PDIC sells Davao bank’s properties

Philippine Deposit Insurance Corp. said Tuesday it successfully sold several properties of closed All Asia Bank Corp. in Davao City for P55.6 million.

The state-run deposit insurer said 61 properties were sold outright during the bidding on Aug. 1 while three properties were sold via negotiated sale.

PDIC is trying to sell 71 corporate real properties and 59 real properties of the closed bank with minimum disposal price of P243.9 million.

The agency said it was planning to conduct other public biddings before the end of the year.

Meanwhile, PDIC said it would start servicing the deposit insurance claims of depositors of the closed Banco Batangan, a rural bank  based in Batangas.

The Bangko Sentral’s Monetary Board placed Banco Batangan under the receivership of PDIC on June 21.  The two-branch bank had 2,411 depositors with total claims of P114 million as of end-2011.

PDIC said depositors with aggregate account balances of P10,000 and below were not required to file their deposit insurance claims with the agency, provided their addresses in the bank’s records were complete and updated and had no outstanding obligations with the closed bank.

Depositors with account balances above P10,000 are required to file their claims on their respective appointment dates.

PDIC said it would conduct the onsite claims settlement operations on Aug. 14 to 21.  Claims will be processed at the PDIC office in Makati City while payment of insured deposits will be sent through mail.

Depositors who were not able to file their claims during the claims settlement period may submit their claims personally at the PDIC office at the 4th floor of SSS Building on Ayala Avenue corner Rufino Street in Makati starting Sept. 3.

PDIC said when filing deposit insurance claims, depositors should present the duly accomplished claim form and claim status sheet, original and photocopy of evidence of deposit, and original and photocopy of two valid photo-bearing IDs with signature of the depositor.

Bennett College Interim President: School Will Be Community Focused


Greensboro, NC — Bennett College was founded on service and community engagement but some alumni believe somewhere along the way new students and some alumni have lost sight of that.

Dr. Esther Terry, the schools interim president, has told the group, she wants to bring the school back to its roots.

News2 spoke with some alumni Sunday who told us they are anxious to see the change and ready to help.

Dr. Terry, along with dozens of alumni held what they call The Long Walk Sunday on the college campus to affirm the promise and rededicate themselves to their alma mater.

Dressed in all white, the group accompanied Dr. Terry from her house to the schools chapel for the service.

This day is so overwhelming; it is so heart fulfilling to see all of us back here, all of us supporting our college, said Dr. Lisa Johnson, an alumna of the school.

The Long Walk is about 500 steps from the presidents home to the chapel. Traditionally, the president is accompanied by at least 500 alumnae as part of the ceremony.

Wanda Mobley, the schools spokesperson, says the walk is symbolic of the schools entrance into a new phase inits 139-year history.

We want to be more of a community presence, we want the community to know Bennett is here for them as they have been here for us over the last 139 years, she said. We want to be, you know, join some clubs and organizations and we want those clubs and organizations to partner with us and come on our campus.

Greensboro Mayor Robbie Perkins and Councilwoman Yvonne Johnson were at the education service.

The school reports the alumni association contributed $900,000 in just the past academic year to support efforts at the college.

Alums have that foundation of being engaged and a part of the community and making change occur, and I think its important because the students need to continue that legacy, said Dr. Karen Martin-Jones, an alumna.

Dr. Esther Terry is the first alumni to lead Bennett College. She was named interim president after Dr. Julianne Malveux resigned in May of this year.

WFMY News 2

Property Business in Philippines Also for Young, Not-So-Rich

Manila (Philippine Daily Inquirer/ANN) (Source: Michelle V. Remo Asia News Network (MCT) With interest rates at historic lows and supply being abundant, the time is ripe for investing in real properties in the Philippines.

Contrary to common notion that it is fit only for big enterprises and the extremely rich, the property business is also something the young professionals and the not-so-rich can engage in.

While an individual is young, that is the best time to start building one’s property portfolio, Carl Dy, Property sales coach and Ayala Land Premier sales director, told SundayBiz.

Ayala Land Premier is the developer of the group’s most expensive projects.

At 34, Carl already has several properties in his portfolio from which he earns extra income, mostly from rent.

The property sector in the Philippines has continually grown over the past three years as evidenced by the growing number of condominium buildings among other real assets.

Because Asia is seen to continue driving global economic growth in the years to come, emerging markets in the region like the Philippines are expected to be keeping a robust growth as well.

Carl says that at a time of economic boom, the property sector is one of those that benefit the most. As incomes rise, he says, demand for properties grows as well.

Given this backdrop, he says, business-minded individuals should easily see the income opportunity over the medium to long term from investing in real properties.

Stars are aligned right now. Because of the economic boom in Asia, the benefits are trickling down to the Philippines. Almost all sectors are enjoying good business, and the property sector is not exempted, Carl says.

Carl, who grew up in Binondo in Manila seeing his parents run a hardware, says even a young professional like himself can engage in the property business. The business is actually much easier than other types, he opines, as it requires less management effort compared to, say, running a restaurant.

Medium to long-term return

However, Carl says, running a property business requires patience as far as generating income is concerned. Unlike other businesses that could generate profits within the short term, the property business is meant for those who have the patience to wait over the medium to long term to generate significant income.

For instance, one way to earn from the property business is to buy a piece of land, let its value appreciate over the years, and then sell it. He says the increase in the price of land can be significant over the years. Such a strategy does not entail too much management effort, but requires the skill of waiting, he says.

Another way to earn from the property business is to buy an asset -be it a house and lot, a townhouse, or a condominium -and have it rented.

A young, self-supporting professional may not be able to buy a property in cash, and so what he can do is pay for the property in installment basis.

He may not earn significant income in the initial years, Carl says, especially since monthly amortization is still being paid. The income generated from rental of the property will mostly be used to pay for the amortisation, he adds.

But once the years of amortisation are over, Carl says, the owner may fully enjoy passive income from his property, the value of which will have already increased significantly over the years.

Consumer be Wary Series: Searching for New Homes Online Fraught with …

San Diego, CA, August 05, 2012 –(PR.com)– Mountain Trust Realty, Inc. (www.MountainTrustRealty.com) and Mountain Trust Mortgage, Inc. (www.MountainTrustMortgage.com) have embarked upon a consumer awareness campaign to ensure that prospective home buyers and home sellers know that while there are many avenues for researching real properties available for sale, the most timely and reliable information can only come direct from a qualified real estate professional.

Increasing numbers of consumers have been turning to websites on the internet to research potential properties available for sale to see if they can eliminate the need to contact a real estate professional to help them to find a new home, or alternately, to first screen properties to then contact real estate professionals to assist with viewing them. Unfortunately for many consumers, knowledgeable Realtors know that many properties listed this way have frequently already been sold.

Many consumers are unaware that professional real estate agents pay dues to subscribe to an exclusive internal online multiple listing service (MLS) that is only available to member professionals, and which lists all current properties actually available for sale.

Sarah Smith, a professional Realtor who has run into the issue with a number of past clients notes: In order to make the best home purchasing decisions, timeliness and accuracy with regard to data is key. Many services on the internet today are a great way for consumers to conduct a preliminary survey of general market conditions. But when one is ready to move forward with a home sale or purchase, its important to contact a qualified real estate professional to find the best choices actually still available.

Gary Cooper, President of Mountain Trust Realty and Mountain Trust Mortgage, a recognized real estate industry consumer advocate, agrees: These other online services may be getting their info from the real estate industrys own internal database, but unfortunately, their databases are not regulated by any state or federal agency for maintaining accuracy. The listing service we use is highly regulated. That means that it is current, up-to-date, complete, and covers all listings available, from active listings, to homes in escrow, to homes that have been sold. This highly accurate data can further present a much more accurate picture of the overall market and home values in very specific locations. All members of this service Must follow strict guidelines in inputting amp; updating or face losing membership.

Smith and Cooper both note that while this database technology can be a great enabler, at the end of the day, when one is ready to commit to becoming a truly serious buyer, its best to hire an experienced, knowledgeable professional to get a thoroughly accurate take on the market.

Unfortunately, Cooper observes, like most everything in life, if you expect to do otherwise and get something for nothing…you often wind up getting exactly what you paid for.

About the Companies
Mountain Trust Realty and Mortgage Trust Mortgage are a full service lender and a real estate company uniquely positioned to provide clients with one-stop real estate shopping services conveniently located under one roof. Mountain Trust Mortgage has consistently been awarded an A+ rating by the Better Business Bureau since we first registered with them nearly ten years ago. Our highly seasoned, vetted team of brokers and agents are specifically trained to actively listen to clients needs, identify relevant issues, and advise them with regard to a wide range of solutions that are in their best interests. We take pride in placing our clients best interests ahead of our own. Whether discussing potential loan modifications, refinancing as a last resort, or even short sales, our highly knowledgeable, talented team enjoy helping home buyers and sellers respond to what can often seem like daunting challenges with complete information, sensitivity, professionalism, and pride.

For more information, or to request a free initial consultation, call 858-376-1299.

Or go to www.mountaintrustrealy.com or www.mountaintrustmortgage.com

Gary Cooper, President
Mountain Trust Realty
Mountain Trust Mortgage

Short-listed assets: The JBC’s unlucky 7

Note: The following is a companion piece to the story Transparency amp; the new CJ: Will Gods of Padre Faura bare SALNs at last?

PRESIDENT Benigno Simeon C. Aquino III said it best when he declared dissatisfaction over the shortlist of chief justice candidates that was handed to him by the Judicial and Bar Council (JBC) over a fortnight ago.

Indeed, despite the hoopla about the live television coverage of the public interviews, citizens fielding questions via email, Twitter, and Facebook, the JBCs recently concluded selection process can apparently stand vast improvement.

Among other things, the JBC could do with a more thorough check of the wealth and possible conflicts of interests of those vying for posts in the judiciary and especially of those aspiring to become the countrys chief magistrate.

Apart from findings on the assets of new Chief Justice Maria Lourdes PA Sereno that raise questions, PCIJs research on the seven other short-listed candidates for the position follow:

Antonio T. Carpio. Considered by many as Serenos closest rival for chief justice, the high tribunals most senior member is still listed as a stockholder on record in the documents of at least three companies in the latest reverse search of the PCIJ this month: Techtrade AsiaPhil Inc. (General Information Sheet or GIS filed in 2012), One Bush Financial Advisors amp; Mgt. Inc. (GIS for 1997), and Philippine Arsenal Corporation, (1998 Primary License).

But as late as June 2010 when the PCIJ first called his attention to it the name Antonio T. Carpio was still enrolled as either incorporator, board member, or stockholder of at least 68 various corporate entities, according to the PCIJs reverse search of SEC records.

In the case of One Bush, Carpios reply letter to the PCIJ dated June 3, 2010, said the 375 shares worth P37,500 in ATCs name per 1997 GIS belong to former client.

For Philippine Arsenal Corp., he said, the 10 nominal shares worth P1,000 per 1998 articles of incorporation belong to former client. By the PCIJs verification, this company includes Severo Tuason, half-brother of former First Gentleman Jose Miguel Arroyo, as a major stockholder.

For Techtrade, Carpio said, the 50 nominal shares worth P5,000 in ATCs name belong to former client; inadvertently not updated.

As for the other firms, Carpio had told the PCIJ they were all or mostly his clients or that of the law firm that he co-founded, the Carpio Villaraza Cruz Law (CVC Law), or simply The Firm in legal circles.

Last week, the PCIJ emailed and faxed a letter to Carpio to inquire about the identities of the former clients in whose names he said he had nominal shares in Techtrade and Philippine Arsenal Corp. He has not replied as yet.

Meanwhile, two other companies Carpio Dev. Corp. and Bersol Dev. Corp. — were supposedly formed for Carpio family, did not operate, no assets and formed for Bernardo and Sol Carpio, parents, did not operate, assets are co-owned by heirs of Bernardo and Sol Carpio, respectively.

Three entities were also listed by Carpio in his reply to be owned by CVC Law: Foreign Business SVCS Corp., Corporate Reorganization Consultants, Inc. and Arcatrade Intl. Corp.

Carpios divestment from the CVC law on Oct. 25, 2001 the day after he was appointed to the Supreme Court has been reported in The Firms amended SEC papers. Yet, neither The Firm nor the SEC has records showing how much Carpio actually raised from his divestment from The Firm, who acquired his shares, and whether Carpio reflected the amount he raised from the divestment in his SALN and tax declaration for the year 2001, the year he entered the high court.

Bowing to public clamor for the justices to bare their SALNs during the impeachment trial of Renato Corona, Carpio and Sereno had separately disclosed summaries of their SALNs in January 2012.

Carpio had reported to have assets of P47,344,928.00 and liabilities of P75,000, for a net worth of P47,269,928.00 as of the year 2010.

Francis H. Jardeleza: First appointed by President Aquino as Deputy Ombudsman for Luzon on July 7, 2011, Jardeleza was named solicitor general six months later in February 2012. In his quick, short stint in public service, he should have already filed three SALNs upon assumption as Deputy Ombudsman on July 2011, as of December 2011, and upon assumption as Solicitor General in February 2012. His first two SALNs should have been filed with the Civil Service Commission (CSC), and the third, with the Office of the President.

The PCIJ was able to obtain Jardelezas July 2011 and Dec. 2011 SALN from the CSC. It has a pending request for Jardelezas Feb. 2012 SALN with the Malacantilde;ang Records Office, whose staff confirmed that the document is with the office.

Jardeleza had served as Corporate Secretary, General Counsel, and Compliance Officer of the diversified conglomerate San Miguel Corporation (SMC) until June 2011, according to published reports of the company.

He was designated to serve as compliance officer in 2006 to insure adherence to corporate governance principles and best practices, by no less than SMC board chairman and chief executive officer at the time, Eduardo lsquo;DandingM. Cojuangco Jr., uncle of President Aquino.

The GIS for 2011 of an SMC subsidiary, San Miguel Beverages Inc., still lists Jardeleza as a stockholder as of June 14, 2011, or just three weeks before he was named Deputy Ombudsman for Luzon on July 7, 2011.

The SALNs Jardeleza filed as of July 2011 and December 2011 make no mention of his interests in SMC anymore. Also, a subsequent GIS form that SMC submitted to the SEC on July 9, 2012 no longer lists Jardeleza as a stockholder.

In his December 2011 SALN, Jardeleza does not specify in which companies or instruments he has trust, fixed income, equity investments, and club shares that he valued at a total of exactly P160,000,000.00. He also names himself and wife Concepcion as having business interests and financial connections in a company that he does not identify, although he says it involves lease of residential property.

As of his December 2011 SALN, the solicitor general has a declared net worth of P221.62 million. It includes 13 pieces of real properties (house and lot, condominium units, salt bed, fishpond, riceland, etc) worth P58.94 million, personal and other properties worth P169.69 million, and liabilities of P7.02 million, representing a housing loan with the BPI Family Savings Bank.

Roberto A. Abad. The second most senior associate justice of the Supreme Court is still listed as a stockholder in the documents of two companies: Neo-Prex Trading Corp. and Omni
Prex Inc.

For the PCIJ story on the assets of the justices that ran in June 2010, Abad sent a reply letter dated May 28, 2010 in which he described these two companies as family corporations where I remain a stockholder.

There were other companies in which Abads name has been listed in the SEC records. In response to specific queries, Abad had written the PCIJ: I have no recollection of AS Business Solutions, Inc., Triad Business Assistance Inc, Filtropic Aqua Farms Resources Inc., OB Trading Corp., and Philippine World College, Inc.

I have been in private practice of law for 23 years before my appointment and I may have been included as nominal stockholder by my clients but I have no recollection of actively taking part in their management, Abad added. It is also possible that the stockholder is my namesake because in my experience, there are at least two Roberto Abads. The other one is also a lawyer.

But Abad also acknowledged that Roberto A. Abad amp; Associates 1 and Roberto A. Abad amp; Associates 2, and Abad amp; Associates are the names of my law firm where I was the senior partner.

My cousin asked permission to use my name for the foundation, Rosendo O Subido Sr. Charities for Poor Children giving harelipped children free surgery, Abad said. Communio Et Mission Formation Institute is an adult catechesis organization where I am a director still. But AM Integrals, Inc. is a messengerial company where I already sold my shares sometime in the 1980s.

Associate Justice Arturo D. Brion. His latest available SALN on file with PCIJ dates back to 2006, when he was labor and employment secretary. At the time, Brion declared he had 12 real properties worth P34.5 million, cash in bank of US$25,000 and P40,000, receivables of US$30,000, and liabilities of US$10,000 (loan from Erasmo Brion) and P500,000. He reported his net worth at P39.15 million at the time, six years ago.

His real properties included five pieces of agricultural lands that he said were inheritance properties of his wife, Antonietta A. Brion, and one agricultural land and one house and lot that he said were donations.

Brions 2006 SALN also bared that his wife was then working as Court Attorney IV with the Court of Appeals, while his brother Job D. Brion was health officer of San Pablo City.

Associate Justice Teresita L. de Castro. Her latest available SALN on file with the PCIJ is as an associate justice of the Sandiganbayan in 2003. At the time, she reported having six real property assets worth only P1,041,000 (two houses and four lots in Paranaque acquired from 1983 to 1997), personal and other properties worth P2.34 million more or less, and liabilities of approximately 2M.

She did not fill out the line indicated for her net worth although the amounts she enrolled would bring it to P1.39 million only.

De Castro disclosed under the section for business interests and financial connections that her husband Eduardo de Castro was connected with the Goldlane Taxi company as of 1997. She also said that her half-brother Eduardo L. Leonardo was then working as executive assistant with the Sandiganbayan, and her daughter Christine Genevieve, executive assistant at the Court of Appeals.

Cesar L. Villanueva. The chairman of the Governance Commission for GOCCs (government-owned and controlled corporations) or GCG had also served as a member of the Board of Governors of the Makati Medical Center, Clark Development Corp., Clark International Airport Corp., and as a member of the Board of Trustees of the Institute of Corporate Directors and the Kapampangan Development Foundation.

The PCIJ has no copy of Villanuevas SALNs as chairman of GCG.

Villanueva is also listed as incorporator of the Philippine Association of Law Schools, Inc. in its 2010 articles of incorporation and by-laws. The Law School listed under Villanueva is the Ateneo de Manila University in Rockwell Center, Makati City.

As well, he is listed as incorporator of the Ateneo Class 81 Blue Legal, Inc. in its 2005 articles of incorporation and by-laws. Villanuevas address is the same address identified in the articles of incorporation of the Philippine Association of Law Schools, which is Villa Gloria Subdivision in Angeles City.

The GCG was constituted under Republic Act No. 10149 or the GOCC Governance Act of 2011 to act as a central advisory, monitoring, and oversight body with authority to formulate, implement and coordinate policies for GOCCs, government financial institutions, government instrumentalities with corporate powers, and government corporate entities. The Budget and Finance secretaries are ex-officio members of the GCG.

Ronaldo lsquo;Ronnie B. Zamora. In his SALN for the year 2009, his latest on record dated April 29, 2010, or weeks before he ended his term in the 14th Congress, Zamora did not declare a single company in which he has business interests and financial connections. But PCIJs reverse search and public disclosure records of companies in which he and elder brothers Manuel and Salvador II have significant equity interests show that Congressman Zamora had for years already been well connected to many corporate interests.

The ex-congressman from San Juan who had also served as executive secretary of former President Joseph Estrada is board chairman of Cagdianao Mining Corp. or CMC, which registered with the SEC on July 25, 1997 as a 100%-owned subsidiary of Nickel Asia Corp., where he also sits as a board member. CMC is primarily engaged in the exploration, mining and exporting of nickel ore located in Cagdianao, Dinagat.

The congressmans brother Salvador II made a P5-million contribution to President Aquinos election campaign in May 2010. It was received on March 2, 2010.

In the same election period, Congressman Zamora served as a campaign strategist of Nacionalista Party presidential candidate and Sen. Manuel B. Villar, Aquinos rival candidate.

A certain Ronaldo B. Zamora is listed as stockholder of Jaguar Security amp; Investigation Agency, Inc. in the General Information Sheet (GIS) of the company for the years 2006, 2008, 2009, 2010, and 2011. Zamoras listed address in the GIS (Ayala Heights, Quezon City) is different from the one listed in his SALNs (Greenhills, San Juan City). Both documents show the same Taxpayers Identification Number or TIN (105-549-511), however.

If the Ronaldo B. Zamora listed in Jaguars GIS is the same Ronaldo B. Zamora being referred to, by all indications the former congressman did not declare Jaguar Security amp; Investigation Agency Inc. in his 2008 and 2009 SALNs.

Interestingly, Jaguars 2012 GIS, which the SEC received on May 17, 2012, no longer lists Ronaldo B. Zamora as a stockholder.

In another company, Plus Properties, Inc., Zamora is also listed as board member and stockholder in its 2011 and 1997 GIS only. Zamoras address in the 2011 GIS (7 Lopez Jaena St, Ayala Heights Village, Old Balara, Quezon City) is different from the one listed on his SALNs (Greenhills, San Juan City), but the TIN is the same in both documents. The PCIJ does not have the 2011 and 1997 SALNS of Zamora.

Yet another company, Equinox MDSG Corp., in its 1983 primary license, enrolls a certain Ronaldo B. Zamora with address at 52 Van Buren Street, Greenhills, San Juan, MM as stockholder. Zamoras address in his 2001 SALN is 22Van Buren St., North Greenhills, San Juan. The two documents bear similar signatures.

These gray matters about the state of wealth of the chief justice nominees remain unsettled issues pending the disclosure of the SALNs particularly of the incumbent justices, and the two other nominees from the Executive branch. With research by Rowena F. Caronan, PCIJ, August 2012

14% Dividend Yield, Heavy Insider Buying Make This mREIT A Strong Buy

Two Harbors Investment (TWO) was one of the mortgage REITs that we considered in our mREITs portfolio. Among the mREITs in the portfolio, Two Harbors continues to be the only REIT that positioned its assets portfolio in a way that enabled the company to earn the highest interest rate spread of 3.6%. Amid the non-existent interest rate environment, it offers an attractive dividend yield of 14%. The stock, when compared to its peers, is valued at a slight premium. The companys alternative investment strategy, and the blend of agency, non-agency, fixed-rate, and adjustable-rate mortgages make the stock an ideal diversified investment. These reasons, and the heavy insider buying witnessed during the current year, make us bullish on the stock.

Company Overview and Asset Portfolio Composition

Two Harbors Investment is one of the rarely followed mid-cap hybrid US REITs, which aims to primarily invest in residential mortgage-backed securities for which principal and interest payments are guaranteed by any government-sponsored agency. It also seeks to invest in non-agency residential mortgage-backed securities and residential mortgage loans. As part of a diversification approach, the company also invests in single and multifamily residential real properties in the US This is another reason why we have classified it as a hybrid REIT. The property is rented in order to generate income. Over the last five quarters, approximately 81% of the companys asset portfolio was composed up of agency MBS, most of which (approximately 82%) were fixed rate, while the remaining are adjustable rate mortgages (ARMs). The companys exposure to ARMs reduces its sensitivity toward interest rates and prepayments risk; however, the sensitivity from either is not totally eliminated. The company uses short-term investments, particularly repurchase agreements, which are float-rate debt instruments used to fund its assets portfolio.

Recent Quarters Performance Review

The company earned a net interest spread of 3.6% during the second quarter of the current year, 30bps below what it earned during the first quarter. This was the lowest in the past four quarters. In comparison, both Annaly Capital (NLY) and American Capital (AGNC) posted a net interest spread of 1.54% and 1.65%, respectively. This is largely due to the fact that Two Harbors invests in high yielding non-agency securities, while Annaly Capital and American Capital exclusively invest in agency securities only. Like Annaly Capital and American Capital, the spread for Two Harbors declined largely due to the flattening of the yield curve. Due to the continuous efforts made by the Fed, the yield curve flattened, decreasing the yields on the assets that these mortgage REITs earned. An asset yield of 4.6%, which Two Harbors earned on its residential mortgage-backed securities, declined by 30bps compared to the linked quarter. This was lowest since the last year. At the same time, the company seemed to not have benefited from the declining short-term interest rates, as its cost of borrowing remained flat at 1% when compared to the previous quarter. This is still below the 1.5% and 1.08% costs of borrowing for Annaly Capital and American Capital , respectively.

Net interest income for the company during the second quarter surged to $90.4 million, up from $36.9 million during the prior year. Net interest income surged primarily due to a 161% surge in interest income coming from available-for-sale securities. Interest expense for the quarter surged to $15.5 million from $3.8 million in the first quarter.

Alternative Investments

US housing is bottoming. This represents an attractive investment opportunity, and as an alternative investment, the company has been purchasing properties, including foreclosed homes, to be rented out. The company purchased homes worth $48 million in July, bringing total homes purchases since the beginning of the year to $120 million. Fitch is reluctant to give Two Harbors the best credit ratings owing to limited performance data for the sector and individual property management firms. Analysts at Fitch further state that data on market rents, rent roll histories, vacancy rates, and supply and demand also have limited availability. If the rest of the credit rating agencies follow, the company might have difficulty raising debt in the future.

Insider Buying

The following graph illustrates how heavy insider buying has been witnessed since the beginning of the year. A total of 115,500 shares were purchased by some of the top executives of the company, reflecting their bullish sentiments on the companys future.

Click to enlarge image.

Source: Insider-Monitor.

Risks and Their Mitigation

Like all mREITs, Two Harbors asset portfolio is subject to interest rate risk, prepayment risk, changes in home prices, and defaults by homeowners. However, the blend of agency and non-agency securities in the assets portfolio enables Two Harbors to reduce most of these risks. The company does not expect housing prices to stabilize fully during 2012. This, combined with the stubbornly high unemployment rate of 8.3%, lead the management to expect no significant acceleration in prepayments in 2012. However, we believe the Feds continuous efforts to flatten the yield curve through Operation Twist, its maturity extension program, and the government-sponsored Home Affordable Refinance Program HARP, have the potential to significantly affect the companys prepayment expectations.

The current economic situation validates the optimism over further easing by the Federal Reserve Bank. In the event of such easing, interest rates are expected to decrease further. In such a scenario, if interest rates decline by 50bps, Two Harbors, in its latest quarter filing to the SEC, mentions a 3.8% (or $14.9 million) decline in net interest income. At the same time, the value of total net assets will increase by $12.5 million.


As part of the companys investment strategy, the management deploys moderate debt in the capital structure, which is reflected in its leverage ratio of 4.8 times. This is in comparison to 3.4 times, 7.85 times and 8.66 times for MFA Financials (MFA), American Capital Agency, and Capstead Mortgage (CMO), respectively. The company maintains relations with 23 different counterparties for its funding requirements in order to reduce its counterparty risk. Besides having domestic counterparties, the company has relations with international counterparties in Europe and Asia. European counterparties constitute over 32% of the entire funding requirements of the company, while approximately 40% of the funding requirements are covered by international counterparties. Where this strategy reduces counterparty risk, it increases risk stemming from the European debt crisis. If the crisis worsens, Two Harbors could face a funding shortfall and might have to seek funding from other counterparties.

Dividends and Share-Repurchase Program

Mortgage REITs in the US are well-known for their enormous shareholder distributions in terms of dividends, and TWO is no exception. In the prevailing nonexistent interest rate environment, Two Harbors stock offers a massive dividend yield of 14% as compared to 1.71% offered by a 10-year US treasury.

Besides, the company aims to distributed wealth among its shareholders through its share repurchase program. The management is authorized to repurchase 10 million shares of its common stock.


The stock, with a YTD performance of 24%, is trading close to its 52-week high and has a P/B value multiple of 1.15 times. The stock trades at a slight premium of 5.5%, 8.5%, and 8.5% when compared to Invesco Mortgage Capital (IVR), Capstead Mortgage and Annaly Capital, respectively.


Based on the above analysis, we recommend yield-hungry investors to buy the stock and reap the benefits of its sufficiently attractive dividend yield. The company employs moderate leverage giving it more room to increase debt to support its dividend distributions in the short term, and magnify results. This, however, should constitute a small part of the entire mREITs portfolio, and to better diversify the mREITs portfolio we recommend buying American Capital Agency and Annaly Capital.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure: The article has been written by Qineqts Financials Analyst. Qineqt is not receiving compensation for it (other than from Seeking Alpha). Qineqt has no business relationship with any company whose stock is mentioned in this article.

Guest column: Less income, higher auto insurance premiums demonstrate need …

By Pete Kuhnmuench

Its time to change. Michigan has the highest mandated auto insurance medical benefit in the country. No other state comes close to requiring the unlimited, lifetime medical benefits that Michigan law requires all policyholders buy. A recent study showing Michigan motorists are paying a higher percentage of their household income on auto insurance than those in other states demonstrates its time to reform this expensive, unsustainable high-benefit system.

Prop 33 Cheat Sheet: Auto Insurance Rates Based on Driver History

News gt; Ballot Brief gt;

Elections 2012 gt; Propositions gt; Prop 33 Cheat Sheet: Auto Insurance Rates Based on Driver History

THE RUPEE: dollar slips

The rupee gave up overnight weakness against dollar on the currency market on Saturday in process of slow trading, dealers said. The rupee gained 10 paisa in relation to dollar for buying and selling at 94.10 and 94.30, they said.

OPEN MARKET RATES: The rupee, however, dropped by 40 paisa versus euro for buying and selling at Rs 115.00 and Rs 116.00, respectively. At the weekend euro posted its first weekly drop against dollar and yen in three weeks on Friday as investors refocused on the uncertainty surrounding possible European Central Bank action to contain the debt crisis and deteriorating growth in the euro zone.

A weaker-than-expected rise in Chinese exports, which followed disappointing German data earlier this week, stoked concerns about global economic growth. That boosted the safe-haven dollar and yen and pressured commodity-linked currencies such as the Australian and Canadian dollars.

Open Market Rates: InterBank Market for Dollar on Saturday.

RUPEE IN LAHORE: The Pak rupee stayed unchanged on buying side while it gained five-paisa on selling side in relation to the greenback in the local currency market on Saturday.

According to the currency dealers, the dollar commenced trading at its Friday closing of Rs 94.20 and Rs 94.50 as its buying and selling rates, respectively. There was no visible change in the dollars value during the days trading. However, at the end of trading, it was closed at Rs 94.20 and Rs 94.45 on buying and selling sides, respectively, the dealers said.

The rupee-pound sterling parity remained unchanged amid sluggish trading trend in the open market. The pound was traded at its overnight closing of Rs 146.50 and Rs 147.30 on buying and selling counters, respectively, they added.

RUPEE IN ISLAMABAD AND RAWALPINDI: The rupee-dollar parity remained unchanged on the open currency markets of Islamabad and Rawalpindi here on Saturday.

The dollar opened at Rs 94.2 (buying) and Rs 94.3 (selling) against same last rate. It did not observe further change in the evening session and closed at Rs 94.2 (buying) and Rs 94.3 (selling).

Pound Sterling opened at Rs 146 (buying) and Rs 146.5 (selling) against same overnight value. It did not observe further change in the evening session and closed at Rs 146 (buying) and Rs 146.5 (selling).

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Price Insurance Urges Illinois Parents to Review College-Bound Children’s Auto …

Illinois-based insurance agency provides auto insurance education for parents with college-bound children.

Lake Forest, Illinois (PRWEB) August 16, 2012

Local Illinois insurance agency, Price Insurance, provides auto insurance advice to the parents of college-bound children. The agency encourages parents to review their children’s car insurance policies, especially if freshman will be leaving their car behind for the first year.

Many times, college campuses do not permit freshman students to have cars on campus. This rule is mainly due to the lack of space on school grounds. If a campus with a population of 20,000+, such as Eastern Illinois University, allowed all students to have a car on campus, there would be no room to move.

If this is the case, parents are responsible for notifying their insurance agency. Why? Here are a few reasons why it is important to let an agent know about a college-bound child:

  • An agency may be able to “suspend” car insurance while a student driver attends college that is 100 or more miles from home.
  • Student drivers may be eligible for a “low mileage” discount, especially if the car will only be driven once the child is home on break.

Those students who are able to take a car to campus should still speak with an agent. Depending on the location of the school and where the car will be parked, the premium may be affected. The bottom line: Always inform insurance agents of changes.

Parents should understand that it is not wise to cancel car coverage all together. While it may seem like a good idea to get rid of the car insurance policy on a car that is not being driven, this could backfire once a child is home for winter or holiday break. Without car insurance, any accidents, issues or damages will not be covered. Luckily, the agents at Price Insurance are ready to help residents with this change. The Illinois insurance agency is committed to securing its clients, whether parents or students, with the appropriate coverage for an affordable price.

About Price Insurance:

Price Insurance was founded by Paul T. Price in the 1920’s. It is a fourth generation insurance agency and has been family-owned and operated since 1937. Over the years, the agency has built a solid network of carriers, allowing the staff to build detailed, unique and affordable Illinois insurance packages. Local residents looking for a wide variety of personal and commercial insurance in Illinois should turn to Price Insurance for high-quality protection and service.

For the original version on PRWeb visit: http://www.prweb.com/releases/prweb2012/8/prweb9804692.htm