Archive for August, 2013

SEC says Indiana Man Used Ponzi Scheme to Fund a Reality TV Show

The Securities and Exchange Commission charged an Indiana man with running a $6 million Ponzi scheme that defrauded investors out of their retirement savings and used the money to invest in a bridal store, a bounty hunter reality television show, and a soul food restaurant owned by the bounty hunters.

The SEC on Monday said it obtained an emergency court order to freeze the assets of defendants John Marcum and his firm Guaranty Reserves Trust LLC.

Marcum, 49, of Noblesville, Indiana, …


Tuesday, August 27th, 2013 EN No Comments

JPMorgan Told to Pay Blavatnik $42.5 MLN Over Mortgage Losses


Tuesday, August 27th, 2013 EN No Comments

INSIGHT-Trades from 1990s Come Back to Haunt Wall Street

In the 1990s, U.S. banks came up with a clever idea: using life insurance to bet that their employees would eventually die. Now those wagers are coming back to haunt Wall Street banks for reasons that have little to do with their employees’ longevity.

For more than a decade, the lenders purchased life insurance policies, known as “bank-owned life insurance,” on employees in bulk. These policies were unusual: banks chose how the premium would be invested; and were on the …


Monday, August 26th, 2013 EN No Comments

Second annual North Bay wealth manager survey

Second annual North Bay wealth manager survey


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Welcome to the North Bay Business Journal‘s second annual survey of wealth managers serving the North Bay.

This section brings together a very broad range of wealth management advisers representing many sizes and approaches. It includes a list of managers who chose to participate in and passed the rigorous survey testing of the National Association of Board Certified Advisory Practices. The selected managers for both 2013 and 2012 are included. [See the list “NABCAP surveyed wealth advisors serving the North Bay.”]

NABCAP is a Colorado-based nonprofit dedicated to advancing the highest principles of the industry. In addition to the North Bay, NABCAP has performed similar surveys in dozens of markets across the U.S. including the greater Bay Area.

In addition to the NABCAP list, the Business Journal contacted a wide range of advisers across the North Bay to seek their insights into the current conditions of the investment markets. [See “Wealth managers talk about challenges, risk and what’s ahead.”]

We hope you find the information helpful as you navigate the financial markets or as you seek out an adviser whose style and approach meets your unique needs.

—The Business Journal

Copyright © 1988–2013 North Bay Business Journal
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Monday, August 26th, 2013 EN No Comments

Noah Continues Shift To Recurring Revenue, But Expects Softer Second Half …

Noah Holdings (NOAH) is a leading online wealth management services provider in China, catering to high net-worth individuals there. It mainly distributed over-the-counter financial products.

J.P.Morgan analysts Josh Klaczek and Joy Wu like Noah’s second-quarter earnings and raised their price target from $9.50 to $16, implying 19.1 times 2013 P/E or 4.2 times P/B.

In the analysts’ own words:

Sales of fixed income products surged +63% Q/Q (+164% Y/Y), and now make up 86% of transactions from 68% last year 43% in 2011. Moreover, the group continues to drive strong growth in its Asset Management business, with AUM [asset under management] now at $3bn, up from $1.7bn in 1Q13 and just $200mm at the end of 2011.

The consistent increase in both fixed income sales AUM underlies the rise of recurring revenues, which doubled the past two years in terms of overall contribution.

For technology companies, higher recurring revenue means lower operational risk.

So why the downgrade from Buy to Hold? Interbank liquidity stress (recall SHIBOR scare in June?) may have driven high-net-worth individuals to places like Noah in the second quarter. When liquidity eases, Noah may see its business soften:

There is some risk that recent liquidity stress in interbank drove outsized product sales, with active clients +46% Q/Q, which likely decelerates in 2H13.

Noah gained mouth-watering 188% this year. But it is a volatile stock. It lost 20% in one day after the SHIBOR spike in June. Any liquidity scare from China can easily knock this stock down from its high horse.


Monday, August 26th, 2013 EN No Comments

InTouch Credit Union’s Wealth Management Investment Program Recognized …

Plano, TX, August 24, 2013 –(– InTouch Credit Union (ITCU) announced that its investment services group, with registered representatives affiliated with broker dealer and Registered Investment Adviser CUSO Financial Services, LP (CFS) was a recent recipient of CFS’ 2012 Breakthrough Award at the CFS “Passion. Innovation. Success.” 2013 Annual Conference, which was recently held in San Diego, California.

The Breakthrough Award recognizes the significant growth of a credit union’s investment and insurance program revenues throughout the year. The Wealth Management department at ITCU was able to strengthen its program and generate additional revenue by delivering investment, insurance and retirement planning services to the credit union member base.

“We are proud to be acknowledged for our Wealth Management team’s accomplishments and the excellent service delivery that they have provided to our members over the years. This award is testament to their expert knowledge and stellar customer care,” said Diane Gerstner, Executive Vice President of InTouch Credit Union.

The annual awards are presented by CFS as a way to recognize outstanding investment and insurance programs for their dedication to high standards, commitment to superior service and outstanding performance that helps each organization meet and exceed its goals.

In addition to financial planning and investment services, InTouch also offers consumer, home and auto loans, deposit services and online banking services.

About InTouch Credit Union
InTouch Credit Union (ITCU) is a financial cooperative that has been proudly serving its members since 1974. InTouch Credit Union is committed to creating member value by placing the financial needs and delivery of exceptional service to the membership ahead of profit while maintaining fiscal responsibility.

With 19 branches in four states and additional access to a nationwide network of over 5,000 CU Service Centers, ITCU currently boasts assets near $800 million and serves 72,000 plus members across all 50 states and in more than 20 countries around the world. Eligibility requirements are available on for potential members to review. InTouch Credit Union can also be found on Facebook, Twitter, Google+ and LinkedIn.

About CUSO Financial Services, L.P.
Established in 1997, CUSO Financial Services, L.P. (Member FINRA/SIPC) is headquartered in San Diego. With branch offices located nationwide, CFS is a full-service broker/dealer and SEC Registered Investment Adviser offering customized investment and insurance solutions to credit unions. For more information, call 858-530-4400 or visit

Investment products are offered by CUSO Financial Services, L.P. (Member FINRA/SIPC) and are not NCUA/NCUSIF insured, not credit union guaranteed, and may lose value.

Contact Information:
InTouch Credit Union
Liz Cappon
Contact via Email

Read the full story here:

Press Release Distributed by


Sunday, August 25th, 2013 EN No Comments

Stock Investors Embark on a European Tour


  • and


Things are starting to come together for the continent that almost fell apart.

The economy in the 17-member euro zone is growing again—slowly—after contracting for more than a year. Signs of revival are showing up in data on business activity and consumer confidence. As in the U.S., central bankers’ extraordinary commitment to injecting cheap money into their economies has so far helped avert disaster. The euro zone hasn’t splintered, as some feared, and no country has dropped the common currency.

As worries ease, markets are up from Ireland to Italy. Benchmark national indexes in the U.K., France and Germany have climbed at least 10% this year. The pan-European Stoxx Europe 600—akin to the SP 500 in the U.S.—is up 19% in the 13 months since Mario Draghi said the European Central Bank, which he heads, was “willing to do whatever it takes to preserve the euro.”

Embarking on a European Tour

View Graphics

Randy Pollak

Investors planning their own grand investing tour of Europe’s stocks should know there still are discounts available. But as many a shopper in the markets of London, Paris or Rome will agree, it can pay to be choosy. For instance, many fund managers see more near-term upside in consumer goods and banks than in European utilities or energy firms.

There are several options for investors. Low-cost index funds, such as the Vanguard FTSE Europe exchange-traded fund—which charges 0.12% in fees, or $12 for every $10,000 invested—offer broad exposure that includes many of the region’s global heavyweights. There also are actively managed, Europe-focused funds run by stock pickers who try to beat benchmark indexes, and global funds that feature a hefty dose of European exposure.


Some European-stock watchers like Accor, which licenses hotel brand Sofitel.

In addition, many European companies issue American depositary receipts that trade like shares on U.S. exchanges. Some firms only trade on home-country exchanges, which U.S. investors can access through brokers or international accounts, though this typically involves taking on currency risk and navigating complicated tax rules.

Global fund managers now have more of their portfolios in euro-zone equities than at any point since January 2008, according to a monthly survey Bank of America Merrill Lynch conducted in early August. U.S. investors had poured $3.7 billion into Europe-focused equity funds this month through Wednesday, according to data-provider EPFR Global—more than in any full month this year.

Nevertheless, European stocks have generally lagged behind their U.S. counterparts this year. Some investors think Europe’s shares could climb higher.

Enlarge Image


“Europe is in a recovery cycle. It’s in a bull-market cycle. And it’s earlier in the cycle than the U.S. is,” says Michael Shaoul, chairman of Marketfield Asset Management, in New York. He says the firm, which manages $13 billion, has more funds allocated to Europe than any other region outside the U.S.

Companies that focus on domestic European markets may also be in a better position to benefit from any uptick in demand from long-suffering consumers.

“There are much more opportunities in a Spanish media stock, or Europe-focused banks that will benefit from a European recovery, than a global company that has done well through the crisis and has been supported by emerging-market sales,” says Dean Tenerelli, a London-based European equity manager at T. Rowe Price Group

who manages €1.2 billion ($1.6 billion) in assets.

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Bloomberg News

Inditex, owner of Zara fashion stores.

But the recent rebound also highlights two major risks.

First, many individual stocks have already risen sharply, particularly Europe-based multinationals that get much of their revenue abroad. German insurer Allianz

is up 30% over the past year, as is Dutch electronics giant Koninklijke Philips Electronics.

“The easy money has been made,” says Philippe Brugère-Trélat, portfolio manager of the Mutual European Fund at Franklin Templeton Investments. The fund has about $2 billion in assets and charges 1.43%. It has gained 23% over the past year through Thursday, according to Morningstar.

The second risk is that Europe’s deep problems haven’t been solved.

Persistent unemployment, particularly among the young, hampers the outlook for consumer spending and growth. Coming elections in Germany and elsewhere are reminders of the potential for upheaval, and weakness in Europe’s export markets could also hit Europe-based stocks.

“There are still plenty of pitfalls,” says Tim Stevenson, a manager of the €2.2 billion Henderson Horizon Pan European Equity Fund at Henderson Global Investors in London. The fund isn’t open to investors in the U.S.

Stock buyers also need to be alert to how central-bank actions could affect currency movements—and returns. If the U.S. Federal Reserve tightens monetary policy sooner than the European Central Bank, the dollar could strengthen against the euro, reducing returns for U.S. investors—though the shift could also boost the prospects of European companies, particularly exporters.

[image]Associated Press

Nordic pharma Novo Nordisk.

Despite the caveats, further signs that the old world’s economy has new life, such as a rise in corporate earnings, could send European stocks higher, fund managers say.

Here is what investors need to know about industries that could benefit, and the developments that could propel stocks in those areas higher:

Catering to consumers. Any investor betting on a European revival should understand how bad things seem to the average consumer there. Here is a simple way to look at it: 55% of respondents in the biannual Eurobarometer survey released last month believe “the worst is still to come” for the job market.

That counted as good news. In the fall of 2012, 62% of respondents felt that way.

Ordinary Europeans have been so battered during years of crisis that the threshold for improvement is low. That means companies catering to those beleaguered consumers could be among the first to feel the impact if the fledgling economic recovery takes hold.

Among the candidates are firms such as consumer-goods giant Unilever

and cosmetics firm L’Oréal, fund managers say. Both are sprawling multinationals, but they also rely on Europe for a significant portion of their sales.

Companies that sell products to relatively well-heeled consumers also could profit from an improving economy, if their customers feel freer to spend. Risteard Hogan, who manages the Fidelity Europe Fund, likes Christian Dior, whose shares are trading at a lower multiple of earnings over the past 12 months than the Stoxx Europe 600, based on FactSet data. Dior’s shares are up 17% over the past year.

Mr. Hogan also likes Marr,

an Italian food distributor, which he says is “benefiting from consolidation in the domestic market.” Marr’s shares are up 25% over the past year. The Fidelity mutual fund has $756 million in assets and charges 0.80% in fees, according to Morningstar.

Firms such as Spain’s Industria de Diseño Textil,

or Inditex, which owns fashion stores such as Zara and Massimo Dutti, illustrate the opportunity and the risk for investors considering buying shares now. The company’s shares are up 19% over the past year, in Spanish trading, and are trading at a higher multiple of earnings than the Europe index, according to FactSet.

“Inditex has impressively been able to retain sales growth despite being a Spanish company,” says Franz Weis, a fund manager for the €1.2 billion Comgest Growth Europe fund, which isn’t distributed in the U.S. He says the company has been able to do this by opening stores in new markets internationally.

Yet Mr. Weis says he reduced his stake in recent months because the stock had become more expensive.

“Sales have been strong, but if there was a recovery, there would be further growth,” he says.

Socking money away. The global financial crisis pounded European banks in 2008. They got pummeled again when debt woes seemed poised to torpedo the euro more recently.

That helps explain why some investors think there is still opportunity for European bank stocks to climb higher, even though the Stoxx Europe 600 Banks, an index that tracks the performance of 47 large banks, has already risen 29% over the past year.

But given the persistent and often unpredictable risks banks face—and the fact not all of them maximized the opportunity to boost their capital in recent years—this is one sector where it is particularly important to be picky. Regulatory pressure to shore up balance sheets and sell assets also poses challenges for the region’s banks.

Société Générale as

one strong bank stock. The French bank said earlier this month that second-quarter net profit more than doubled from a year prior. “I think financials are still a great opportunity, and I think they are going to be multiyear recovery stocks,” he says.

The bank’s shares have risen 68% in the past year but are trading at a lower multiple of earnings than the Stoxx Europe 600, according to FactSet.


over the past year, and it now represents 3% of the portfolio in the Threadneedle Pan European Fund she manages. The fund isn’t available to U.S. investors.

UBS restructured its investment bank last year and is increasingly focused on wealth and asset management, which she thinks improves the bank’s outlook. Shares in UBS are up 74% over the past year.

“I think there’s much more room” for the stock to rise, she says. Ms. Steele says that, even though UBS trades “like an expensive bank” today, she thinks its focus on wealth management gives it further potential for gains.

Nicholette MacDonald-Brown, a London-based fund manager who runs the Schroder ISF European Total Return fund, favors DNB, a Norwegian financial-services group. Shares are up 46% in the past year in Oslo trading. By some measures, shares are trading at a lower valuation than the Europe index.

For investors seeking broad exposure, the iShares MSCI Europe Financials

ETF holds shares of many of the region’s largest financial firms, including banks and insurers. The fund has $183 million in assets and charges 0.48% in fees. Shares are up 39% over the past year.

Hitting the road. High unemployment, austerity measures and recession also have kept many Europeans closer to home.

Fund managers who are bullish on the sector are betting livelier consumers may get out and about more often, generating business for airlines, toll-road operators and the like.

Toll-road operators in Spain, Italy and Portugal all reported drops in traffic volumes in the first half of the year, a trend highlighted in a recent note from Moody’s Investors Service. The ratings firm highlighted first-half traffic figures from Atlantia

in Italy, Brisa Concessão Rodoviária in Portugal and Società Iniziative Autostradali e Servizi as challenges for the firms.

Some fund managers say this presents a buying opportunity for those companies, because traffic is down disproportionately to declines in gross-domestic-product growth in those markets.

Atlantia is one of the biggest holdings in the Europe fund that Ms. MacDonald-Brown runs. Its shares are up 25% over the past year. The firm is “very exposed to any form of recovery,” she says.

Discount airlines such as Ryanair Holdings

and easyJet remain popular choices in the airline sector. Ms. Steele of Threadneedle says International Consolidated Airlines Group has upside following the restructuring of Iberia, one of its airline brands, and signs of a mild recovery in Spain.

“Iberia has the potential to contribute more than it has to date,” she says. Shares have more than doubled over the past year, in London trading.

Mr. Brugère-Trélat’s Franklin fund has French hotel firm Accor as

one of its top holdings. As the company increasingly licenses its hotel brands, such as Sofitel and Ibis, and lowers the proportion of properties it runs, it will see a “significant increase in the return on capital employed,” he says.

Keeping aging Europeans healthy. While many fund managers focus on which sectors will benefit if the economy keeps improving, others are finding opportunities in the continent’s aging population and its rising health-care needs.

Simon Edelsten, fund manager of the £36 million ($56 million) Artemis Global Select Fund, said European health-care stocks look like a better value than other sectors there. The fund invests globally, but about 20% of its assets are invested in European stocks. The fund isn’t distributed to U.S. investors.

“It’s the more cyclical areas that we’ve been cautious about,” Mr. Edelsten said.

Thorsten Winkelmann, manager of the €4.4 billion Allianz Europe Equity Growth fund at Allianz Global Investors, favors Novo Nordisk

. The Nordic pharmaceuticals company recently raised its earnings estimates and said it is expecting sales growth of 11% to 13% for the year. One of its strengths is in products for people with diabetes.

Novo Nordisk’s shares have risen 4% over the past year, in Danish trading. The Allianz fund isn’t available to U.S. investors.

U.K. health-care company GlaxoSmithKline,

Germany’s Bayer,

French drug company Sanofi

and Swiss pharmaceutical company Novartis

were other top picks for European equity-fund managers.

The stocks are often among the top holdings of ETFs offering sector-specific exposure globally. For example, BlackRock’s iShares and State Street Global Advisors’ SPDR ETF unit both offer funds for U.S. investors that give investors exposure to the health-care sector world-wide.

Write to Liam Pleven at

A version of this article appeared August 24, 2013, on page B7 in the U.S. edition of The Wall Street Journal, with the headline: Stock Investors Embark on a European Tour.


Sunday, August 25th, 2013 EN No Comments

Compiled by Natalie Hill


KFMR promoted Chelsea Holsopple, Dan Dolecki, Gary Holt and Stephen Scott to senior accountants; Felicia Angle and Laura Rossi to supervising seniors; and Rachael O’Leary to manager and hired Steven Ganley and Jared Clark, staff accountants.

Horovitz, Rudoy Roteman LLC hired Jean Watson, accounting and assurance services group and Amy Frizzi and Steve Kazakewicz, tax group.


Perkins Eastman promoted Kirk Anderson, Ken Kuligowski and Lee Pellegrino to associate principals; Michael Clark, senior associate; and Beth Baxendale, Brandon Dilla and Shannon Kobistek, associates.

Associations Organizations

Executive Women’s Council of Pittsburgh named officers for 2013-14.

President: Ellen M. Marcus, financial adviser, Oppenheimer Co. Inc.; president-elect: Gwendolen Pechan, director of information technology for the senior vice chancellor of health sciences and the School of Medicine at the University of Pittsburgh; secretary: Jennifer L. Cairns, executive director, Sarah Heinz House, Boys and Girls Club; treasurer: Christine Koebley, director of finance, KidsVoice.


Heyl Patterson Inc. appointed Louis L. Testoni and Brett R. Randall to its board.

Chris A. Forsha joined Civil Environmental Consultants Inc. as a corporate vice president.


Jacob Greenberg joined UBS Financial Services, as a financial advisor with Walnut Wealth Management Group.


Patrick White joined Family Hospice and Palliative Care as the full-time team physician at The Center for Compassionate Care/Canterbury, Family Hospice’s inpatient center on the campus of UPMC’s Canterbury Place.

Investment Services

Millcraft Investments hired Angelica Patterson, marketing and public relations manager, and John Paul Jones as vice president of business development.


GENCO named Thomas Nightingale president of transportation logistics.


Maverick Dental Laboratories hired Desiree Pollard as marketing manager.

Marketing, research consulting

Campos Inc. hired Nathan Route as director of business development.


Family Hospice and Palliative Care named Lynn Helbling Sirinek vice president of development and communications.

Mark Valenti, president and CEO of The Sextant Group, was named to the board at Society for College and University Planning. Mr. Valenti is serving as a guest director on the board to help SCUP manage a significant change in its governance structure.

Marshall L. Balk, Romayne L. Botti and Susan L. Boyle have joined the board of The Children’s Institute of Pittsburgh. Director Carolyn D. Duronio was appointed treasurer of the board.

Dr. Balk is an orthopedic surgeon with the Hand and UpperEx Center. Ms. Botti is the associate dean for finance and operations in the College of Engineering at Carnegie Mellon University. Ms. Boyle is a marketing and development professional specializing in business-to-business and retail advertising.

Real Estate

CBRE hired RT Walker, vice president, industrial occupier practice; Mateo Villa, associate, experienced industrial occupier practice group of Rob Blackmore and Rich Gasperini;Christopher Urban, real estate manager, Liberty Center office building management team; and Maryann Joseph, real estate services coordinator, Liberty Center office building management team.

Awards Honors

Mark J. Mendicino, senior vice president/wealth management; Sean M. Giliberti, first vice president/investments of The Mendicino/Giliberti Wealth Management Group; and Sunil Telang, vice president/wealth management, all of Janney Montgomery Scott’s Pittsburgh office, were named 2013 Five Star Wealth Managers and recognized in the July 2013 issue of Pittsburgh Magazine.

Jim Samaha, senior vice president of Comcast’s Keystone Region, was named to CableFAX The Magazine’s “Cable’s Top 100 Power Players” for 2013.

Sauereisen said J. Eric Sauereisen, president, was named Entrepreneur of the Year by Ernst Young in the Family Business category in the Western Pennsylvania/West Virginia region.

Ann Dugan, founder and executive director of the Institute for Entrepreneurial Excellence, Joseph M. Katz Graduate School of Business, Pitt, is the recipient of the 2013 Barbara Hollander Award from the Family Firm Institute Inc.

The award, created in 1995 to honor the late founder and past president of the FFI to perpetuate her profound interest in family business and her love of education and learning, represents the pinnacle of achievement in the field. Ms. Dugan, also assistant dean in the Katz business school, was selected for the award on the basis of contributions to civic, charitable, educational or other nonprofits that support human betterment and social change.

Wendy Dodd Maletta was awarded the 2013 Avatar Award for New Coach of the Year by the International Coach Federation Midwest Regional Advisory Committee. She was honored for her outstanding achievements as a professional coach who has been trained and accredited for 2 years or less. Ms. Maletta is an ICF-accredited marketing and professional image coach with more than 25 years of professional experience and is owner of Ahhluminating Marketing and Professional Image Coaching.

Cindy Datig, chief executive officer of Dollar Energy Fund, was presented with the NLIEC Achievement Award by the National Low Income Energy Consortium at the 2013 National Energy and Utility Affordability Conference. The award, presented annually, recognizes an individual or organization who has demonstrated consistent leadership in championing low-income energy issues.

The following members of Schneider Downs Wealth Management Advisors LP have received the honorable Five Star Award from Five Star Professional in recognition of outstanding client service. They are Don A. Linzer, chief executive officer of Schneider Downs Wealth Management Advisors LP and Schneider Downs Corporate Finance LP; Nancy Skeans, partner and managing director of Schneider Downs Wealth Management Advisors; Michael Bucci, senior financial Analyst with Schneider Downs Wealth Management Advisors; and Beth Lynch, investment relationship manager with Schneider Downs Wealth Management Advisors.


Sunday, August 25th, 2013 EN No Comments

Noah Holdings Limited Announces Unaudited Financial Results for the Second … – PR

Noah Holdings Limited (“Noah” or the “Company”) (NYSE: NOAH), a leading wealth management service provider focusing on distributing wealth management products to the high net worth population in China, today announced its unaudited financial results for the second quarter of 2013 and appointed new Chief Financial Officer.


  • N
    et revenue
    s in the second quarter of 2013 were US$44.3 million, a 132.1% increase from the corresponding period in 2012.
  • Income from operations in the second quarter of 2013 was US$18.4 million, a 156.3% increase from the corresponding period in 2012.
  • Net income attributable to Noah shareholders in the second quarter of 2013 was US$14.4 million, a 133.1% increase from the corresponding period in 2012. Non-GAAP


    net income attributable to Noah shareholders in the second quarter of 2013 was US$16.1 million, a 128.5% increase from the corresponding period in 2012.
  • Net income per basic and diluted ADS in the second quarter of 2013 were both US$0.26. Non-GAAP net income per diluted ADS in the second quarter of 2013 was US$0.29.


  • Total number of registered clients as of June 30, 2013 increased by 35.1% year-over-year to 45,839; this figure includes 43,966 registered individual clients, 1,756 registered enterprise clients and 117 wholesale clients that have entered into cooperation agreements with the Company.
  • Active clients


    during the second quarter of 2013 were 2,602, a 76.4% increase from the corresponding period in 2012. The aggregate value of wealth management products distributed by the Company during the second quarter of 2013 was RMB12.4 billion (approximately US$2.0 billion)[3], a 101.9% increase from the corresponding period in 2012. Of this aggregate value, fixed income products accounted for 85.6%, private equity fund products accounted for 9.1%, and other products, including mutual fund products, private securities investment funds and investment-linked insurance products, accounted for 5.3%.
    The average transaction value per client

    in the second quarter of 2013 was RMB4.8 million (approximately US$0.8 million), a 14.4% increase from the corresponding period in 2012, primarily due to an increase in transaction value from enterprise clients as a percentage of aggregate transaction value as their investment amounts tend to be higher than individual clients.
  • C
    overage network as of June 30, 2013 included 56 branches, the same as March 31, 2013 and down from 60 branches as of June 30, 2012. The number of relationship managers was 525 as of June 30, 2013, up from 452 as of March 31, 2013 and down from 550 as of June 30, 2012. The increase in relationship managers is primarily due to the Company’s strategy to reposition certain branch managers, previously in sales support role, to assume direct client facing responsibilities, and thus reclassified as relationship managers.


The Company appointed Dr. Theresa Teng as its Chief Financial Officer replacing Mr. Tao Thomas Wu, effective August 21, 2013. Mr. Wu will continue his service for the Company and will help the Company explore new business initiatives.  Dr. Teng has more than 15-year investment and finance management experience.  Prior to joining the Company, she served as the Chief Financial Officer of PPS.TV, one of the leading internet TV players in China, the head of finance of Semiconductor Manufacturing International Corp. (NYSE:SMI, HKSE:0981), and the director of D.B. Zwirn Co., a New York based alternative investment fund.  In addition, Dr. Teng taught Finance at Ming Chuan University in Taiwan for seven years.

Ms. Jingbo Wang, Co-founder, Chairwoman of the Board of Directors and Chief Executive Officer, commented, “We are pleased to welcome Dr. Teng to our senior management team. We look forward to drawing upon Dr. Teng’s extensive experience as our business continues to grow.”

“We thank Mr. Wu for his leadership and dedication for his tenure as Chief Financial Officer.  Since joining us in March 2010, Mr. Wu has made significant contributions to Noah both in risk management and financial control,” Ms. Wang continued. “Mr. Wu will continue to work with us and explore new business initiatives for Noah. Despite of the change in management, our business strategy remains unchanged.”

Ms. Wang commented. “I am pleased that our second quarter results exceeded our expectations, and we have updated our 2013 full year forecast accordingly. We believe that the significant growth in our business was driven by overall structural improvements, including enhancement in product development, client servicing and operating capabilities. These improvements will continue to drive future growth.”


Net Revenues

Net revenues for the second quarter of 2013 were US$44.3 million, a 132.1% increase from the corresponding period in 2012, due to increases in both one-time commission revenues and recurring service fees for the second quarter of 2013.

Net revenues f
rom one-time commissions for the second quarter of 2013 were US$22.8 million, a 122.8% increase from the corresponding period in 2012. The year-over-year increase for the second quarter of 2013 was mainly due to an increase in transaction value and, to a lesser extent, an increase in average commission rate.

Net revenues f
rom recurring service fees for the second quarter of 2013 were US$20.3 million, a 133.6% increase from the corresponding period in 2012. The year-over-year increase was mainly due to the cumulative effect of private equity funds previously distributed by the Company and an increase in assets under management by the Company since the second half of 2012.

Operating Margin

Operating margin for the second quarter of 2013 was 41.6%, as compared to 37.7% for the corresponding period in 2012. The year-over-year increase for the second quarter of 2013 was driven by growth of net revenues exceeding those in operating cost and expenses.

cost and
expenses for the second quarter of 2013, including cost of revenues, selling expenses, GA expenses and other operating income, were US$25.9 million, a 117.4% increase from the corresponding period in 2012.

Cost of revenues for the second quarter of 2013 totaled US$9.2 million, a 118.6% increase from the corresponding period in 2012. The year-over-year increase for the second quarter of 2013 was primarily due to an increase in compensation paid to relationship managers as a result of the increase in transaction value, and incremental costs from aforementioned repositioning of certain branch managers, whose compensations in their client facing roles are now accounted for in cost of revenues, instead of selling expenses.

Selling expenses for the second quarter of 2013 were US$8.9 million, a 40.1% increase from the corresponding period in 2012. Selling expenses as a percentage of net revenues for the second quarter of 2013 was 20.1%, as compared to 33.3% for the corresponding period in 2012. The year-over-year increases for the second quarter of 2013 was primarily due to increases in employee compensations, share-based compensations and client service fees as the Company strengthened its selling and marketing functions.

GA expenses for the second quarter of 2013 were US$8.9 million, a 112.1% increase from the corresponding period in 2012. GA expenses as a percentage of net revenues for the second quarter of 2013 was 20.2%, as compared to 22.1% for the corresponding period in 2012. The year-over-year increases for the second quarter of 2013 was primarily due to increases in personnel expenses, professional consulting fees and rental expenses.

Other operating income for the second quarter of 2013 was US$1.2 million, as compared to US$2.9 million for the corresponding period in 2012. Other operating income is government subsidies received in the PRC from local governments for general corporate purposes.

Income Tax Expenses

Income tax expense
for the second quarter of 2013 were US$5.4 million, a 139.6% increase from the corresponding period in 2012. The year-over-year increase for the second quarter of 2013 was due to an increase in taxable income.  

Net Income

Net income for the second quarter of 2013 was US$14.7 million, a 137.7% increase from the corresponding period in 2012. Net margin for the second quarter of 2013 was 33.3%, as compared to 32.5% for the corresponding period in 2012.

Non-GAAP net income for the second quarter of 2013 was US$16.4 million, a 132.6% increase from the corresponding period in 2012. Non-GAAP net margin for the second quarter of 2013 was 37.1%, as compared to 37.0% for the corresponding period in 2012.

et income attributable to
Noah s
hareholders for the second quarter of 2013 was US$14.4 million, a 133.1% increase from the corresponding period in 2012. Net income per basic and diluted ADS for the second quarter of 2013 were both US$0.26, as compared to US$0.11 for the corresponding period in 2012.

Non-GAAP net income attributable to Noah shareholders for the second quarter of 2013 was US$16.1 million, a 128.5% increase from the corresponding period in 2012. Non-GAAP net income per diluted ADS for the second quarter of 2013 was US$0.29, as compared to US$0.12 for the corresponding period in 2012.

Balance Sheet and Cash Flow

As of June 30, 2013, the Company had US$165.3 million in cash and cash equivalents, an increase of US$44.5 million from US$120.8 million as of March 31, 2013. In the second quarter of 2013, the Company generated US$28.9 million in its operating activities, received a net US$21.2 million from investing activities, mostly from maturing of fixed income products previously invested,  and used US$7.7 million for dividend distribution.     

On May 22, 2013, the Company’s Board of Directors authorized a new share repurchase program of up to US$30 million worth of its issued and outstanding ADSs over the course of one year. As of June 30, 2013, the Company has repurchased 30,821 ADSs for approximately US$0.3 million, inclusive of transaction charges, which has not been settled as of June 30, 2013.


The Company estimates that non-GAAP net income attributable to Noah shareholders for the full year 2013 is expected to be in a range of US$50.0 million and US$55.0 million, representing a year-over-year increase in the range of 86.4% and 105.0%. This estimate reflects management’s current assessment and is subject to change.


Senior management will host a conference call on Wednesday, August 21, 2013 at 8:00 pm (Eastern) / 5:00 pm (Pacific) / 8:00 am (Hong Kong, Thursday, August 22, 2013) to discuss its second quarter 2013 unaudited financial results and recent business activity. The conference call may be accessed by calling the following numbers:

A telephone replay will be available shortly after the call until August 28, 2013 at +1-646-254-3697 (US Local Toll) or +61-2-8199-0299 (International). Conference ID # 25724395.

A live webcast of the conference call and replay will be available in the investor relations section of the Company’s website at .


In addition to disclosing financial results prepared in accordance with U.S. GAAP, the Company’s earnings release contains non-GAAP financial measures that exclude the effects of all forms of share-based compensation. The reconciliation of these non-GAAP financial measures to the nearest GAAP measures is set forth in the table captioned “Reconciliation of GAAP to Non-GAAP Results” below.

The non-GAAP financial measures disclosed by the Company should not be considered a substitute for financial measures prepared in accordance with U.S. GAAP. The financial results reported in accordance with U.S. GAAP and reconciliation of GAAP to non-GAAP results should be carefully evaluated. The non-GAAP financial measure used by the Company may be prepared differently from and, therefore, may not be comparable to similarly titled measures used by other companies.

When evaluating the Company’s operating performance in the periods presented, management reviewed non-GAAP net income results reflecting adjustments to exclude the impacts of share-based compensation to supplement U.S. GAAP financial data. As such, the Company believes that the presentation of the non-GAAP net income, non-GAAP income per diluted ADS and non-GAAP net margin provides important supplemental information to investors regarding financial and business trends relating to the Company’s financial condition and results of operations in a manner consistent with that used by management. Pursuant to U.S. GAAP, the Company recognized significant amounts of expenses for the restricted shares and share options in the periods presented. To make financial results comparable period by period, the Company utilized the non-GAAP financial results to better understand its historical business operations.


Noah Holdings Limited is a leading wealth management service provider focusing on distributing wealth management products to the high net worth population in China. Noah distributes wealth management products, including primarily fixed income products, private equity funds, private securities investment funds and mutual funds. Noah is also equipped with asset management services capability, managing its own fund of funds and real estate fund products. With over 500 relationship managers in 56 branch offices as of June 30, 2013, Noah’s total coverage network encompasses China’s most economically developed regions where the high net worth population is concentrated. Through this extensive coverage network, product sophistication, and client knowledge, the Company caters to the wealth management needs of China’s high net worth population. For more information please visit the Company’s website at .


This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Among other things, the outlook for the full year 2013 and quotations from management in this announcement, as well as Noah’s strategic and operational plans, contain forward-looking statements. Noah may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Noah’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: its goals and strategies; its future business development, financial condition and results of operations; the expected growth of the wealth management market in China and internationally; its expectations regarding demand for and market acceptance of the products it distributes; its expectations regarding keeping and strengthening its relationships with key clients; relevant government policies and regulations relating to its industry; its ability to attract and retain quality employees; its ability to stay abreast of market trends and technological advances; its plans to invest in research and development to enhance its product choices and service offerings; competition in its industry in China and internationally; general economic and business conditions in China; and its ability to effectively protect its intellectual property rights and not infringe on the intellectual property rights of others. Further information regarding these and other risks is included in Noah’s filings with the Securities and Exchange Commission, including its annual report on Form 20-F. Noah does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law. All information provided in this press release and in the attachments is as of the date of this press release, and Noah undertakes no duty to update such information, except as required under applicable law.


Holdings Limited
Shang Chuang, Director of IR
Tel: +86 21 3860 2388
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SOURCE Noah Holdings Limited


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Go for the Goal



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