"We obviously have tried to be prudent in making sure we havethe appropriate staff for the appropriate area," Jonathan Morris,president of BMC Capital, stresses to GlobeSt.com, responding to aninquiry about a rumored double-digit layoff in its originationranks in Dallas. "We have to make sure we have the right people inthe right places."

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Morris says "a handful" of underwriters has been eliminated--afact that's been confirmed by one of the laid-off workers. BMC'spolicy is not to disclose the size of its ranks, but both say it'ssubstantially less than the rumored number of 20.

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"I'm not going to say there were no changes in the underwritinggroup, but I don't want to get too specific," Morris says, addingthe head count can fluctuate monthly. "We are continuing to hireand we are hiring in support roles and core mortgage andorigination lines."

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Despite the financial markets' turmoil, Morris says he's placeda letter of intent and is 45 days into due diligence to acquire aTexas bank as part of this year's growth plan. "We've takenlender-risk for years on deals," he says. "It's a great opportunityto buy a bank right now. If you're going to buy a bank, this is thetime to do it." He adds that the deal will close this year if itclears due diligence hurdles.

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Meanwhile, BMC origination offices have just opened inProvidence, RI and San Francisco. Morris says talks are underway toopen four more offices in the US, which would bump the BMC chain to26 locations to deepen its 50-state coverage area. "Thisenvironment has made it easier to hire good loan officers," hesays, pointing out that the last two hires came from the ranks ofNew York City-based Lehman Brothers and Seattle-headquarteredWashington Mutual Inc.

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BMC's right-sizing move pales in comparison to other financialservices companies in the struggle to survive the subprime debacle.But, the employee rebalancing acts are on target with the times. Inthe Federal Reserve's April 16 Beige Book report, economists citedbusiness leaders' concerns that negative economic reports willaffect future activity in all circuits. "A high level ofuncertainty has led some firms to pare down investment and becautious about staffing levels," the Fed concluded.

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BMC's niche is originating loans from $500,000 to $5million--and there's no plan to change the focus, according toMorris. In the Beige Book, economists point out that loans arebeing put to tougher scrutiny to be sure they arewell-collateralized, with more caution being exercised on realestate and mortgage loans. "Financial-service firms are cautiousabout lending, but competition remained stiff for deposits andquality loans," the Fed said. "Net interest margins are beingsqueezed, particularly for small- to mid-size financialinstitutions and many respondents say they cannot take deposit rates much lower."

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Calabasas, CA-based Countrywide Financial Corp., which has cutthousands of jobs just like several competitors, is a prime exampleof just how bleak the financial markets are, with the companyreporting a net loss of $893 million or $1.60 per diluted share.Last year, Countrywide reported a net income of $434 million or 72cents per diluted share at Q1's close. On the bright side, thelender's mortgage loan production sector showed $232 million of Q1pre-tax earnings versus a $507-million loss in the prior quarter.That and its Balboa Life & Casualty insurance business did showgains, but they were offset by $3 billion of credit-related costsduring the quarter, according to yesterday's report to themarket.

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