been extremely busy over the last three years. I don't see that ending anytime soon.

Q: What's your biggest pet peeve?

A: A can't-do attitude really bothers. Lazy bothers me. Whiners.