24 OctArrow Financial Corp. posts solid third quarter

GLENS FALLS — Arrow Financial Corp. saw its bottom line rise 9.3 percent, or $524,000, to $6.15 million in the third quarter, according to a report filed Monday with the Securities and Exchange Commission.

Arrow Financial, with headquarters in Glens Falls, is the holding company of Glens Falls National Bank amp; Trust Co., Saratoga National Bank and Trust Co. and several other area financial services and insurance firms.

The company’s diluted earnings per share for the three months that ended Sept. 30 rose 8.9 percent to 49 cents, from 45 cents in the year-ago third quarter.

Net income was $6.1 million for the quarter, up approximately 9 percent from about $5.6 million in the year-ago third quarter.

“Arrow delivered another quarter of solid performance, with increased net income, earnings per share and net interest margin,” said President and CEO Thomas Murphy, in a prepared statement. “We posted record highs for total loans outstanding and total stockholders’ equity. In addition, our income from our trust division and commission income from insurance agency operations continues to grow, and we maintained excellent asset quality and strong capital ratios.”

Third-quarter net interest income rose $1.2 million, or 8.7 percent, from the same quarter of 2013, and third-quarter loan balances increased by $115 million, or 9.1 percent, from 2013 levels.

Arrow’s residential real estate loan portfolio grew by $56.2 million, or 12.2 percent, during the first nine months of 2014, according to the report.

“We originated approximately $98 million of residential real estate loans, an increase of 1.3 percent from approximately $97 million of residential real estate loans originated in the comparable period for 2013,” stated the company’s report. “We also experienced growth from our indirect automobile lending program. We have advanced $166 million in new and used automobile loans in the first nine months of 2014, increasing our outstanding balances by $25.3 million, or 6.4 percent (for the nine-month period).”

Arrow distributed a cash dividend of 24.5 cents per share in the third quarter, a 2 percent increase from the cash dividend paid in the third quarter of 2013, adjusting both for a 2 percent stock dividend issued in September.

Insurance commission income rose slightly, from $2.4 million for the third quarter of 2013 to $2.5 million for the third quarter of 2014.

To view the company’s complete financial report, visit arrowfinancial.com, and click on “News/Financial.”

24 OctNew US rules on banks, borrowers eased to spark wider home lending

With the financial crisis and subprime mortgage bust receding further into history, the government is loosening some financial rules, hoping to inject more life into the countrys still-recovering housing market.

Both banks and borrowers stand to benefit from the new rules unveiled Tuesday by six federal agencies. While banks will see relaxed guidelines for packaging and selling mortgage securities, fewer borrowers likely will need to make hefty down payments. The board of the Federal Deposit Insurance Corp. voted 4-1 Tuesday to adopt the new rules, and two other agencies approved them as well. The Federal Reserve has scheduled a vote for Wednesday, and two other agencies are expected to adopt the rules soon.

The regulators have dropped a key requirement: a 20-percent down payment from the borrower if a bank didnt hold at least 5 percent of the mortgage securities tied to those loans on its books. The long-delayed final rules include the less stringent condition that borrowers not carry excessive debt relative to their income.

The rules for the multitrillion-dollar market for mortgage securities will take effect in a year. For other kinds of securities such as those bundling together auto loans or commercial loans, which dont allow banks an exemption from the 5-percent rule, the effective date is in two years.

The rules, first proposed in 2011, were mandated by the overhaul law enacted in the wake of the 2008 financial crisis. The idea was to limit the kind of risky lending that brought on the crisis. If banks have more of their own money invested in mortgage securities — so-called skin in the game — they wont be as likely to take excessive risks, the thinking goes.

Some critics warned that abandoning the 20-percent down payment condition could bring a return to the dangerous days of borrowers taking on heavy mortgage loans that they arent in a position to repay.

After three years of interagency haggling, the regulators final, compromise approach was to adopt the Consumer Financial Protection Bureaus definition of a qualified mortgage. It excludes the kind of risky practices that fueled the crisis, such as mortgages issued without any supporting documents from borrowers.

CFPB Director Richard Cordray, a member of the FDIC board, noted at Tuesdays meeting that conditions in the mortgage market have changed since the financial crisis, when anxiety over reckless lending gripped lawmakers.

Credit has dried up for a long period and (lending) standards have tightened dramatically, he said.

Experts say its hard to predict whether the regulators move will actually boost mortgage lending and the housing market. Anthony Sanders, a real estate finance professor at George Mason University, also suggested that it could re-open the door to risky lending.

The problem facing the housing and mortgage markets is too few borrowers with sufficient income to pass debt-to-income rules, Sanders said. Lowering the down payment requirement misses the point. So now we are putting poorer households in low-down payment loans — again?

Through the years since Congress called for a sweeping revamp of regulation for banking, derivatives trading, securities and more, regulators have slogged through scores of complex rules.

The decision of the regulators to drop the 20 percent down payment requirement for banks to escape skin in the game for mortgage securities was a big win for finance industry lobbyists and advocates for affordable housing, noted Cornelius Hurley, a former counsel to the Federal Reserve who heads Boston Universitys Center for Finance, Law and Policy.

The regulators work on the rules attracted the essence of the housing industrial complex, Hurley said. They all came out of the woodwork.

Industry groups talked up the potential impact on lending.

The new rules will give the financial services industry more confidence and certainty, enabling lenders to provide high-quality mortgage loans to creditworthy consumers, the Financial Services Roundtable, whose members include the largest banks, said in a statement.

Ahead of the crisis, banks packaged and sold to investors bundles of risky mortgages with teaser rates that ballooned after only a few years. The banks had very little of their own money invested. Many borrowers ended up defaulting on the loans when the interest rates spiked. As a result, the value of the mortgage securities plummeted, and banks and investors holding them lost billions. The debacle helped ignite the financial meltdown that plunged the economy into the deepest recession since the 1930s and brought a taxpayer bailout of banks.

The new rules will affect only a relatively small portion of the mortgage securities market, regulators say. Loans backed by Fannie Mae, Freddie Mac and the Federal Housing Administration arent subject to the 5-percent rule. The two companies and the federal agency together stand behind about 90 percent of new mortgages, and own or back more than $5 trillion worth of home loans.

On Monday, the head of the agency overseeing government-controlled Fannie and Freddie announced that the companies have reached an agreement with major banks that could expand mortgage lending. The deal clarifies conditions in which banks could be required to buy back mortgages they sell to Fannie and Freddie for misrepresenting the loans risks.

23 OctNational Bank of Greece (ADR) (NYSE:NBG) selloff.

National Bank of Greece (ADR) (NYSE:NBG) fell down as the benchmark stock index in Athens fell over 10% before recovering a little to close down 6.25% on Wednesday. Shares of Greek banks were among the hardest hit, with the National Bank of Greece (NYSE:NBG) falling as much as 13% at one point.

The selloff came after Fitch said Greek banks remain fragile despite improving their balance sheets and showing progress on restructuring plans.

National Bank of Greece Equity Analysis

National Bank of Greece (ADR) (NYSE:NBG) opened trading today as $2.36 and is trading in the range of 2.08-2.40 today. National Bank of Greeces current market cap stands at $7.67 billion.

Compared to other peers in the Banking sector, NBG has outperformed in terms of quarterly revenue growth year over year at -0.41 vs. the industry average of 0.12. National Bank of Greece s earnings per share is currently at .80, which is below the sector average of 1.16.

Corporate Profile

National Bank of Greece (ADR) (NYSE:NBG) together with its subsidiaries, offers diversified financial services primarily in Greece. The company is involved in retail and commercial banking, investment management, investment banking, insurance, investment activities, and securities trading activities. It offers demand deposits, savings deposits, and time deposits, and current accounts; investment products; consumer loans, personal loans, mortgage loans, automobile loans, overdraft facilities, and foreign currency loans, as well as letters of credit and guarantees; credit cards; currency swaps and options; and ATMs. The company also provides financial and investment advisory services, foreign exchange, custody services, and trade finance services; and shipping finance, project finance, leasing, factoring, treasury, private banking, private equity, and brokerage services, as well as asset management, including mutual funds and closed end funds.

23 OctAnthony Orlando: Economic recovery hasn’t reached most Americans

Nor have most Americans benefitted much from the booming stock market, since 80 percent of it is owned by the richest 10 percent.

Nor have they benefitted from the Big Government that Republicans are always complaining about, since the federal spending is actually lower than what the Republicans were proposing a couple years ago during the deficit crisis.

Nor have they benefitted from the housing recovery, since almost all the growth seems to be coming from the most expensive 1 percent of houses. Meanwhile, home sales in the other 99 percent of houses have actually been going down this year

Nor have they benefitted from private charity, according to a new study by The Chronicle of Philanthropy, which found that the rich have been reducing the share of their income they give to charity from 2006 to 2012. Meanwhile, the poor and middle class actually have been giving an increasing share of their incomes to charity!

So its no surprise the middle class is poorer today than it was in 1989. Back then, the average American household had the inflation-adjusted equivalent of $85,000 in wealth. Today, they have $81,000.

Nor is it a surprise that a recent study by the political scientists Martin Giles and Benjamin Page found that, over the course of 1,779 polls of the American public from 1981 to 2002, Congress almost never passed a law that 90 percent of Americans supported if the richest 10 percent opposed it. But when the richest 10 percent wanted a law passed and the other 90 percent opposed it, the law had a significant chance of success.

Nor is it a surprise that we are repeating the exact same mistakes that caused the recession in the first place.

Predatory subprime lending may have disappeared in the housing market (for now), but its booming in student loans and automobile loans, where stories proliferate of borrowers tricked into contracts they cant afford.

So you want to know where the next recession will come from? The same place as the last one, just in a different disguise: the rich, savvy few preying on the invisible masses, who never really escaped the last recession, which is why this house of cards cannot stand for long.

For a recovery to last, it must be experienced by all Americans. So far, thats simply not happening.

Anthony W. Orlando lives in South Florida, and is a lecturer in the College of Business and Economics at California State University, Los Angeles; and a Public Policy Research Fellow at the University of Southern California.

23 OctTuesday Afternoon Business Brief


Stocks appear on track for more gains today. The market is getting a boost from an encouraging report on China#39;s economic growth as well as strong quarterly results from Apple and several other big companies. The Dow had gained more than 1 percent by early afternoon, up close to 200 points. The broader indexes are seeing even stronger gains, with the Samp;P 500 up more than 30 and the Nasdaq up about 90.

  • Federal regulators are relaxing the rules banks must follow in packaging and selling mortgage securities. The aim is to get banks to take on more of the risk and spur broader home lending. Regulators are also requiring fewer borrowers to make hefty down payments.
  • A top New York financial regulator is accusing the nation#39;s largest servicer of subprime mortgages of abuses that could potentially harm hundreds of thousands of borrowers. New York#39;s Superintendent of Financial Services has issued a letter to Ocwen Financial Corp., documenting the same kinds of suspicious actions that worsened the housing crisis, including backdating foreclosure warnings and loan denials, making it nearly impossible for borrowers to appeal the company#39;s decisions.
  • Federal officials are pledging regulatory attention and financial help to rural towns hit hard by the subprime mortgage crisis. Government data provided to The Associated Press by researchers at the US Department of Agriculture and Middlebury College show subprime loans were distributed in the rural US at even higher rates on average than in the Sun Belt cities devastated by risky lending.
  • The final report on state unemployment before next month#39;s elections shows jobless rates dropped in 31 US states last month. Two states with hard-fought Senate campaigns, Colorado and Kentucky, experienced the biggest declines in unemployment. Colorado#39;s fell to 4.7 percent, and Kentucky#39;s rate dropped to 6.7 percent. Nationwide, the unemployment rate eased to 5.9 percent in September.

23 OctConsumer loans rise

The growth in consumer loans remains manageable, Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo said Wednesday.

Right now, we dont see any risks on consumer loans in terms of consumer loans together with credit card receivables and auto loans. To sum it up and relate that to the total portfolio of the banking system, it still is a very small amount, Guinigundo said.

Latest data showed consumer loans grew 9.3 percent to P803.257 billion in the second quarter from P735.1 billion in the first quarter.

Automobile loans expanded to P206.783 billion from P194.373 billion, while credit card receivables climbed to P157.222 billion from P153.396 billion.

Residential real estate loans grew 6.5 percent to P348.16 billion in the second quarter from P326.9 billion in the first quarter.

Total loan portfolio of the banking sector as of end-June grew by 4 percent to P4.878 trillion from P4.698 trillion in end-March.

23 OctSales of U.S. Existing Homes Rise to One-Year High

The increase in sales exceeded the median forecast of 77 economists surveyed by Bloomberg, which projected a gain to a 5.1 million annual rate. Estimates ranged from 4.95 million to 5.2 million.

Sustained Improvement

“Job creation is good, we have low rates and more inventory is coming online,” Lawrence Yun, NAR chief economist, told reporters as the figures were released. The market “one year from now, two years from now, it will be better.”

At the current pace, employment would increase by 2.7 million this year, marking the biggest advance since 1999. The jobless rate dropped to a six-year low of 5.9 percent last month, according to figures from the Labor Department.

Declining borrowing costs will help bring homes within reach of more Americans. The average 30-year, fixed-rate mortgage fell to 3.97 percent in the week ended Oct. 16, the lowest since June 2013, according to Freddie Mac data. The rate has dropped by 0.22 percentage point over the past two weeks as concern over slowing global growth pushed investors out of stocks and into the safety of Treasury securities, causing yields to drop on the benchmarks used to calculate home-lending costs.

Photographer: Daniel Acker/Bloomberg

22 OctRogers appoints president, Enterprise Business Unit

Guy Laurence, Rogers President and Chief Executive Officer has announced the appointment of Nitin Kawale to president, Enterprise Business Unit, effective 1 December. In this role, Kawale will be responsible for the delivery of the companys Enterprise business strategy and commercial plan covering Small and Medium Business, Enterprise and Public Sector customers.

Kawale joins Rogers from Cisco Systems Canada where he held the position of president since 2008 with responsibility for all aspects of the Canadian operation including sales, marketing, finance, distribution and services. He has been with Cisco since 1995 serving a variety of domestic and international roles including: Worldwide Strategy and Worldwide Mobility as well as Cisco Canada executive roles in Enterprise, Small and Medium Business, and Public Sector businesses.

22 OctBusiness Briefs: Oct. 21

Snyder, of Anderson, received an Outstanding Achievement Award for his work to fostering diversity at the college. Snyder hired the college’s first vice president for diversity, equity and inclusion and commissioned a study that resulted in a proposal to create a statewide diversity program. The college has a minority student enrollment of over 25,000 students.

The college has also increased the level of Minority Business Enterprise and Woman-Owned Business Enterprise purchases by 93 percent since 2007.

Ivy Tech is one of Indiana’s largest and fastest growing colleges and serving more than 200,000 students at 32 campuses and 100 learning centers.

To see your good news, special recognition or other business news here, contact Traci Moyer at traci.moyer@heraldbulletin.com or call 648-4250.

22 OctSaline Area Chamber of Commerce honors top businesses in annual enterprise …

SALINE–The best of the best business in the Saline area were recently honored during a ceremony held by the Saline Area Chamber of Commerce.

The 19th annual Business Enterprise Awards took place Thursday, Oct. 16 at the Stonebridge Golf Club in Ann Arbor.

The ceremony featured the presentation of the Lifetime Achievement Award, 2014 Small Business of the Year and 2014 Large Business of the Year. Government officials were on hand to give tributes to each award winner. Officials included Congressman Tim Walberg, State Rep. Gretchen Driskell and Saline Mayor Brian Marl.

Lifetime Achievement Award

The Robison-Bahnmiller Funeral Home received the award in recognition of the businesss long history of outstanding contributions to the Saline community.

This is a big deal to us and we are very grateful for the honor, said Alison Robison, wife of owner Jim Robison.

Alison Robison spoke about the evolution of the funeral home, which the couple purchased from the Bahnmillers in 1984.

In 1982, just four months after the birth of their daughter, they moved from Ann Arbor to the apartment above the funeral home. At the request of Gerald and Mildred Bahnmiller they moved to Saline to become the next owners of the business.

Once again, I found I had a limited and fairy tale understanding of what I had signed on for and what we had committed to doing, she said.

She recalled stories of raising two children above the funeral home and working to live up to the reputation of the Bahnmillers and Lockwood families. Continued…

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