Archive for July, 2013

Actively-managed portfolios for superior returns

“Sell on bugles and buy on cannons. Timing the market is impossible, time in the market is crucial. Buy when everyone else is fearful, and sell when everyone else is greedy.” – Warren Buffet

The last five years have been extremely challenging for investors and wealth managers as heightened volatility in markets has led to investors not achieving desired returns. One of the key lessons has been that markets are not driven by fundamental factors alone, but are reflections of the collective emotions of all the participants.

In this backdrop, wealth managers have walked a tightrope. They are expected to not just give advice on asset allocation but also help with security selection across various asset classes. Their advice, however, can conflict with investor sentiment.

That is what leads to huge gap between the advice that is given to investors and their actual execution. This gap between advice and execution can lead to sub optimal portfolios and consequently returns.

Now, how does this gap arise? The following could be the reasons:

There may be insufficient data available to support the advice. This could be leading to lack of investor confidence and insufficient measurement systems for the results.

It could be that the strategy is sound. But it is not communicated in a way that clients can easily understand. Therefore they don’t see what action needs to be taken and when.

There is simply no clarity about who is accountable for ensuring execution. This can lead to missed opportunities.

How to bridge it?

Knowing all this, how does one close the gap between advice and execution? To close the gap, the following steps need to be followed:

Define strategies and align tasks/people to it – in other words define roles and responsibilities clearly so that there is no lack of clarity on who has to execute.

Provide compelling advice – so that investors are ready to buy the idea on the spot

Streamline operations. Build automated processes to implement ideas

Investors can also solve this problem through managed solutions.

A few advisors offer discretionary multi-asset class solutions which have the ability to straddle across asset classes and individual securities depending on the view on markets. The basis of such offerings is “Asset Allocation.” Historically, we have seen that different asset classes perform differently and that performance within sectors and across varied market capitalisations tends to diverge.

Hence, one needs to allocate money across different asset classes but in a scientific manner.

Most studies also suggest that the asset allocation decision (which classes to invest into and at what weights) is very important. In fact, 92 per cent of return variability is explained by asset allocation.

Managed solutions help to reduce the gap between advice and execution. This is most suitable for professionals who cannot actively manage their portfolios due to time or work constraints.

Managed solutions allow portfolios to be actively managed by advisors.

It also makes the advisor responsible and accountable for the advice being provided. Hence, in an active market environment like today the importance of such solutions is growing.

(The author is Head – Investment Advisory, Motilal Oswal Private Wealth Management.)

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Saturday, July 27th, 2013 EN No Comments

People on the Move

• Viki Wooster, of Bend, has been re-elected as national president of The American Institute of Building Design. Wooster has run her own residential design firm, Wooster Design Inspirations, for 25 years and specializes in custom home design, additions and remodels andd designs for speculative construction.

• Melisa Thompson has joined AmeriTitle as director of human resources and attorney relations representative. Thompson has more than 15 years of management, real estate and legal experience and is currently a licensed attorney in Oregon, Washington and Idaho.

• Kevin and Jen Lair, owners of Wild Birds Unlimited in Bend, were recently presented with the Franchise Honor Award by Wild Birds Unlimited for consistently following the system and contributing to the growth and improvement of the company. The Lairs, among other franchise owners, were recognized at the Annual Enterprise Leadership Conference of Wild Birds Unlimited.

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Saturday, July 27th, 2013 EN No Comments

How the Big Six banks won the battle for Canadians’ wealth

The white flag of surrender hasn’t quite been raised, but the war for the Canadian investor looks all but over.

Coming out of the financial crisis, the big banks and independent retail brokerage firms each had big ambitions to expand their businesses. The crisis and the stock market crash, they hoped, would bring opportunity; rattled investors would want help and advice on how to repair their battered portfolios and save their retirement plans.

Several years later, what seemed like an even-handed fight between the banks and their smaller independent rivals has become lopsided. And it’s the Big Six that are winning.

It’s a tough pill to swallow for someone like Andrew Marsh, who has been on both sides of the battle. For 12 years, he built a solid business as a retail broker in London, Ont., giving financial advice to a lengthy roster of loyal clients at Bank of Nova Scotia’s investment division, ScotiaMcLeod.

But in 2004, he left it all behind to become one of the co-founders of GMP Private Client, an advisory shop created by investment bank GMP Capital Inc. to butt heads with the banks. It seemed like a good decision – until the market crashed.

Losing money, Mr. Marsh’s firm merged with rival Richardson Partners in 2009 to bolster both companies’ balance sheets. The combined entity, Richardson GMP Ltd., is still struggling, posting a loss in 2012. Canaccord Genuity Wealth Management, another independent, hasn’t turned a quarterly profit in a year and a half. Small firms that generate most of their revenue from advising retail investors collectively lost $99-million last year, according to the Investment Industry Association of Canada.

The banks, meanwhile, are swimming in profits. Though they also suffered during the downturn, their wealth-management divisions, which sell mutual funds and other products to millions of Canadians, rebounded with incredible speed. Royal Bank of Canada’s wealth division made $763-million last year, while Toronto-Dominion Bank’s earned just over $600-million in the same period.

This is no accident. The banks have invested heavily in their asset management and financial advice operations, hoping these businesses can combat slowing growth in other units. Canada’s housing market is cooling, making it harder to find growth in selling mortgages; revenues from investment banking and other high-end corporate businesses are volatile, and are now feeling the effects of the capital drought in the energy and mining sectors.

There’s also an element of safety to the Big Banks’ strategy. Since the crisis, banking regulators have been tightening up the rules for how much capital banks need to hold. The business model of wealth management is a simple one – it’s about helping people to invest their money in return for a fee – so there’s no risk of the kind of catastrophic trading losses that brought down major U.S. banks in 2008. For that reason, regulators don’t demand that banks hold a large capital cushion against these units.

“Clearly, wealth is a nice offset to credit businesses and trading divisions that carry different risk profiles,” RBC chief executive officer Gordon Nixon said.

Against this backdrop, banks are getting more aggressive. The acquisitions are starting to add up. Scotiabank scooped up independent DundeeWealth for $2.3-billion in 2010 and National Bank of Canada acquired Wellington West Holdings Inc., an independent brokerage, as well as HSBC Bank Canada’s retail brokerage arm. The country’s biggest banks now control nearly half of all the long-term mutual fund assets in Canada; by some estimates, they have 90 per cent of all the assets in retail brokerage accounts.

That leaves little for the four big non-bank brokerage firms – Canaccord Genuity, Richardson GMP, Raymond James Ltd. and Macquarie Private Wealth Inc. – as well as their smaller peers.

But while the numbers say that the banks look smart, the independents tell a different story. They argue that the Big Six are using their natural advantages – their size, deep pockets and vast networks of bank branches on street corners everywhere – to push them aside. Mutual fund companies are also feeling the pain, as banks continue to take away market share from the likes of AGF Management Ltd. and others.


  • RY-T
  • TD-T
  • BNS-T
  • NA-T
  • BMO-T
  • CM-T

More Discussion on RY-T

More Discussion on TD-T

More Discussion on BNS-T

More Discussion on NA-T

More Discussion on BMO-T

More Discussion on CM-T

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Saturday, July 27th, 2013 EN No Comments

Wealth adviser: ‘Internally, we don’t talk to each other anymore’



Robert Wright

Robert Wright










Kevin Eigelbach
Reporter- Business First

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“Internally, we don’t talk to each other anymore.”

That’s what Robert Wright Jr., managing principal for the Ohio Valley offices of Waddell Reed Inc., said to me about one of the ways that technology has affected how wealth managers do their jobs.

Inside the firm, wealth advisers don’t talk very much face to face. Instead, they communicate with each other via e-mail. That has become the preferred way to communicate, Wright said, because it’s easier to track mistakes and because a record of all communications is kept.

That’s important in a highly regulated industry like wealth management, Wright said.

“It makes it really efficient for the financial advisers,” he said.

Technology also has affected the way that advisers communicate with their clients, especially their younger clients.

The preferred method of communication for under-40 clients at ARGI Financial Group LLC is via technology, senior partner Ron Butt told me. Those younger clients want to chat via iPhone, or do a video conference via

Skype or some other online service, he said.

“We have a difficult time getting them to come in and meet face to face,” he added.

That can be a problem, he said, because personal financial information is being discussed, and the video conference has to be secure from any third parties that might want to listen in. That’s why ARGI only uses services that allow encryption, he said.

For more about how technology is affecting the wealth management industry, see this story in the Inside Business section of today’s print edition of Business First.

Kevin Eigelbach covers these beats: Financial services, residential real estate, property and casualty insurance, construction, unions, engineers, architects, agriculture, South End, Southwest County, Bullitt County.

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Friday, July 26th, 2013 EN No Comments

Big News Week for Sovereign Wealth Funds – The Good, the Interesting, the Ugly

vincebThis article is written by Vince Berretta – The Liaison Report and his opinions are his own and not of the Sovereign Wealth Fund Institute.

Where have sovereign wealth funds been my whole life?  Apparently moving markets.  Every time they make an investment or decide to abandon a manager, they make headlines.  And as their AUM continues to grow past US$ 5.5 trillion they’re only going to find themselves more and more the focus of fund managers’ marketing efforts.

Wait!  I’m not just saying it this time.  I actually have real verifiable, secondary-source information to base my claims. Granted, I let the news writers take care of most of the heavy lifting, but news aggregation is no easy task.  Trust me, a lot of furious clicking is going on behind this seemingly whimsical newsletter.

But enough about all the personal sacrifice I make for your benefit.  Let’s get into it.

The Ugly

SPECIAL NOTE: What you are about to read includes gruesome outflows; if you are in the presence of small children or wear a pacemaker, you are advised to proceed with discretion.

Legg Mason’s assets slide 3.1% in quarter from market losses, outflows – Rick Baert (PIonline.com)

Janus AUM drops 1.9% in quarter – Randy Diamond (PIonline.com)

T. Rowe reports $8 billion in net outflows in Q2 vs. $3.3 billion net inflows in Q1 – Rick Baert (PIonline.com)

The Money Quote: “William Katz, analyst at Citigroup Global Markets, said in a client note that T. Rowe management told him about 90% of the outflows came from ‘a handful of sovereign wealth fund clients…”’

Well isn’t that interesting?  But, like my Gramps always said, “one funds manager’s outflow is another’s inflow.”  Oh Gramps, your bucolic maxims really are so trite!

The Interesting

African tower group IHS raises $522 mln to fund growth – Reporting by Chijioke Ohuocha; Editing by Joe Brock (Reuters)

The Money Quote: “IHS raised $280 million in debt from the World Bank’s private sector arm, International Finance Corp, and $242 million in equity from new and existing shareholders, including an Asian Sovereign wealth fund, the company said in a statement.”

I wonder if the NSIA is going to be in on that?

China Investment Corporation Posts 10.6 Percent Return, Moves Up Ranking – (swfinstitute.org)

The Money Quote: “The China Investment Corporation (CIC) posted a 10.6% return for the year of 2012, compared to -4.3% in 2011. Assets for the China Investment Corporation grew to US$ 575.2 billion at the end of 2012 compared to US$ 482 billion. 36.2% of assets are internally managed, while 63.8% is managed externally.”

Let’s see.  Some quick math here.  %63.8 x 575.2 = 367 billion in sweet, sweet mandates.

The Good

For me at least.

We’ll go back to PI because that had a very (tacitly) informative article this past week on marketing to SWFs (they also quoted the Sovereign Wealth Fund Institute, but I’ll refrain from boasting).  Many of my longtime readers will have seen some of this information before.  But this article has quotes.  I should think about doing that.

Manager growth linked to SWFs – Enormous asset pool offers ‘massive prospects’ for firms, report says – Rick Baert (PIonline.com)

Money Quote 1: “Continued asset gains will present what the report called ‘massive growth prospects’ for money managers. The PwC report said the increase in sovereign wealth funds was one of five macro trends in money management…”

Australia’s superannuation funds will be next.  But let’s just focus on SWFs for now.

Money Quote 2: “But getting this business for money managers isn’t easy. Rather than waiting for RFPs, SWFs require a more direct, individual approach ‘If you’re a sovereign wealth fund, everybody and their brother are calling you,’ said John Siciliano, PwC managing director, global asset management consulting practice, based in New York. ‘If you’re not calling, you won’t get the business.’”

You know what also works really well John?  Networking events.  Just sayin’.

Money Quote 3: Mr. (Firas) Mallah listed three things managers need to know when marketing to SWFs:

• Sovereign wealth funds aren’t very transparent. “They disclose only indicative information,” he said. “The disclosures aren’t as detailed as with pension funds.”

• “Sovereign wealth funds don’t talk unless they’re solicited, so you need to know their structure and organization, plus have good direct contacts with them,” he said.

• Internal contacts “are just one piece of the puzzle. Investors like them have seen it all. Ninety percent of the top 100 money managers have shown them their products. Ultimately what you need is something with a proven track record.”

The article then goes on to stress the fact that boutique managers shouldn’t feel as though SWFs are only giving mandates to the bigger firms.  SWFs like individualized and prompt service.  If they feel that they can get that with a smaller manager, then there’s no reason they won’t go with that manager.  Of course an asset manager with 500 million AUM probably isn’t going to get a billion dollar mandate.  But there are examples of smaller managers catching a whale by the tail.

So there you have it.  SWFs are simultaneously responsible for massive inflows and outflows, and if you’re looking for the next major source of capital, I know just the place to start.


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Friday, July 26th, 2013 EN No Comments

Bloomberg cancels its new wealth management product


Thu Jul 25, 2013 9:09pm EDT

(Reuters) – Bloomberg LP is canceling its new wealth management service, BloombergBlack, before it hits the market.

For $100 a month, the service was expected to cater to individuals looking to track their investment portfolios – including mutual fund holdings, 401K retirement plans and college savings plans.

The project offered customers the opportunity to manage their portfolios held with retail brokerages and investment firms in one place, according to BloombergBlack’s website.

“We weighed the future prospects of the business against the ongoing resource investment and concluded that it wasn’t in our best interest to continue moving forward,” said a Bloomberg spokesman. “We remain optimistic about the idea and open to the possibility of pursuing a similar business in the future.”

Thomson Reuters is a competitor of Bloomberg LP.

Business Insider first reported the news that Bloomberg Black was canceled.

(Reporting by Jennifer Saba in New York; Edited by Martin Howell)

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Friday, July 26th, 2013 EN No Comments

Bryn Mawr Bank Corporation Reports Record Earnings Led by Wealth Revenue …

BRYN MAWR, Pa., July 25, 2013 (GLOBE NEWSWIRE) — Bryn Mawr Bank Corporation (Nasdaq:BMTC), (the “Corporation”), parent of The Bryn Mawr Trust Company (the “Bank”), today reported net income of $6.3 million and diluted earnings per share of $0.46 for the three months ended June 30, 2013, as compared to net income of $5.3 million and diluted earnings per share of $0.40 for the same period in 2012. Net income for the three months ended June 30, 2013 included pre-tax due diligence and merger-related expenses of $688 thousand as compared to $914 thousand for the same period in 2012.

Significant factors contributing to the results for the three months ended June 30, 2013, as compared to the same period in 2012, included increases in wealth management revenues and net interest income, which were partially offset by increases in salaries and benefits expense, occupancy costs and other operating expenses.

For the six months ended June 30, 2013, net income of $11.6 million was a $1.2 million increase from the $10.4 million recorded for the same period in 2012. Diluted earnings per share for the six months ended June 30, 2013 increased $0.07, to $0.86, as compared to $0.79 for the same period last year.

Ted Peters, Chairman and Chief Executive Officer, commented, “We are pleased with our continued strong quarterly results. The uptick in our net interest margin and the steady increase in wealth management revenues are encouraging signs.” Mr. Peters added, “The acquisition of Davidson Trust and the First Bank of Delaware transaction, both in 2012, have been nicely accretive to earnings.”

On July 25, 2013, the Board of Directors of the Corporation declared a quarterly dividend of $0.17 per share. The dividend is payable September 1, 2013 to shareholders of record as of August 6, 2013.

SIGNIFICANT ITEMS OF NOTE

Results of Operations

The overall results for the three months ended June 30, 2013, as compared to the same period in 2012, were affected by the May 2012 acquisition of the Davidson Trust Company (“DTC”) and the November 2012 purchase of deposits, loans and a branch location from First Bank of Delaware (“FBD”).

  • Net income of $6.3 million for the three months ended June 30, 2013 increased $907 thousand, or 17.0%, from $5.3 million for the same period in 2012.
     
  • Net interest income for the three months ended June 30, 2013 was $17.9 million, an increase of $2.0 million, or 12.7%, from $15.9 million for the same period in 2012. The increase in net interest income between the periods was largely the result of a $134.3 million, or 10.4%, increase in average portfolio loans. This increase was partially related to loans acquired from FBD, which totaled $65.9 million as of June 30, 2013. In addition, the Corporation’s decisions to prepay $22.5 million of subordinated debt during the third and fourth quarters of 2012 and $20.0 million of Federal Home Loan Bank (“FHLB”) borrowings in the first quarter of 2013, along with the 16 basis point decline in rate paid on deposits, contributed significantly to the $991 thousand decrease in interest expense for the three months ended June 30, 2013, as compared to the same period in 2012.
     
  • Revenue from wealth management services for the three months ended June 30, 2013 was $9.1 million, a $1.9 million increase, or 26.1%, from the $7.2 million generated in the same period in 2012. Wealth Management Division assets under management, administration, supervision and brokerage as of June 30, 2013 were $6.9 billion, an increase of $579 million, or 9.2%, from June 30, 2012. Organic growth due to the success of the division’s strategic initiatives was supplemented by market appreciation and other new business between the dates.
     
  • In addition to the increase in revenue for wealth management services mentioned above, non-interest income was also impacted by a $369 thousand increase in other operating income and a $188 thousand increase in gain on sale of residential mortgage loans for the three months ended June 30, 2013 as compared to the same period in 2012. The volume of residential mortgage loans sold for the three months ended June 30, 2013 increased slightly to $46.6 million as compared $44.2 million for the same period in 2012, with a 25 basis point increase in rate of gain on sale. Partially offsetting these improvements in non-interest income was a $716 thousand decrease in gain on sale of available for sale investment securities and a $141 thousand increase in loss on sale of other real estate owned between the periods.
     
  • Non-interest expense for the three months ended June 30, 2013 increased $2.4 million, to $20.5 million, as compared to $18.1 million for the same period in 2012. Contributing to this increase were a $1.2 million increase in salaries and benefits, a $614 thousand increase in occupancy costs and an $889 thousand increase in other operating expenses between the periods. Salaries and benefits increased primarily as a result of the addition of the branch and lending staff from FBD, the staffing related to the DTC acquisition, new personnel for our newly-opened full-service branch in Bala Cynwyd, Pennsylvania, which opened at the end of 2012, as well as annual salary increases. In addition to these new facilities, increased compliance requirements have necessitated the hiring of several new staff positions within our headquarters.  The increased occupancy costs were also related to the additions of DTC, FBD, and our new branch in Bala Cynwyd. The increase in other operating expenses was largely related to IT infrastructure improvements. Partially offsetting these cost increases were a $226 thousand decrease in due diligence and merger-related costs and a $178 thousand decrease in the impairment of mortgage servicing rights for the three months ended June 30, 2013, as compared to the same period in 2012.  Recent residential mortgage rate increases has lengthened the average life of our serviced-mortgage portfolio, resulting in a $91 thousand net recovery of prior impairments of our mortgage servicing rights, for the second quarter of 2013. 
     
  • The tax-equivalent net interest margin of 3.98% for the three months ended June 30, 2013 was a 14 basis point increase from the 3.84% tax-equivalent net interest margin for the same period in 2012. The increase was the result of a $141.2 million increase in average interest-earning assets, partially offset by a $61.9 million increase in average interest-bearing liabilities between the periods. While the tax-equivalent yield earned on average interest-earning assets declined by 12 basis points between periods, the tax-equivalent rate paid on average interest-bearing liabilities dropped by 34 basis points. This significant reduction in rate paid on interest-bearing liabilities was largely related to the prepayment of $22.5 million of subordinated debt during the third and fourth quarters of 2012, as well as the prepayment of $20.0 million of Federal Home Loan Bank (“FHLB”) advances during the first quarter of 2013.
     
  • Nonperforming loans and leases of $10.5 million as of June 30, 2013 were 0.73% of total portfolio loans and leases, as compared $14.8 million, or 1.06% of total portfolio loans and leases as of December 31, 2012. This $4.3 million decrease in nonperforming loans was concentrated in the construction, small business and home equity segments of the portfolio and was partially the result of $1.8 million of charge-offs of impaired loans, as well as additions of $566 thousand to other real estate owned related to three residential properties. For the three months ended June 30, 2013, the Corporation recorded net loan and lease charge-offs of $1.0 million, as compared to $903 thousand for the same period in 2012. The provision for loan and lease losses for each of the three month periods ended June 30, 2013 and 2012 was $1.0 million.

Financial Condition – June 30, 2013 Compared to December 31, 2012

  • Deposits of $1.55 billion, as of June 30, 2013, decreased $85.0 million from December 31, 2012. The 5.2% decrease was primarily comprised of decreases of $57.4 million and $15.1 million in time deposits and wholesale deposits, respectively, between the dates. The Corporation has continued its planned run-off of its higher-rate certificates of deposit.
     
  • The allowance for loan and lease losses as of June 30, 2013 was $14.4 million, or 1.01% of portfolio loans and $14.4 million, or 1.03% of portfolio loans and leases as of December 31, 2012.
     
  • The capital ratios for the Bank and the Corporation, as shown in the table below, indicate levels well above the regulatory minimum to be considered “well capitalized.”  In particular, the tangible equity ratios for both the Bank and the Corporation have improved from their December 31, 2012 levels of 7.72% and 7.60%, to 8.29% and 8.21%, respectively, at June 30, 2013. These increases were primarily the result of increases in retained earnings and issuance of common stock, along with a slight decline in total assets between the dates.
     
  • Total assets as of June 30, 2013 of $2.01 billion declined slightly from $2.04 billion as of December 31, 2012.
     
  • Total portfolio loans and leases of $1.43 billion as of June 30, 2013 increased by $32.5 million from December 31, 2012 as increases in commercial mortgages were partially offset by declines in residential mortgages and home equity lines and loans.

EARNINGS CONFERENCE CALL

The Corporation will hold an earnings conference call at 8:30 a.m. EDT on Friday, July 26, 2013. Interested parties may participate by calling 1-888-317-6016. A taped replay of the conference call will be available one hour after the conclusion of the call and will remain available through August 12, 2013. The number to call for the taped replay is 1-877-344-7529 and the conference number is 10030504.

The conference call will be simultaneously broadcast live over the Internet through a webcast on the investor relations portion of the Bryn Mawr Bank Corporation’s website. To access the call, please visit the website at http://services.choruscall.com/links/bmtc130726.html.   An online archive of the webcast will be available within one hour of the conclusion of the call. The Corporation has also recently expanded its Investor Relations website to include added resources and information for shareholders and interested investors. Interested parties are encouraged to utilize the expanded resources of the site for more information on Bryn Mawr Bank Corporation.

FORWARD LOOKING STATEMENTS AND SAFE HARBOR

This press release contains statements which, to the extent that they are not recitations of historical fact may constitute forward-looking statements for purposes of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Such forward-looking statements may include financial and other projections as well as statements regarding the Corporation’s future plans, objectives, performance, revenues, growth, profits, operating expenses or the Corporation’s underlying assumptions. The words “may,”  “would,” “should,” “could,” “will,” “likely,” “possibly,” “expect,” “anticipate,” “intend,” “estimate,” “target,” “potentially,” “probably,” “outlook,” “predict,” “contemplate,” “continue,” “plan,” “forecast,” “project,” “are optimistic,” “are looking,” “are looking forward” and “believe” or other similar words and phrases may identify forward-looking statements. Persons reading this press release are cautioned that such statements are only predictions, and that the Corporation’s actual future results or performance may be materially different.

Such forward-looking statements involve known and unknown risks and uncertainties.   A number of factors, many of which are beyond the Corporation’s control, could cause our actual results, events or developments, or industry results, to be materially different from any future results, events or developments expressed, implied or anticipated by such forward-looking statements, and so our business and financial condition and results of operations could be materially and adversely affected. Such factors include, among others, our need for capital, our ability to control operating costs and expenses, and to manage loan and lease delinquency rates; the credit risks of lending activities and overall quality of the composition of our loan, lease and securities portfolio; the impact of economic conditions, consumer and business spending habits, and real estate market conditions on our business and in our market area; changes in the levels of general interest rates, deposit interest rates, or net interest margin and funding sources; changes in banking regulations and policies and the possibility that any banking agency approvals we might require for certain activities will not be obtained in a timely manner or at all or will be conditioned in a manner that would impair our ability to implement our business plans; changes in accounting policies and practices; the inability of key third-party providers to perform their obligations to us; our ability to attract and retain key personnel; competition in our marketplace; war or terrorist activities; material differences in the actual financial results, cost savings and revenue enhancements associated with our acquisitions; and other factors as described in our securities filings. All forward-looking statements and information set forth herein are based on Management’s current beliefs and assumptions as of the date hereof and speak only as of the date they are made. The Corporation does not undertake to update forward-looking statements.

For a complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, as well as any changes in risk factors that we may identify in our quarterly or other reports filed with the SEC.

 

 

 

 

 

 

Bryn Mawr Bank Corporation

 

 

 

 

 

Consolidated Selected Financial Data – (unaudited)

 

 

 

 

 

 

 

(Dollars in thousands, except per share data)

 

 

June 30, 2013

 

 

 

 

 

 

 

 

 

 

For The Three Months Ended

 

 

 

June 30,

March 31,

December 31,

September 30,

June 30,

 

 

 

2013

2013

2012

2012

2012

 

 

Asset Quality Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans and leases

 $ 10,488

 $ 12,098

 $ 14,040

 $ 13,846

 $ 14,929

 

 

90 days or more past due loans, still accruing

 —

 728

 728

 —

 3,376

 

 

Nonperforming loans and leases

 10,488

 12,826

 14,768

 13,846

 18,305

 

 

Other real estate owned

 1,205

 545

 906

 412

 865

 

 

Total nonperforming assets

 $ 11,693

 $ 13,371

 $ 15,674

 $ 14,258

 $ 19,170

 

 

 

 

 

 

 

 

 

 

Troubled debt restructurings included in nonperforming assets

 $ 2,869

 $ 3,686

 $ 3,106

 $ 3,740

 $ 4,005

 

 

Troubled debt restructurings in compliance with modified terms

 8,157

 7,438

 8,008

 8,379

 8,302

 

 

Total troubled debt restructurings

 $ 11,026

 $ 11,124

 $ 11,114

 $ 12,119

 $ 12,307

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans and leases / portfolio loans

0.73%

0.91%

1.06%

1.05%

1.41%

 

 

Nonperforming assets / assets

0.58%

0.66%

0.77%

0.78%

1.03%

 

 

 

 

 

 

 

 

 

 

Net loan charge-offs / average loans (annualized)

0.29%

0.23%

0.08%

0.16%

0.26%

 

 

Net lease charge-offs (recoveries) / average leases (annualized)

0.11%

-0.13%

-0.38%

-0.23%

0.94%

 

 

Net loan and lease charge-offs / average loans and leases (annualized)

0.28%

0.22%

0.07%

0.16%

0.28%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Delinquency rate* – Performing and nonperforming loans and leases 30 days or more past due

0.73%

1.23%

1.02%

1.01%

1.36%

 

 

 

 

 

 

 

 

 

 

Performing loans and leases – 30-89 days past due

 $ 2,328

 $ 4,115

 $ 2,053

 $ 1,954

 $ 2,722

 

 

 

 

 

 

 

 

 

 

Delinquency rate* – Performing loans and leases – 30-89 days past due

0.16%

0.29%

0.15%

0.15%

0.21%

 

 

 

 

 

 

 

 

 

 

* to total loans and leases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Changes in the allowance for loan and lease losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 $ 14,447

 $ 14,425

 $ 13,638

 $ 13,140

 $ 13,040

 

 

 

 

 

 

 

 

 

 

Charge-offs

 (1,164)

 (830)

 (450)

 (618)

 (960)

 

 

 

 

 

 

 

 

 

 

Recoveries

 161

 48

 237

 116

 57

 

 

 

 

 

 

 

 

 

 

Net charge-offs

 (1,003)

 (782)

 (213)

 (502)

 (903)

 

 

 

 

 

 

 

 

 

 

Provision for loan and lease losses

 1,000

 804

 1,000

 1,000

 1,003

 

 

 

 

 

 

 

 

 

 

Balance, end of period

 $ 14,444

 $ 14,447

 $ 14,425

 $ 13,638

 $ 13,140

 

 

 

 

 

 

 

 

 

 

Allowance for loan and lease losses / loans and leases

1.01%

1.03%

1.03%

1.04%

1.01%

 

 

Allowance for loan and lease losses / nonperforming loans and leases

137.7%

112.6%

97.7%

98.5%

71.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bryn Mawr Bank Corporation

 

 

 

Consolidated Selected Financial Data – (unaudited)

 

 

 

(Dollars in thousands, except per share data)

 

 

 

June 30, 2013

 

 

 

 

For The Three Months Ended or As Of

 

 

 

June 30,

March 31,

December 31,

September 30,

June 30,

 

 

 

2013

2013

2012

2012

2012

 

 

Selected ratios (annualized):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

1.28%

1.08%

1.11%

1.18%

1.18%

 

 

Return on average shareholders’ equity

11.90%

10.56%

10.47%

10.93%

11.24%

 

 

Return on average tangible equity (2)

16.00%

14.42%

14.09%

14.89%

14.97%

 

 

Yield on loans and leases*

5.13%

5.16%

5.24%

5.21%

5.31%

 

 

Yield on interest earning assets*

4.27%

4.16%

4.27%

4.28%

4.39%

 

 

Cost of interest bearing funds

0.39%

0.43%

0.54%

0.66%

0.72%

 

 

Net interest margin*

3.98%

3.85%

3.86%

3.78%

3.84%

 

 

Book value per share

 $ 15.71

 $ 15.57

 $ 15.17

 $ 15.02

 $ 14.73

 

 

Tangible book value per share

 $ 11.75

 $ 11.55

 $ 11.08

 $ 11.14

 $ 10.77

 

 

Period end shares outstanding

 13,528,078

 13,500,413

 13,414,552

 13,399,635

 13,316,469

 

 

 

 

 

 

 

 

 

 

Selected data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loans originated

 $ 55,066

 $ 65,105

 $ 82,458

 $ 64,455

 $ 51,427

 

 

 

 

 

 

 

 

 

 

Mortgage loans sold – servicing retained

 $ 46,209

 $ 51,414

 $ 71,596

 $ 54,992

 $ 41,986

 

 

Mortgage loans sold – servicing released

 347

 189

 —

 —

 2,238

 

 

Total mortgage loans sold

 $ 46,556

 $ 51,603

 $ 71,596

 $ 54,992

 $ 44,224

 

 

 

 

 

 

 

 

 

 

Yield on loans sold

3.20%

2.94%

3.39%

3.34%

2.95%

 

 

 

 

 

 

 

 

 

 

Mortgage loans serviced for others

 $ 623,498

 $ 603,734

 $ 595,317

 $ 583,859

 $ 575,533

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total wealth assets under management, administration, supervision and brokerage (1)

 $ 6,854,838

 $ 6,987,974

 $ 6,663,212

 $ 6,482,835

 $ 6,275,940

 

 

 

 

 

 

 

 

 

 

* Yield on loans and leases, interest-earning assets and net interest margin are calculated on a tax-equivalent basis.

 

 

(1) Brokerage assets represent assets held at a registered broker dealer under a networking agreement.

 

 

(2) Average tangible equity equals average shareholders’ equity minus average goodwill and average other intangible assets.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For The Six Months Ended June 30,

 

 

 

 

 

2013

 

2012

 

 

Selected ratios (annualized):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

1.18%

 

1.17%

 

 

Return on average shareholders’ equity

 

 

11.25%

 

11.11%

 

 

Return on average tangible equity (1)

 

 

15.23%

 

14.57%

 

 

Yield on loans and leases*

 

 

5.15%

 

5.32%

 

 

Yield on interest-earning assets*

 

 

4.22%

 

4.45%

 

 

Cost of interest-bearing liabilities

 

 

0.41%

 

0.74%

 

 

Net interest margin*

 

 

3.91%

 

3.88%

 

 

 

 

 

 

 

 

 

 

Selected data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loans originated

 

 

 $ 120,171

 

 $ 106,812

 

 

 

 

 

 

 

 

 

 

Mortgage loans sold – servicing retained

 

 

 $ 97,623

 

 $ 74,764

 

 

Mortgage loans sold – servicing released

 

 

 536

 

 3,461

 

 

Total mortgage loans sold

 

 

 $ 98,159

 

 $ 78,225

 

 

 

 

 

 

 

 

 

 

* Yield on loans and leases, interest earning assets and net interest margin are calculated on a tax-equivalent basis.

 

 

(1) Average tangible equity equals average shareholders’ equity minus average goodwill and average other intangible assets.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bryn Mawk Bank Corporation

 

 

 

Consolidated Selected Financial Data – (unaudited)

 

 

 

(Dollars in thousdands, except per share data)

 

 

 

June 30, 2013

 

 

 

 

 

 

 

Investment Portfolio – Available for Sale

As of June 30, 2013

 

As of December 31, 2012

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

Net

 

 

 

Net

 

Amortized

Fair

Unrealized

 

Amortized

Fair

Unrealized

SECURITY DESCRIPTION

Cost

Value

Gain / (Loss)

 

Cost

Value

Gain / (Loss)

 

 

 

 

 

 

 

 

U.S. Treasury securities

 $ 102

 $ 100

 $ (2)

 

 $ —

 $ —

 $ —

 

 

 

 

 

 

 

 

Obligations of U.S. government and agencies

 82,170

 81,159

 (1,011)

 

 73,183

 73,872

 689

 

 

 

 

 

 

 

 

State political subdivisions

 39,353

 39,055

 (298)

 

 30,243

 30,384

 141

 

 

 

 

 

 

 

 

Mortgage-backed securities

 131,860

 132,697

 837

 

 128,537

 131,826

 3,289

 

 

 

 

 

 

 

 

Collateralized mortgage obligations

 51,780

 51,937

 157

 

 62,116

 62,703

 587

 

 

 

 

 

 

 

 

Other debt securities

 2,400

 2,398

 (2)

 

 1,900

 1,900

 —

 

 

 

 

 

 

 

 

Bond mutual funds

 11,456

 11,423

 (33)

 

 11,456

 11,527

 71

 

 

 

 

 

 

 

 

Investment CDs

 2,120

 2,125

 5

 

 2,350

 2,364

 14

 

 

 

 

 

 

 

 

Other investments

 1,909

 2,067

 158

 

 1,962

 2,038

 76

 

 

 

 

 

 

 

 

Total Investment Portfolio

 $ 323,150

 $ 322,961

 $ (189)

 

 $ 311,747

 $ 316,614

 $ 4,867

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios

 

 

 

 

 

 

 

 

Regulatory Minimum

 

 

 

 

 

 

Bryn Mawr Trust Company

To Be

June 30,

March 31,

December 31,

September 30,

June 30,

 

 

Well Capitalized

2013

2013

2012

2012

2012

 

 

 

 

 

 

 

 

 

Tier I Capital to Risk Weighted Assets (“RWA”)

6.00%

11.58%

11.52%

11.20%

11.99%

11.75%

 

Total (Tier II) Capital to RWA

10.00%

12.55%

12.51%

12.20%

14.09%

14.36%

 

Tier I Leverage Ratio

5.00%

9.07%

8.70%

8.84%

9.23%

9.14%

 

Tangible Equity Ratio

 

8.29%

8.11%

7.72%

8.85%

8.41%

 

 

 

 

 

 

 

 

 

Bryn Mawr Bank Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier I Capital to RWA

6.00%

11.47%

11.33%

11.02%

11.64%

11.30%

 

Total (Tier II) Capital to RWA

10.00%

12.44%

12.32%

12.02%

13.74%

13.90%

 

Tier I Leverage Ratio

5.00%

9.00%

8.58%

8.72%

8.98%

8.80%

 

Tangible Equity Ratio

 

8.21%

7.98%

7.60%

8.58%

8.07%

 

CONTACT: Ted Peters, Chairman
         610-581-4800
         J. Duncan Smith, CFO
         610-526-2466

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Thursday, July 25th, 2013 EN No Comments

First Foundation Bank Chooses Innovest Systems

First Foundation Bank, a private financial firm offering banking, estate planning, wealth management, trust services and philanthropic services, today announced that it has selected Innovest Systems’ InnoTrust as its trust platform.

New York, NY (PRWEB) July 25, 2013

First Foundation Bank, a private financial firm offering banking, estate planning, wealth management, trust services and philanthropic services, today announced that it has selected Innovest Systems’ InnoTrust as its trust platform. InnoTrust will provide First Foundation Bank with a robust, scalable, and innovative solution to support its trust services.

In choosing Innovest Systems as its trust system provider, First Foundation Bank was able to open an additional Las Vegas office, meeting the needs of larger prospective clients. Since implementing InnoTrust, First Foundation has onboarded several high net worth accounts, and the firm is positioned to benefit from increased growth opportunities.

Dave Rahn, president of First Foundation Bank says, “We selected Innovest to provide a state-of-the-art trust platform that will allow our firm to continue developing industry leading financial solutions. With Innovest’s commitment to modern-era technology and InnoTrust’s intuitive, web-based applications, the partnership is a natural fit for our growing business.”

Glenn Schmidt, Innovest’s chief operating officer added, “Innovest is thrilled to deliver First Foundation Bank a comprehensive, end-to-end solution for the firm’s trust and wealth management services. With InnoTrust’s robust front end user interface, speed to market, and flexibility in seamlessly integrating with best-of-breed third party partners, First Foundation Bank is positioned to expand its leadership in the marketplace.”

Innovest Systems’ flagship product, InnoTrust, is a secure, integrated, real-time trust accounting and wealth management technology platform provided via a Software as a Service (SaaS) model. By combining InnoTrust’s state of the art accounting and reporting capabilities with best of breed providers with complementary capabilities, Innovest delivers a comprehensive technology solution to the wealth management market.

About Innovest Systems

Innovest Systems, LLC is a financial technology firm that provides technology-driven solutions to trust and wealth management companies. Innovest’s flagship product, InnoTrust, delivers a secure, integrated, real-time system offered in a Software as a Service (SaaS) environment. Innovest’s technology meets the needs of the world’s largest global financial services firms, as well as smaller independent trust and wealth management companies. Innovest is headquartered in New York City. For more information about Innovest Systems, visit http://www.innovestsystems.com.

About First Foundation Bank

First Foundation Inc. is a private financial firm that offers banking, estate planning, wealth management, philanthropic consulting and trust services seamlessly. Founded in 1990, this full-service firm provides comprehensive financial services through its affiliates.

First Foundation’s goal is to offer clients a single source to handle their investments, insurance, estate planning, charitable foundation administration and other financial needs. For more information, please visit the Company’s website at http://www.ff-inc.com.

For the original version on PRWeb visit: http://www.prweb.com/releases/2013/7/prweb10964743.htm

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Thursday, July 25th, 2013 EN No Comments

First Community Bancshares, Inc. Announces Second Quarter 2013 Results

BLUEFIELD, Va., July 25, 2013 (GLOBE NEWSWIRE) — First Community Bancshares, Inc. (Nasdaq:FCBC) (www.fcbinc.com) (the “Company”) today reported net income for the quarter and six months ended June 30, 2013, of $5.44 million and $12.58 million, respectively. Net income available to common shareholders totaled $5.18 million, or $0.25 per diluted common share, for the quarter ended June 30, 2013. Net income available to common shareholders totaled $12.07 million, or $0.59 per diluted common share, for the six months ended June 30, 2013. Excluding nonrecurring income and expense items, core earnings for the quarter and six months ended June 30, 2013, totaled $5.37 million and $12.35 million, respectively.

Second Quarter 2013 Highlights –

  • Net income was $5.44 million, an increase of $1.36 million, or 33.28%, compared with the second quarter of 2012.
  • Net interest income was $22.86 million, an increase of $3.38 million, or 17.34%, compared with the second quarter of 2012.
  • The tax equivalent net interest margin increased 14 basis points to 4.07% for the second quarter of 2013 compared with the second quarter of 2012.
  • The average loan balance increased $179.80 million, or 11.89%, to $1.69 billion for the second quarter of 2013 compared with the second quarter of 2012.
  • Tangible book value per common share increased $0.34 per share to $11.53 for the second quarter of 2013 compared with the second quarter of 2012.

Net Interest Income

Net interest income increased $3.38 million, or 17.34%, to $22.86 million for the second quarter of 2013 compared with the second quarter of 2012. The tax equivalent net interest margin increased 14 basis points to 4.07% for the second quarter of 2013 compared with 3.93% for the second quarter of 2012. Total interest income increased $3.23 million, or 13.36%, to $27.41 million for the second quarter of 2013 compared with the second quarter of 2012. The increase reflects the addition of loan portfolios from the Peoples Bank of Virginia (“Peoples”) and Waccamaw Bank (“Waccamaw”) acquisitions that occurred during the second quarter of 2012. The tax equivalent yield on loans increased 20 basis points to 5.76% while the average loan balance increased $179.80 million, or 11.89%, to $1.69 billion for the second quarter of 2013 compared with the second quarter of 2012. Interest on loans includes accretion related to the Peoples and Waccamaw acquisitions of $729 thousand and $3.03 million, respectively, for the second quarter of 2013.

Total interest expense decreased $148 thousand, or 3.15%, to $4.55 million for the second quarter of 2013 compared with the second quarter of 2012. Deposit costs decreased $77 thousand, or 3.26%, to $2.28 million for the second quarter of 2013 compared with the second quarter of 2012, reflecting an 11 basis point decrease in the average rate paid on interest-bearing deposits. Borrowing costs decreased $71 thousand, or 3.04%, to $2.27 million for the second quarter of 2013 compared with the second quarter of 2012. The average rate paid on interest-bearing liabilities decreased 16 basis points to 0.93% for the second quarter of 2013 compared with the second quarter of 2012. The average balance of interest-bearing liabilities increased $210.71 million, or 12.10%, to $1.95 billion for the second quarter of 2013 compared with the second quarter of 2012, which included a $224.90 million increase in average interest-bearing deposits and a $14.19 million decrease in average total borrowings. The increase in average interest-bearing liabilities was primarily the result of a full quarter’s impact from the Peoples and Waccamaw acquisitions in the second quarter of 2013 versus a partial impact in the second quarter of 2012.

Noninterest Income

Noninterest income decreased $1.50 million, or 17.92%, to $6.85 million for the second quarter of 2013 compared with the second quarter of 2012. Wealth management revenues increased $31 thousand, or 3.30%, for the second quarter of 2013 compared with the second quarter of 2012. The Trust and Wealth Management Divisions reported $900 million in assets under management as of June 30, 2013. Service charges on deposit accounts reported a slight decrease of $14 thousand and other service charges and fees increased $229 thousand, or 14.64%, for the second quarter of 2013 compared with the second quarter of 2012. Insurance commissions decreased $28 thousand, or 2.10%, to $1.31 million for the second quarter of 2013 compared with the same quarter of 2012. The Company realized a $113 thousand net gain on sale of securities for the second quarter of 2013, which was an increase of $122 thousand compared to a net loss of $9 thousand for the second quarter of 2012. Amortization expense of $1.66 million was recorded relating to the FDIC indemnification asset during the second quarter of 2013 as a result of improvements in actual and expected cash flows on covered assets. Other operating income included a negative fair value mark of $435 thousand on loans held for sale and the associated secondary market loan production pipeline for the second quarter of 2013 compared to a positive mark of $76 thousand recorded for the second quarter of 2012. The Company incurred no other-than-temporary impairment charges during the second quarters of 2013 or 2012.

Noninterest Expense

Noninterest expense decreased $1.60 million, or 7.94%, to $18.53 million for the second quarter of 2013 compared with the second quarter of 2012. Salaries and employee benefits increased $1.07 million, or 12.01%, to $9.96 million for the second quarter of 2013 compared with the second quarter of 2012. Salaries and employee benefits attributed to the Peoples and Waccamaw acquisitions totaled $1.32 million during the second quarter of 2013, which represents an increase of $831 thousand for the quarter ended June 30, 2013, compared with the same quarter of 2012. Occupancy, furniture, and equipment expense increased $466 thousand, or 17.73%, to $3.10 million for the second quarter of 2013 compared with the second quarter of 2012, reflecting the substantial increase in branch count and facilities associated with the Peoples and Waccamaw acquisitions. Other operating expense increased $105 thousand, or 2.23%, to $4.82 million for the second quarter of 2013 compared with the second quarter of 2012. Other operating expense included a net loss on sales and expenses associated with other real estate owned of $170 thousand for the second quarter of 2013 compared to $270 thousand for the second quarter of 2012. The efficiency ratio for the second quarter of 2013 was 60.60% compared to 57.58% for the second quarter of 2012.

Provision for Loan Losses and Asset Quality

The provision for loan losses increased $1.59 million, or 97.84%, to $3.21 million for the second quarter of 2013 and $1.81 million, or 71.01%, to $4.35 million for the six months ended June 30, 2013, compared with the same periods of the prior year.

The allowance for loan losses decreased to $23.12 million at June 30, 2013, compared with $25.77 million at December 31, 2012, and $26.17 million at June 30, 2012. Non-covered loans and other real estate owned are those assets not covered by loss share agreements between the FDIC and the Bank in relation to the acquisition of Waccamaw. The allowance for loan losses as a percentage of non-covered loans was 1.53% at June 30, 2013, compared with 1.70% at December 31, 2012, and 1.67% at June 30, 2012. For the second quarter of 2013, net charge-offs increased $3.65 million, or 2.84%, compared with the fourth quarter of 2012, and $3.68 million, or 2.95%, compared with the second quarter of 2012. Annualized net charge-offs were 1.31% for the second quarter of 2013, which represents an increase of 93 basis points compared with 0.38% for the second quarter of 2012.

During the second quarter of 2013, net charge-offs totaled $4.93 million which were primarily impacted by four loan relationships; the most significant of which was a $2.10 million write down of a relationship within the construction, development, and other land segment. The Company had previously identified this problem relationship and had established a $1.80 million specific allocation, which was utilized for the write down. 

Non-covered delinquent loans, comprised of loans 30 days or more past due and nonaccrual loans, as a percentage of total non-covered loans measured 2.53% at June 30, 2013, compared to 2.46% for the same period of the prior year. Non-covered nonaccrual loans totaled $29.13 million at June 30, 2013, compared to $23.93 million at December 31, 2012, and $27.95 million at June 30, 2012. At quarter end, the Company’s non-covered nonperforming loans as a percentage of total non-covered loans were 1.95% and non-covered nonperforming assets as a percentage of total non-covered assets were 1.39%.

Total nonperforming assets, including covered and non-covered loan portfolios, consisted of $33.01 million in nonaccrual loans, $276 thousand in unseasoned, accruing troubled debt restructurings, and $11.15 million in other real estate owned at June 30, 2013. In comparison, total nonperforming assets consisted of $28.25 million in nonaccrual loans, $6.01 million in unseasoned, accruing troubled debt restructurings, and $9.00 million in other real estate owned at December 31, 2012.

Balance Sheet and Capital

Consolidated assets totaled $2.65 billion as of June 30, 2013, a decrease of $78.13 million, or 2.86%, compared with $2.73 billion at December 31, 2012. Consolidated liabilities totaled $2.30 billion as of June 30, 2013, a decrease of $73.75 million, or 3.11%, compared with $2.37 billion at December 31, 2012. Total stockholders’ equity decreased to $351.94 million as of June 30, 2013, compared with $356.32 million at December 31, 2012. Book value per as-converted common share decreased to $16.63 for the quarter ended June 30, 2013, compared with $16.76 for the quarter ended December 31, 2012. Tangible book value per common share decreased to $11.53 for the quarter ended June 30, 2013, compared with $11.66 for the quarter ended December 31, 2012. The decrease was largely a function of declines in investment securities’ market values as a result of the increase in benchmark interest rates noticed at the end of the second quarter of 2013. The Company paid a cash dividend of $0.12 per common share during the second quarter of 2013.

The Company significantly exceeds regulatory “well capitalized” targets as of June 30, 2013, with a total risk-based capital ratio of 17.71%, Tier 1 risk-based capital ratio of 16.45%, and a Tier 1 leverage ratio of 10.54%.

Non-GAAP Financial Measures

The Company prepares its financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). This press release also refers to certain non-GAAP financial measures that the Company believes provide investors with important information, when used in conjunction with results presented in accordance with GAAP, regarding our operational performance.

Core earnings are a non-GAAP financial measure that excludes certain items from net income. Excluded items include gains, losses, and impairment losses on securities; goodwill and intangible impairment; amortization of intangibles; taxes; and other nonrecurring income and expense items. Management believes that core earnings provide the Company and investors a valuable tool to evaluate the Company’s financial results.

The efficiency ratio is a non-GAAP financial measure that is computed by dividing adjusted noninterest expense by the sum of tax equivalent net interest income and adjusted noninterest income. Management believes this measure provides investors with important information about the Company’s operating expense control and efficiency of operations. Management also believes this ratio focuses attention on the core operating performance of the Company over time and is highly useful in comparing period-to-period operating performance of core business operations. The efficiency ratio used by the Company may not be comparable to efficiency ratios reported by other financial institutions.

Tangible book value per common share is a non-GAAP financial measure that is defined as stockholders’ equity less goodwill and other intangibles, divided by as-converted common shares outstanding. Average tangible common equity is a non-GAAP financial measure that is defined as average stockholders’ equity less average goodwill, other intangibles, and the preferred liquidation preference.

Investor Relations

The Company will host an investor and media teleconference and webcast on Friday, July 26, 2013, at 11:00 a.m. To access the teleconference, the toll-free number is (877) 407-8033. Individuals may listen to the live or archived webcast of the conference call. To listen to the webcast, visit www.fcbinc.com and follow the link under the Investor Relations section. The Company’s press release and financial summary will be available in this section, as well. Copies of the Company’s second quarter 2013 earnings press release and financial summary will be made available upon request via email. To request a copy, contact David D. Brown, Chief Financial Officer, at (276) 326-9000.

About First Community Bancshares, Inc.

First Community Bancshares, Inc., headquartered in Bluefield, Virginia, is a $2.65 billion financial holding company and the parent company of First Community Bank. First Community Bank operates seventy-two banking locations throughout Virginia, West Virginia, North Carolina, South Carolina, and Tennessee. First Community Bank offers wealth management and investment services through its Trust Division and First Community Wealth Management, a registered investment advisory firm. The Trust Division and First Community Wealth Management managed assets with a market value of $900 million as of June 30, 2013. The Company is also the parent company of Greenpoint Insurance Group, Inc., a full-service insurance agency headquartered in High Point, North Carolina, that operates seven insurance locations throughout Virginia, West Virginia, and North Carolina. The Company’s common stock is traded on the NASDAQ Global Select Market under the symbol, “FCBC.” Additional investor information can be found on the Company’s website at www.fcbinc.com.

This news release may include forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include: changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Company’s Securities and Exchange Commission reports including, but not limited to, the Annual Report on Form 10-K for the most recent year ended. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

CONTACT: David D. Brown
         (276) 326-9000

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Thursday, July 25th, 2013 EN No Comments

Wealth management boosts Ameriprise profit


Wed Jul 24, 2013 5:39pm EDT

* 2nd-qtr net profit $322 mln vs $224 mln year earlier

* 2nd-qtr adj earnings $1.69/shr vs est $1.62/shr

* Wealth management business revenue rises 13 pct

* Total assets under management rise to $703 bln

July 24 (Reuters) – Financial services company Ameriprise
Financial Inc reported a stronger-than-expected 44
percent rise in second-quarter profit, driven by its wealth
management business.

Assets under management rose 13 percent to $373 billion in
the quarter, the company said on Wednesday.

Revenue in the wealth management business rose 13 percent to
$1.08 billion, making up about 40 percent of total revenue.

Minneapolis-based Ameriprise has been successful in
recruiting veteran advisers from larger bank-owned brokerages
over the past year.

Many of Ameriprise’s big-broker recruits in 2012 came from
Bank of America Merrill Lynch, Morgan Stanley Wealth Management,
and Wells Fargo Advisors, based on moves tracked by Reuters.

The addition of veteran advisers helps to drive revenue as
they tend to bring significant client assets with them.

Total assets under management and administration, which
includes both the wealth and asset management businesses, rose 7
percent to $703 billion in the quarter.

Net profit rose to $322 million, or $1.54 per share, from
$224 million, or 99 cents per share, a year earlier.

On an operating basis, the company earned $1.69 per share
while total revenue rose about 9 pct to $2.75 billion.

Analysts on average had expected earnings of $1.62 per share
on revenue of $2.77 billion.

Shares of Ameriprise, which have risen about 80 percent in
the past year, closed at $86.24 on the New York Stock Exchange.
The stock was unchanged in trading after the bell.

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Wednesday, July 24th, 2013 EN No Comments