Lenders Forecast Economic Recovery in 2010

Results of Phoenix`s Lending Survey Points to Stabilization in Economic
Indicators
PHILADELPHIA--(Business Wire)--
Lenders across the nation weighed in on the economy - and things are beginning
to look up. While lenders are divided on the impact of the Financial Stability
plan, they see signs of bottoming out and stabilization in some major economic
indicators according to the results of last quarter`s Phoenix Management
"Lending Climate in America" Survey.

Lenders are divided on the perceived impact of the Financial Stability Plan on
U.S. lending. Nearly half - 45 percent - of respondents believe that the
Treasury Department`s Financial Stability Plan will have a "modest" impact on
lending. A similar percentage - forty-four percent - opined that the Plan would
have "minimal" impact on U.S. lending. Eight percent responded that the Plan
would have a "meaningful" impact, while the remaining three percent believe the
Financial Stability Plan will have no impact on lending in the U.S.

Respondents opine that the economic recovery will be a 2010 event. When asked
about the perceived timing of the economic recovery, an identical 31 percent
gave the following responses: within the next 12 months and within the next 18
months. Twenty-five percent of lenders forecast a faster recovery - anticipating
the recovery to begin within the next nine months. Eight percent of respondents
believe it will be more than eighteen months before the economic recovery will
begin. Finally, five percent of lenders believe the economic recovery will begin
within the next six months.

"It`s great to see Lenders reversing trend on these key economic drivers. Even
their outlook for the economy improved for the second half of 2009," said
Michael Jacoby, Managing Director and Shareholder of Phoenix Management
Services.

The loan demand diffusion index (the percentage of respondents forecasting a
higher percentage less those anticipating a lower percentage), while still
negative, reversed its recent negative trending, as respondents were less
pessimistic across all domestic lending segments in this survey. The overall
diffusion index for all lending segments improved to negative 25 percentage
points (from negative 52 percentage points in the previous survey). Respondents
indicated that, on average for all domestic lending categories, 20 percent have
expectations for increased loan demand (versus 9 percent in the prior quarter).

Sixty-nine percent of respondents anticipate inflation will be equal to current
levels over the next six months as compared to thirty-nine percent in the
previous survey. Twenty-four percent anticipate overall levels of inflation will
trend higher than recent levels (previous survey: seventeen percent). Finally,
seven percent of lenders predict inflation will trend lower than current levels
over the next six months (previous survey: forty-four percent).

In line with the previous survey, eighty-nine percent designated the reduction
in consumer purchasing power as the economic issue borrowers/customers are most
concerned with in the near term. Five percent indicated higher labor rates as
the most concerning economic issue. Four percent of lenders view increasing
commodity prices as the most concerning economic issue. One percent of
respondents designated the impact of importing lower-cost goods as the most
concerning economic issue.

Lenders expectations for the economy marginally improved from the previous
quarter, but still remain well below recent historical levels. Lenders expect
the economy to perform at a "mid-D" level during the next six months. The "out
six months" outlook improved to a "C" expectation level as well - a significant
improvement from the previous "D" outlook in the previous quarterly survey.

About the Survey

The Phoenix Management Services "Lending Climate in America" survey is conducted
quarterly to gauge shifts in lenders` attitudes toward the economy. The Phoenix
survey includes lenders from commercial banks, commercial finance companies and
factors across the nation. Phoenix has been conducting this survey for over 13
years.

About Phoenix Management Services

Phoenix Management Services is a recognized leader in operationally focused
turnaround, crisis and interim management and strategic advisory services to
middle market companies in transition. Since 1985, Phoenix has aggressively
advocated on behalf of its clients in more than 900 assignments nationwide
across a variety of situations and industries. With offices in Philadelphia, New
York, Boston, Washington DC, Dallas, Ft. Lauderdale, Cleveland and Atlanta,
Phoenix preserves and enhances the value of its clients' companies by solving
the operational and financial challenges they encounter. Visit our site at:
www.phoenixmanagement.com.

Phoenix Management Services
Michael E. Jacoby
610-358-4700
mjacoby@phoenixmanagement.com

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