e425
Filed by The Toronto-Dominion Bank
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934
Subject Company: |
|
The South Financial Group, Inc.
Commission File No.: 0-15083 |
This filing, which includes communications sent to employees of The Toronto-Dominion Bank
and/or TD Bank, Americas Most Convenient Bank on July 12, 2010, may contain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995 and
comparable safe harbour provisions of applicable Canadian legislation, including, but not limited
to, statements relating to anticipated financial and operating results, the companies plans,
objectives, expectations and intentions, cost savings and other statements, including words such as
anticipate, believe, plan, estimate, expect, intend, will, should, may, and other
similar expressions. Such statements are based upon the current beliefs and expectations of our
management and involve a number of significant risks and uncertainties. Actual results may differ
materially from the results anticipated in these forward-looking statements. The following
factors, among others, could cause or contribute to such material differences: the ability to
obtain the approval of the transaction by The South Financial Group, Inc. shareholders; the ability
to realize the expected synergies resulting from the transaction in the amounts or in the timeframe
anticipated; the ability to integrate The South Financial Group, Inc.s businesses into those of
The Toronto-Dominion Bank in a timely and cost-efficient manner; and the ability to obtain
governmental approvals of the transaction or to satisfy other conditions to the transaction on the
proposed terms and timeframe. Additional factors that could cause The Toronto-Dominion Banks and
The South Financial Group, Inc.s results to differ materially from those described in the
forward-looking statements can be found in the 2009 Annual Report on Form 40-F for The
Toronto-Dominion Bank and the 2009 Annual Report on Form 10-K of The South Financial Group, Inc.
filed with the Securities and Exchange Commission and available at the Securities and Exchange
Commissions Internet site (http://www.sec.gov).
The proposed merger transaction involving The Toronto-Dominion Bank and The South Financial
Group, Inc. will be submitted to The South Financial Group, Inc.s shareholders for their
consideration. The Toronto-Dominion Bank and The South Financial Group, Inc. have filed with the
SEC a Registration Statement on Form F-4 containing a preliminary proxy statement/prospectus and
each of the companies plans to file with the SEC other documents regarding the proposed
transaction. Shareholders are encouraged to read the preliminary proxy statement/prospectus
regarding the proposed transaction and the definitive proxy statement/prospectus when it becomes
available, as well as other documents filed with the SEC because they contain important
information. Shareholders may obtain a free copy of the preliminary proxy statement/prospectus,
and will be able to obtain a free copy of the definitive proxy statement/prospectus when it becomes
available, as well as other filings containing information about The Toronto-Dominion Bank and The
South Financial Group, Inc., without charge, at the SECs Internet site (http://www.sec.gov).
Copies of the definitive proxy statement/prospectus and the filings with the SEC that will be
incorporated by reference in the definitive proxy statement/prospectus can also be obtained, when
available, without charge, by directing a request to TD Bank Financial Group, 66 Wellington Street
West, Toronto, ON M5K 1A2, Attention: Investor Relations, 1-866-756-8936, or to The South Financial
Group, Inc., Investor Relations, 104 South Main Street, Poinsett Plaza, 6th Floor, Greenville,
South Carolina 29601, 1-888-592-3001.
The Toronto-Dominion Bank, The South Financial Group, Inc., their respective directors and
executive officers and other persons may be deemed to be participants in the solicitation of
proxies in respect of the proposed transaction. Information regarding The Toronto-Dominion Banks
directors and executive officers is available in its Annual Report on Form 40-F for the year ended
October 31, 2009, which was filed with the Securities and Exchange Commission on December 03, 2009,
its notice of annual meeting and proxy circular for its 2010 annual meeting, which was filed with
the Securities and Exchange Commission on February 25, 2010, and the above-referenced Registration
Statement on Form F-4, which was filed with the SEC on June 10, 2010. Information regarding The
South Financial Group, Inc.s
directors and executive officers is available in The South Financial Group, Inc.s proxy
statement for its 2010 annual meeting, which was filed with the Securities and Exchange Commission
on April 07, 2010. Other information regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security holdings or otherwise, is contained
in the above-referenced Registration Statement on Form F-4, which was filed with the SEC on June
10, 2010, and other relevant materials to be filed with the SEC when they become available.
THE FOLLOWING IS A COMMUNICATION SENT TO EMPLOYEES OF THE TORONTO-DOMINION BANK ON JULY 12, 2010
1. TD Bank Best North American Bank Euromoney
For the second year running TD Bank wins the best North American bank award, having succeeded in
expanding further into the US retail market while increasing its revenues in its domestic territory
of Canada. In 2009 and the first quarter of 2010, all of TDs business segments were profitable.
Despite the market conditions of 2009, the North American retail business contributed almost 80% of
the firms total profits, at C$4.7 billion ($4.6 billion). Bharat Masrani quoted; Ed Clark
mentioned. See full story
2. TD to create precious metals team The Globe and Mail
The banks TD Securities division is looking to hire about a dozen people to create a trading group
that can handle gold, silver, platinum and palladium. Tim Gardiner, who ran Mitsui & Co.s precious
metals business, has been tapped to lead the venture. Pat Meneley (EVP, Wholesale Banking) quoted.
See full story
3. Imagining the Next Wave of Bank M&A TheStreet.com
Now that the economy is healing, the rumblings are starting that traditional M&A is on its way back
to the bank sector. There have already been a few smallish transactions, most recently privately
held Eastern Bank Corp.s$163 million agreement to acquireWainwright Bank & Trust(WAIN:NYSE) for a
hefty premium. Then on Thursday, private equity stepped up as famed distressed investor Wilbur Ross
led a $100 million investment in Sun Bancorp. Bharat Masrani quoted. See full story
4. Create a legacy worth leaving behind; But the monetary aspects also require attention National
Post
My son, a Bruce Lee fan, had one of Lees quotes on the wall in his bedroom: The key to
immortality is first living a life worth remembering. Im not exactly a martial arts fan, but Ive
always liked the quote because, lets face it, we all want to lead a life worth remembering.
Immortality comes in the form of stories worth telling and a lasting legacy that benefits
generations to come. Written by Patricia Lovett-Reid. See full story
5. Retired? Dont count on it; Victoria-born Don Drummond just cant stay out of the numbers game
The Times Colonist (Victoria)
Don Drummond has clearly lost touch with his West Coast roots. The former TD Canada Trust chief
economist just doesnt seem to get the concept of retiring, taking it easy and enjoying a
well-deserved break. Don Drummond quoted; Craig Alexander mentinoed. See full story
6. Protecting your holiday The Globe and Mail
There are so many things to worry about when you go on vacation: Will anyone notice the streaks in
your spray-on tan? Will all the booze you packed put your baggage over the weight limit? Joanne
Nosworthy (AVP, Account Recovery and Fraud Management, TD Canada Trust) quoted. See full story
7. You cant beat brand newness The Toronto Star
When its time to buy a new vehicle, most people start out at the dealership looking at brand new
cars featuring the latest designs, technical innovations and colours. They might ultimately decide
to compromise and buy a used car, but grudgingly. TD Canada Trust mentioned. See full story
8. Homes the sweetest homes Edmonton Sun
Most Albertans planning on buying a new home have plans to buy a single-family home, according to
the new TD Canada Trust Home Buyers Report. Farhaneh Haque (Sales Manager, Mobile Mortgage
Specialists, TD Canada Trust) quoted. Similar article in Toronto Sun. See full story
9. Lassurance vie par petits morceaux [Life insurance in small pieces] La Presse
À quoi sert lassurance vie-épargne de Desjardins? Vaut-il la peine déparpiller son assurance vie?
See full story
story
10. Wary markets brace for earnings season The Globe and Mail
The second-quarter earnings season that kicks off today may be the make-or-break test for a global
recovery that suddenly looks to be sputtering. Beata Caranci (AVP and Deputy Chief Economist)
quoted. See full story
11. Off the charts job market; 93,200 rise caps record streak National Post
OTTAWA Somebody forgot to tell Canada that the global economy is slowing down and, worse still,
at risk of falling into the throes of a double-dip recession. Derek Burleton (VP and Deputy Chief
Economist) quoted. See full story
12. Gutting of census stirs opposition to Harper The Toronto Star
Among the Hungarian refugees who came to Canada after the 1956 Soviet invasion was a young math
graduate from Budapest. He joined the Dominion Bureau of Statistics as a junior clerk.
Simultaneously, he earned a PhD from Carleton. In 1985 he became head of Statistics Canada. He made
it the worlds most respected census agency, before retiring in 2008. Craig Alexander quoted.
See full story
13. New sponsorship deal has Theatre Under the Stars covered Vancouver Courier
Four years after Theatre Under the Stars looked like it might wind up underground, the Stanley Park
summer attraction has secured corporate funding for the first time in its 64-year history. Claire
Townsend (Corporate and Public Affairs) quoted. See full story
Looking
for TDs view on articles about the bank or the financial
industry? Visit TD News & Views
for background on some stories of the moment that may come up in your discussions with customers,
colleagues and friends.
Vous cherchez des opinions et des articles de la TD au sujet du secteur bancaire ou financier?
Visitez Nouvelles et Opinions de la TD pour y trouver de linformation sur certains sujets
dactualité qui peuvent être évoqués dans vos discussions avec des clients, des collègues et des
amis.
Full Stories
1. TD Bank Best North American Bank
Euromoney
July 2010
For the second year running TD Bank wins the best North American bank award, having succeeded in
expanding further into the US retail market while increasing its revenues in its domestic territory
of Canada. In 2009 and the first quarter of 2010, all of TDs business segments were profitable.
Despite the market conditions of 2009, the North American retail business contributed almost 80% of
the firms total profits, at C$4.7 billion ($4.6 billion).
TD Bank is now the 13 th largest bank in the US by deposits via organic growth and acquisition,
with 1,100 branches across the country.
In a market that is saturated and facing consolidation, with more than 8,000 banks, TD has managed
to differentiate itself from the traditional US retail banking model and win market share
from longstanding incumbents. Bharat Masrani, president and chief executive of TD Bank in the US,
says it is the service that the bank is offering that is winning customers. TD Bank goes a step
further than its competitors in fulfilling its motto of Americas most convenient bank.
In stores that allow for it, our employees can walk you to your car under an umbrella if it is
raining, says Masrani. Well give your dog biscuits and water so you can feel comfortable
bringing your pets into a store. We make
banking fun for children so they can use our Penny Arcade
change counters and win prizes while the parents are carrying out their banking business. It
attracts a deeper relationship. Good service is the only sustainable competitive advantage now in
the US retail industry. The strategy is working. In the second fiscal Canadian quarter, reported
in May, the US retail business produced net income of $241 million, up 45% from the same period in
2009.
That income has come not only from organic growth, where TD added 32 branches last year and hopes
to add 33 in 2010; it will also add more via acquisition. Commerce Bank is now completely absorbed
and TD Bank Financial Group president and chief executive Ed Clark has turned his eye to acquiring
banks that are being sold off by the Federal Deposit Insurance Corporation. Through these
acquisitions, the bank will become a top-10 player in Florida and a top-five player in South
Carolina. Masrani says the acquisitions make sense from a risk-profile perspective.
Weve been very sensible through the cycle, avoiding the carnage and not getting involved in risky
investments, Masrani says. We dont want to disturb that; the FDIC deals do not come with
catastrophic risk so it makes sense for us. If there are larger banks for sale outside the
FDIC-guaranteed deals, we will consider them, but with a considerable amount of due diligence.
At home in Canada, TD Bank is also gaining market share. In 2009, personal and commercial lending
grew by a little under 13% compared with just 5% among its Canadian peers. In the second fiscal
Canadian quarter of this year, net income of the banks Canadian retail business grew 31% year on
year and 6% over the first quarter.
As the financial crisis passes, the importance of regaining the trust of banking customers is
crucial to building reputation and winning clients.
Return to Top
2. TD to create precious metals team
The Globe and Mail
07/12/2010
BOYD ERMAN
Pg. B1
As gold shines ever brighter, Toronto-Dominion Bank plans to take advantage by building a precious
metals trading team.
The banks TD Securities division is looking to hire about a dozen people to create a trading group
that can handle gold, silver, platinum and palladium. Tim Gardiner, who ran Mitsui & Co.s precious
metals business, has been tapped to lead the venture.
TD hasnt been known as a top player in mining and precious metals. With metal prices soaring and
Canada home to many of the worlds publicly traded metals companies, the bank wants to do more.
Its a really interesting growth market, said Patrick Meneley, head of investment banking atTD
Securities . He said trading is highly specialized and very intricate, and fits hand-in-glove with
our investment-banking and sales and trading businesses.
By building a trading team, TD is hoping to do more business for its corporate clients in the
mining world, by helping them buy, sell and hedge the metals they produce. That may help the firm
win more deals with miners.
There are a lot of ways clients use metals traders to manage their risk, Mr. Meneley said.
Buyers of metals, both big and small, will also potentially be customers.
At the big end of the scale are manufacturers and huge investors. For example, an auto-parts
company might need to line up supplies of palladium for catalytic converters. Central banks, oil
refiners (which also need palladium), chemical producers and commodity investment funds are all
potential clients that TD is aiming for.
The trading business could also allow TD to offer products such as gold-linked notes sold to
individuals through the banks retail brokers.
The TD group will have to compete with some well-established rivals abroad and at home, including
Bank of Novas ScotiaMocatta metals trading arm, which is probably the best known in Canada.
TD is building on its experience with a natural gas trading business it started about five years.
The bank found that helped to feed its investment banking business by giving the firm an edge on
deals for companies that produce natural gas, Mr. Meneley said.
The metals team will include researchers, traders and sales people to drum up business. They will
be based in Toronto, London and Singapore. The bank expects to be ready to go in the fall.
At the same time, TD is bringing on a high-ranking mining investment banker in Ron DAmbrosio.
The firm hired him away from rival Macquarie Capital Markets.
Mr. DAmbrosio will be a managing director in TDs global mining group.
The hiring is part of a push to win more mandates helping mining companies as they buy and sell
rivals and as they raise money.
Were going to continue to grow that team, Mr. Meneley said.
Were definitely not done. The Canadian market is a global hub for mining. People come to Canada
to do deals, and we believe there are great opportunities in this market to continue to grow.
Return to Top
3. Imagining the Next Wave of Bank M&A
TheStreet.com
07/09/2010
LAURIE KULIKOWSKI
Now that the economy is healing, the rumblings are starting that traditional M&A is on its way back
to the bank sector.
There have already been a few smallish transactions, most recently privately held Eastern Bank
Corp.s$163 million agreement to acquire Wainwright Bank & Trust (WAIN:NYSE) for a hefty premium.
Then on Thursday, private equity stepped up as famed distressed investor Wilbur Ross led a $100
million investment in Sun Bancorp.
But the big deals may have to wait a while. Potential acquirers still need word on capital
requirements from
regulators, and a return to normalized earnings remains beyond the horizon. Banks
that might be open to selling themselves are of course dealing with many of the same issues. The
eventual shape of finreg and increased competition for failed institutions are also evolving
factors. But when the things do pick up, the activity could be brisk.
This cycle is going to be even bigger than usual, says analyst Bob Patten of investment bank
Morgan Keegan, which is owned by Regions Financial (RF:NYSE).
Patten predicts the first wave of mergers will be so-called takeunders of small banks by larger
regional banks looking for fill-in acquisitions. He expects the transformational deals to come
along in 2011. FDIC-assisted deals for failed or teetering
institutions, such as TD Banks
agreement to purchase the troubled The South Financial Group(TSFG:NYSE) in May are expected to
continue to dominate in the near-term as the industry isnt quite out of the woods when it comes to
credit costs just yet.
>>>10 Potential Small Bank Takeout Targets
Michael Rose, vice president of equity research at Raymond James & Associates, thinks the pace of
economic recovery will be key to timing the next wave of bank M&A as management teams need to get
more comfortable with being able to value the troubled assets of targets.
Rose predicts consolidation over the next five to 10 years will bring the current tally of more
than 8,000 banks in the United States down to roughly 6,000 banks.
The most likely buyers will be the large and mid-size regional banks. The too big to fail bunch
mainly Bank of America (BAC:NYSE), JPMorgan Chase (JPM:NYSE), Citigroup (C:NYSE) and Wells Fargo
(WFC:NYSE) could find it tough to participate as they deal with their sprawling businesses and
finregs impact. Although they could jump in under the right circumstances, as this article later
theorizes.
Foreign names like Canadas TD Bank, Barclays (BCS:NYSE), Spains BBVA (BBVA:NYSE) and Banco
Santander (STD:NYSE) also constitute a force to be reckoned with as they are itching for a larger
piece of the U.S. consumer.
When it comes, I think its going to be something like an arms race so to speak. Once one of them
gets comfortable with doing these transactions, more banks will do them, Rose says. At some point
its not yet but when this M&A wave does start, youre going to see the stocks of these
companies rebuild in an M&A premium.
So what kind of deals will we see when the cycle kicks in?
The Southeast looks like it could be ripe for significant consolidation. Banks of all sizes sought
to capitalize on the massive residential housing wave there, and many of these banks are now
sitting on mortgages, residential construction, and land and development loans that soured since
the downturn.
That being said, the common historical view is that banks are sold, not bought, meaning that no
deal will get done unless a potential sellers management team is willing to entertain discussions.
For this article, we decided to look at three sizable regional banks in the South that could be
potential sellers over the next few years. All three have yet to pay back TARP funds and are still
reporting losses while struggling against overwhelming amounts of troubled commercial and
residential loans. Once we settled on who might end up on the block, the next logical step was to
make an educated guess about who might be the logical buyer. Here then are three potential hookups:
3. TD Bank and Synovus (SNV:NYSE)
Headquarters: Cherry Hill, N.J./Portland, Maine and Columbus, Ga.
Combined Branches: approximately 1,300
Combined Deposits: approximately $120 billion
Combined Assets: $192 billion
Why This Merger: From a geographic standpoint, Synovus large presence in Georgia, South Carolina
as well as Florida, complements TD Bank s Maine-to-Florida strategy. Despite a recent large
capital raise, Synovus may also be a willing seller in the not so distant future either due to
board and/or management exhaustion as it works through its credit troubles.
Commentary: As the U.S. bank subsidiary to Toronto-Dominion Financial Corp.(TD:NYSE), TD Bank has
been aggressively expanding south of the Canadian border for the last five years.
The march began in 2005 when it bought a majority stake in what was once Banknorth of Portland,
Maine. TD then bought out the rest of the bank in 2007. It followed that deal up with the
acquisition of Mid-Atlantic powerhouse Commerce Bank one year later. Most recently, TD Bank made an
entry into Florida through the April FDIC-assisted acquisitions of Riverside National Bank of
Florida, First Federal Bank of North Florida and American First Bank, as well as the previously
mentioned agreement to acquire South Financial in May.
The Canadian bank is busy these days integrating the multitude of systems and operations that come
along with rapid acquisitions, however TD Bank s CEO Bharat Masrani said at a recent investor
presentation that the bank isnt ruling out further acquisitions.
"[S]hould a compelling opportunity come up, either an FDIC-assisted transaction or one where the
risks are clearly understood and manageable, we would be willing to take a look, provided our
current integration plans are finalized and well under way to execution, Masrani said.
Synovus has its fair share of commercial loan problems that it must continue to wade through.
Its a very challenging market and its been a very exhaustive process on Synovus management
team, Mogan Keegans Patten says. Over the long haul, the board will start to consider their
strategic alternatives, and its attractive capital cushion will appeal to buyers, especially to
buffer against further writedowns in its loan portfolio, he posits.
One other factor which may induce Synovus to sell longtime Chairman and CEO Richard Anthony took
a leave of absence for medical reasons in June. While the board named temporary replacements to
fill Anthonys position, if Anthony were to be replaced permanently, the board may decide that a
sale is the best alternative for shareholders.
For now though Synovus has bought itself time by completing a capital raise of over $1 billion in
May.
But Synovus fits the profile of a highly coveted acquisition candidate, Rose of Raymond James
says, noting that its one of the few banks with size and scale in the South, particularly in
Georgia and Florida, which will become more valuable over time.
2. JPMorgan Chase (JPM:NYSE) and SunTrust Banks (STI:NYSE)
Headquarters: New York and Atlanta
Combined Branches: 6,800
Combined Deposits: $1.04 trillion
Combined Assets: $2.2 trillion
Why This Merger: SunTrust has long been known as the JPMorgan of the South so why not make it
official? Seriously though, SunTrust provides across-the-board banking and investment services to
consumers and institutional customers, like, you guessed it, JPMorgan! The bank is also located in
an area where JPMorgan lacks significant presence, but may want to eventually gain access, given
the large amount of retirement assets in region as well as SunTrusts relationships with area
businesses.
Commentary: Lots of ifs, ands or buts come along with raising the prospect of this deal, but in
theory it does make sense. We know that JPMorgans CEO Jamie Dimon is looking outside of the U.S.
for future growth. We know that the banking titan is hitting the deposit cap limit, if it hasnt
already surpassed it. We know it is still integrating Washington Mutual and Bear Stearns and we
know that banks are sold not bought.
But lets say in two to three years, SunTrusts management decides to test the waters.
If the price is right, Dimon is smart enough to figure a way to get the deal done.
I dont think you can discount JPMorgan, says Raymond James Rose, who does not cover JPMorgan,
adding that historically SunTrusts valuation included an M&A premium in the stock.
To be fair, JPMorgan wouldnt be the only bank looking at SunTrust. Other banks including foreign
banks (rumors surfaced that Barclays was sniffing around the bank this week), and perhaps even a
U.S. Bancorp (USB:NYSE) may want a piece of the Southeast via SunTrust.
1. BB&T (BBT:NYSE) and Regions Financial (RF:NYSE)
Headquarters: Winston-Salem, N.C. and Birmingham, Ala.
Combined Branches: approximately 3,700
Combined Deposits:$202.4 billion
Combined Assets:$300.9 billion
Why This Merger: Again, another combination that has been posited in the past, but that doesnt
change the fact that BB&T could gain some major cost savings from the overlap of franchises, while
at the same time picking up complementary adjacent markets that would make the combined entity a
true Southern powerhouse.
Commentary: BB&T has long been friendly to M&A and states in its investor presentation materials
that it is looking for banks and thrifts with compatible cultures to enhance its banking
franchise. The North Carolina-based bank completed one of the largest FDIC-assisted deals of last
year by purchasing Colonial Bank.
Morgan Keegans Patten says BB&T is likely to play defense, given that banks headquartered outside
of the South are eager for real estate in that area of the country, such as TD Bank and Fifth Third
(FITB:NYSE). Patten doesnt discount the possibility of any substantial in-market deal for BB&T.
Looking forward, my view is that [BB&T CEO] Kelly King and the rest of management see the banking
environment as a slower growth revenue scalable environment and the only way to out-earn peers is
by
integrating strategic acquisitions with good cost saves, says Patten, who declined to comment
specifically on the potential for a BB&T/Regions transaction because Morgan Keegan is owned by
Regions.)
Regions has been named more than once as a potential seller, including in a recent research report
from Credit Suisse that listed the bank as one of its four names with the highest probability of
a takeout sometime next year.
Analysts say that the culture at Regions, which is a culmination of three large bank mergers
including the 2004 merger with Union Planters and the 2006 merger with AmSouth, never really meshed
well, which could give BB&T a leg up.
With the economy off its 2008-2009 lows, BB&T CEO King has said that the bank will turn back to
unassisted deals, so who knows?
"[W]ere not opposed to looking at unassisted deals at this point, but we are remaining firm in
terms of having a conservative view with regard to the economics of it, King said in a recent
conference call.
Return to Top
4. Create a legacy worth leaving behind; But the monetary aspects also require attention
National Post
07/10/2010
PATRICIA LOVETT-REID
Pg. FP12
My son, a Bruce Lee fan, had one of Lees quotes on the wall in his bedroom: The key to
immortality is first living a life worth remembering. Im not exactly a martial arts fan, but Ive
always liked the quote because, lets face it, we all want to lead a life worth remembering.
Immortality comes in the form of stories worth telling and a lasting legacy that benefits
generations to come.
Creating a legacy is about much more than just money, but the monetary aspect requires careful
attention. While we work to build wealth to satisfy our present needs, we also want to secure the
well-being of our families, both while were alive and through our estates when we pass on. Think
about this as more than just estate planning you are creating a sustainable legacy.
MANAGING YOUR ESTATE
One of the biggest challenges to creating a sustainable legacy is the tax implications upon death.
When you die, the total value of your registered assets is included as income in the year of your
death, and all of your capital assets (such as your investment portfolio and recreational real
estate) are assumed to have been sold immediately before death. This deemed sale may trigger a
sizeable capital gain, 50% of which is taxable. In addition, the estate assets may be subject to
probate fees or taxes. In some provinces (such as Ontario and British Columbia), these can be quite
large.
A quick win is to designate a beneficiary to your registered accounts. This allows your RRSP or
RRIF to avoid probate and pass directly to the beneficiaries (in most provinces, except Quebec).
You can also use a financial planning strategy know as the Personal Asset Transfer Plan. This plan
moves savings from a tax-exposed investment to a tax-exempt universal life insurance policy. The
policy provides immediate life insurance protection. The investment within the policy accumulates
on a tax-deferred basis, so your heirs will receive the proceeds tax-free.
There are many options to help reduce taxes and fees. Talk to a financial advisor who can help you
determine the best strategy for your personal situation.
HAVE THE TALK
Key to creating a sustainable legacy is ensuring that your family understands your wishes. I was
talking with a woman at a cocktail party recently about the importance of communicating your
thoughts with your family and she said to me, I dont need to do that. I always tape my will to my
fridge because even in periods of despair, my family will want to eat and they will find it.
Posting your will in the kitchen is not estate planning. Have the talk with your family about
what you would like to have happen once you are gone. Share what is important to you and explain
how and why you have made the decisions you have. This eliminates all of the second guessing and
ensures your legacy is in fact your legacy.
INSTILLING YOUR VALUES
An important aspect to creating a sustainable legacy is philanthropy. Make philanthropy a family
affair by instilling values in your children about the importance of giving back. That giving
back should be financial, but it can also be a donation of your time. Consider volunteering as a
way to share your expertise. Set an example for your children that they can follow in their
lifetimes.
Winston Churchill is said to have uttered: You make a living by what you get; you make a life by
what you give. Living by these words would lead to a life well-lived and remembered.
-Patricia Lovett-Reid, senior vice-president, TD Waterhouse, is one of Canadas leading authorities
on personal finance.
Return to Top
5. Retired? Dont count on it; Victoria-born Don Drummond just cant stay out of the numbers game
The Times Colonist (Victoria)
07/10/2010
ANDREW A. DUFFY
Pg. B1
Don Drummond has clearly lost touch with his West Coast roots.
The former TD Canada Trust chief economist just doesnt seem to get the concept of retiring, taking
it easy and enjoying a well-deserved break.
He was supposed to have retired this month from his post as one of this countrys most influential
economic experts.
He didnt, really.
I guess I traded in one full-time position for three part-time positions, said Drummond from his
Toronto home.
After 10 years with the bank, Drummond, 56, born and raised in Victoria and a graduate of the
University of Victoria in 1976, has handed off his chief economist and vice-president role to TDs
Craig Alexander.
But he remains with the bank in a part-time capacity for a year to ensure both parties are happy.
He has also taken on two roles at Queens University, where he received his Masters degree in
economics.
Drummond is the Matthews Fellow and Distinguished Visiting Scholar at the school of policy studies,
and as of January he will start teaching a course on economic issues and public policy.
I remember thinking when I decided to retire I was worried I wouldnt have much to do, he said.
That didnt last long.
Indeed, when news hit that Drummond was retiring from the bank, he had no fewer than 35 different
offers.
The positions hes taken, he hopes, will allow him to spend more time with his family, something
that drove him to retire the first time around.
One of the selling features to the family when we moved from Ottawa [and the federal finance
ministry] to Toronto [and TD Economics] was to be home more. That didnt turn out to be the case,
he said.
In recent years, Drummond has been on the road more than hes been home, doing in excess of 150
speaking engagements across the country each year.
And that schedule was about to become more hectic, as there was pressure to add more client
meetings in the American branches.
The job at TD was fantastic but so much travel started to wear a bit thin, he said, adding his
best piece of advice to Alexander would be to cut down on the client presentations. Thats
unfortunate, and ironic as its something I essentially built from scratch.
I find its hard for you to change it yourself, because for years I drove hard for our business
units to create those client events across the country and its gets hard after a while to say,
Im not going to come to that event, he said. Its much easier for the new guy to say, that
[Drummond] was an idiot, were not doing that.
Drummond already misses the job, if not the air travel, and says he has good timing to thank for
his enjoyment in his career overall.
Drummond spent 23 years within the federal finance ministry and was a senior figure during the
mid-90s when the government tackled Canadas serious debt and deficit issues, a period that while
difficult for all Canadians was fascinating for an economist with a yen for public policy.
And though he joined TD in 2000, when the economy was in his mind coasting, that all changed in
the last three years, which he also considers a career highlight.
I wouldnt have wanted to miss the deficit-reduction years in government, that experience in the
mid-1990s and the last couple of years working in the finance sector has been fascinating, he
said.
Of the recent economic turmoil, Drummond says: You have to be careful, as youre talking to
wealth-management clients who have lost a great deal of money, but as an economist there couldnt
possibly have been a better time. Every day was fascinating, you wake up every Monday to see some
startling new action from banks that have never been contemplated before.
Drummond takes some pride in Canada coming out of a deep global recession in relatively good shape,
noting
the hard work in the mid-1990s paid off.
Some other countries are sunk fiscally for years if not decades, and I think we saved Canada from
that. We have a deficit problem but we will probably be out of it in three to five years for the
federal [government] and most of the provinces as well, he said. We went through a kind of shock
therapy for three to four years in extreme form and got out of that, the rest of them will be
hammered for a long period of time.
Drummond still has some concerns about the Canadian economy, but they tend to revolve around the
same things as they always have productivity which he says he has obsessed over for decades.
So many of the things people like me said ought to be done 20 years ago have been done, but the
record has gotten worse, he said. We can have solid banks, more solid household balance
sheets and business balance sheets than the rest of the world, but if were not generating
productivity growth we cant sustain real income growth.
Drummond has become more convinced it is no longer a public-policy issue, but may be something
ingrained in the psyche of the Canadian business management class.
Maybe were not as aggressive or entrepreneurial as one might hope, he said, though he was quick
to add the history of the nation hasnt done many favours by creating protected markets, high
tariff barriers, Crown agencies and restrictions on foreign competition.
Its a little much to expect you to wave a wand and add free trade and all of a sudden everyones
mentality changes, he said. It takes a while and it may take the next generation, university
educated with foreign experience and maybe they will be different.
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6. Protecting your holiday
The Globe and Mail
07/12/2010
DIANNE NICE
Pg. B8
There are so many things to worry about when you go on vacation: Will anyone notice the streaks in
your spray-on tan? Will all the booze you packed put your baggage over the weight limit?
According to Joanne Nosworthy, associate vice-president of account recovery and fraud management at
TD Canada Trust, theres something else you should worry about: debit and credit card fraud.
She offers several tips for keeping your cards safe:
Write down the card issuers phone number. On the back of all credit and debit cards, theres a
phone number to reach the issuer in case the card is lost or stolen. The card issuer can usually
send you a replacement card within 24 hours or can direct you to a bank branch for immediate
assistance. If you dont write down these numbers and the cards go missing, however, you wont know
who to call and will lose valuable time.
Protect your PIN. When conducting a transaction at an ATM or making a debit or credit card
purchase, use your hand or body to shield the keypad when you enter your PIN, even if the device
you are using has a visor.
Keep track of everything. Hang on to your receipts and keep them together. When your account
statements arrive
after returning home, review them to ensure all transactions and charges are
correct.
Notify your card issuer. To discourage thieves from using stolen cards, your card issuer may
deactivate your card if the usage is not according to your regular pattern. Prevent this by letting
your issuer know you are going on vacation and will likely use your card more often.
Dont bring more than you need. You dont need a wallet full of credit and debit cards on vacation.
Only take the essentials with you two or three credit cards and your debit card should be enough.
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7. You cant beat brand newness
The Toronto Star
07/10/2010
Pg. H5
When its time to buy a new vehicle, most people start out at the dealership looking at brand new
cars featuring the latest designs, technical innovations and colours. They might ultimately decide
to compromise and buy a used car, but grudgingly.
The same thing seems to go for homes, according to a recent TD Canada Trust Home Buyers Report,
which revealed that if two homes were at the same price point, three-quarters of first-time home
buyers would prefer a newer home over an older home.
The TD news release didnt expand on the reasons behind this overwhelming preference among
first-time homebuyers, but I would think that the latest designs, technical innovations and colours
lead the decision-making process, whether first-time buyers are looking at condominium suites,
townhomes or single-detached homes.
When it comes to condominium design, as the largest condo market in North America, we have the best
building and interior designers who know how to maximize space and create affordable suites without
compromising on the finishes.
On the lowrise side of the equation, our builders and home designers are equally creative. Given
more space to work with, they are producing affordable starter homes for first-time buyers that
feature everything from higher ceilings to open kitchen/family room spaces to more private master
bedroom retreats. What I particularly like in a new home is the abundance of natural light, thanks
to larger yet more energy efficient windows.
When it comes to technical innovation, the obvious area where new homes stand out is in energy
efficiency. For first-time homebuyers, this means lower utility bills, not to mention a smaller
carbon footprint.
As for colour, as a new home buyer you get to select your cabinets, countertops, fixtures, flooring
and paint colours, as opposed to inheriting someone elses choices.
Theres some less sexy but equally important advantages to new homes that first-time buyers might
want to consider, not the least of which is the comprehensive mandatory new home warranty that
covers everything from your deposit to delayed closings to workmanship and materials to major
structural defects. Visit http://www.tarion.com/home/www.tarion.com to find out more.
By buying new, first-time homebuyers also dont need to worry about repairing or replacing the roof
or the furnace or other home components for a long, long time. That means more time for career
pursuits, leisure or maybe even
starting a family.
Ive personally bought two brand new homes over the years and can attest to the excitement that
comes with picking the house elevation and floor plan, making all the choices of finishings, then
ultimately moving in to a brand new, sparkling clean home and setting up shop.
My third home was a resale, so I can also attest to the amount of time, money and effort my wife
Linda and I have put into replacing and updating the home to our liking. Six years later, were
still at it, which brings me back to the TD study finding that for the same price, buyers prefer
new over resale.
My advice to first-time buyers is to be sure to factor in the incremental cost of redecorating,
repairing or replacing. When in doubt, I always say buy new, buy now!
-Stephen Dupuis is president and CEO of the Building Industry and Land Development Association. The
views expressed are those of the president.
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8. Homes the sweetest homes
Edmonton Sun
07/12/2010
MYKE THOMAS
Most Albertans planning on buying a new home have plans to buy a single-family home, according to
the new TD Canada Trust Home Buyers Report.
Fifty-nine per cent of Albertans surveyed for the report prefer a fully-detached home, with 17%
saying they would buy a condo and 14% would go for a townhouse or other semi-detached home.
If two homes were at the same price point, 68% would prefer a new home over an older home and
Albertans are split about the preferred location for their home; for the same price, 55% would
prefer a smaller home closer to work and 45% would prefer a larger home that requires a longer
commute to work.
The report says Albertans do their homework before they go shopping, especially getting their
financial house in order.
Getting pre-approved for a mortgage is at the top of the list, with 94% of buyers talking to a
lender so they know how much they can spend. Other top activities before making the purchase are:
Learning about mortgage options (93%), calculating closing costs (89%) and speaking to a mortgage
lender before shopping for a home (89%).
More than in any other province, Albertans report putting as large a down payment as they can
afford (95% vs. 88% nationally), with 65% saying they saved or plan on saving for two years or less
for their home purchase.
Despite the majority putting down as much as they can afford, only 25% plan to have more than a 20%
down payment. The remaining 75% will require their mortgage to be insured by organizations such as
Canada Mortgage and Housing Corporation (CMHC).
Its only natural to want your first home to be the home of your dreams, but it is important to be
realistic about what you can afford as a down payment and what that will mean for both the type of
home you buy and for your mortgage payments over time, says Farhaneh Haque, regional sales
manager, Mobile Mortgage Specialists,
TD Canada Trust.
I advise first time home buyers to consider a larger down payment because a 10% or greater down
payment will make a big difference. It may mean that you need to save longer before buying your
first home, but it will pay off in the end. Speak with a representative at your bank about setting
up an automatic savings plan to help you save.
With the future direction of mortgage rates uncertain, a majority of Albertans 73% has sought
or will seek the security of a fixed-rate mortgage.
Historically you are more likely to save interest costs with a variable rate or short-term
mortgage option, so if they can handle some volatility then I recommend buyers choose a variable
rate. If people are adverse to interest rate fluctuations then a fixed-rate is best, says Haque.
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9. Lassurance vie par petits morceaux [Life insurance in small pieces]
La Presse
07/12/2010
MARC TISON
À quoi sert lassurance vie-épargne de Desjardins? Vaut-il la peine déparpiller son assurance vie?
La publicité vante ses vertus à la radio: lassurance vie-épargne de Desjardins donne accès à une
protection de 25 000$ pour quelques dollars par mois. Une primeur de Desjardins, assure
linstitution financière.
Pour obtenir cette assurance vie à petit capital-décès, il faut être un épargnant, détenteur chez
Desjardins dune part sociale, dun compte dépargne avec opérations ou dun compte dépargne
stable. Cest un régime collectif pour les membres des caisses, résume Jean Gosselin, directeur
du développement des affaires chez Desjardins Sécurité financière. Le fait de détenir un compte à
la caisse leur permet dadhérer à notre protection.
Le capital-décès est fixé à 25 000$ si la police est associée au compte dépargne avec opérations
ou à la part sociale, et à 10 000$ dans le cas du compte dépargne stable. Les comptes conjoints
peuvent aussi être assurés, le capital-décès étant alors divisé en deux entre les conjoints.
La protection ne peut excéder 75 000$ pour lensemble des comptes de ladhérent, détenus dans une
ou plusieurs institutions.
La prime est prélevée automatiquement chaque mois dans le compte concerné et augmente quand lâge
de ladhérent atteint un multiple de cinq. Pour un capital-décès de 25 000$ sur un compte dépargne
avec opérations, la prime est fixée à 5,75$ par mois de 15 à 39 ans, 6,75$ de 40 à 44 ans, et
progresse ainsi jusquà 62,50$ par mois à partir de 65 ans.
Ladmissibilité est déterminée par un questionnaire de quelques points sur létat de santé de
lassuré. Le calcul de la prime ne tient pas compte de son sexe ni du fait quil soit fumeur ou
non. Le service est offert depuis 1987, et près de 400 000 comptes sont assurés de cette manière.
Pour qui, pour quoi?
Pourquoi opter pour cette assurance? Parce quil sagit dune assurance vie abordable qui peut
servir à couvrir les frais funéraires et les dernières obligations financières, indique le guide
du produit. Cependant, le capital versé au décès diminue à partir de 70 ans. Pour ce même compte
dépargne opérations, le capital-décès de 25
000$ passe à 17 500$ de 70 à 74 ans, et rétrécit ainsi
jusquà 5000$ à 85 ans. En dautres mots, plus les risques de décès augmentent, moins lassuré
reçoit dargent pour couvrir les frais funéraires qui étaient prétextes à cette assurance.
"À partir de 70 ans, plutôt que daugmenter la prime, nous avons choisi de diminuer légèrement la
protection par groupe dâge, explique Jean Gosselin.
La clientèle quon vise est celle qui ne peut pas se procurer dassurance individuelle, à des
sommes supérieures, poursuit-il. Cest souvent la clientèle des jeunes couples ou des travailleurs
saisonniers ou autonomes, qui nont pas accès à des régimes collectifs ou à des produits
dassurance de type individuel.
En effet, la majorité des adhérents ont moins de 45 ans.
Mais le planificateur financier et comptable Denis Preston, chargé de cours en assurances à HEC
Montréal, voit les choses dun tout autre oeil. Acheter de lassurance morceau par morceau, par
blocs de 25 000$, revient extrêmement cher, observe-t-il.
Lassurance vie-épargne sadresse aux personnes qui ne peuvent pas sassurer autrement,
estime-t-il. Les gens sont attirés par ce produit parce que cest facile, dit-il, mais ils
devraient consulter un planificateur financier pour vérifier dabord sils ont besoin dassurance
vie, et calculer ensuite la somme nécessaire.
À 30 ans, alors que les responsabilités financières commencent à saccumuler enfants, maison -,
la protection de 25 000$ de lassurance vie-épargne Desjardins coûte 69$ par année.
Pour un capital-décès plus conséquent de 100 000$, la prime annuelle dune assurance temporaire 10
ans sétablira à environ 109$ pour une femme de 30 ans non fumeuse, et à 130$ pour un homme du même
âge.
Sengager pour 10 ans
Que se passe-t-il au terme dune assurance vie temporaire 10 ans? Lassuré a alors le loisir de
sengager pour une autre période de 10 ans, aux termes du contrat initial cest-à-dire avec la
prime majorée qui y est prévue.
Mais rien noblige à le faire... et on a la plupart du temps intérêt à ne pas le faire.
Seuls les gens en mauvaise santé devraient renouveler leur assurance temporaire 10 ans, avise
Denis Preston. Les gens en bonne santé peuvent trouver meilleur marché ailleurs. Les coûts sont à
la baisse parce que lespérance de vie saccroît. Ils ont 90% de probabilités de trouver une
meilleure assurance.
Dans la mesure où elle est encore nécessaire.
Car il y a de fortes chances quune fois la maison payée et les enfants partis, les besoins
dassurance vie aient diminué de beaucoup.
Les gens font lerreur de penser que leur besoin dassurance vie est permanent, observe M.
Preston. Cest lexception.
Que ce soit pour une première assurance vie ou au moment dun renouvellement, la règle est simple:
la protection devrait correspondre aux besoins véritables. Ni plus ni moins.
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10. Wary markets brace for earnings season
The Globe and Mail
07/12/2010
DAVID MILSTEAD
Pg. B1
The second-quarter earnings season that kicks off today may be the make-or-break test for a global
recovery that suddenly looks to be sputtering.
The past several weeks have seen a string of disappointing economic data, as growth in the U.S. and
elsewhere unexpectedly slowed.
More bears came out of hibernation to argue the recovery that was once seen as V-shaped would look
more like a W an imminent double-dip recession.
Last weeks market rally, in which the prior weeks carnage was reversed, occurred without any
major economic or market news and blunted that talk.
What will occur over the next several weeks, however, is a string of major earnings releases with
little margin of error, owing to a consistent ratcheting up of expectations in 2010.
Youre going to need a lot of upside surprises to break the negative mentality, said Beata
Caranci, the deputy chief economist at Toronto-Dominion Bank.
And the high expectations tells you where the balance of risks are its much easier to
disappoint than surprise.
Peter Buchanan, a CIBC economist, said as economists are getting more cautious, analysts for
companies in the S&P 500 have not cut their estimates.
Well see whos right in the weeks to come.
Robert Kavcic, an economist at BMO Nesbitt Burns, notes that at the beginning of 2010, the
consensus analyst estimate for 2010 earnings for S&P 500 companies was 8.6 per cent below 2009
levels. On the strength of the fourth-quarter 2009 and first-quarter 2010 earnings reports, 2010
estimates have been jacked up so much that the consensus numbers are now 34 per cent above 2009.
For the second quarter, consensus estimates are for earnings to grow 27 per cent over 2009s second
quarter, according to financial data provider Thomson Reuters.
The last three quarters have been absolute blowouts with respect to earnings surprises, Mr.
Kavcic said, as about 80 per cent of S&P 500 companies have beaten consensus, versus a historical
norm of about 66 per cent.
But the market can only be fooled for so long ... it wont be surprising if the impressive rate of
earnings surprises seen in the past three quarters marks the high watermark of this cycle.
Mr. Buchanan, at CIBC, notes that Canadian analysts have actually tempered expectations recently,
meaning theres more downside risk in the U.S. from missed numbers.
Investors will get samplings from several sectors this week. Alcoa Inc. kicks it off Monday with a
look at industrial production.
Other companies reporting this week include Intel Corp., Advanced Micro Devices, Google Inc.,
JPMorgan Chase
& Co., Bank of America Corp., Citigroup and General Electric.
Cost-cutting is still the order of the day, so the earnings numbers probably wont disappoint like
the economic numbers did, said TDs Ms. Caranci.
Of course, cost-cutting typically includes head count, and thats a big reason why the blowouts in
corporate earnings havent translated to an across-the-board economic recovery.
We should have employment [head count gains] at a rate four to five times higher than it is, based
on the health of corporate profits, Ms. Caranci said. Productivity is at its highest rate since
the 1960s, unit labour costs are at their lowest point, and companies have very high liquidity, as
measured by their ratio of current assets to current liabilities yet companies havent brought
back workers to any large degree.
The longer that persists, [a downturn] is self-prophesizing, Ms. Caranci said. Another quarter of
healthy earnings, however, might ignite some faith in the sustainability of this recovery, and
that might feed into the labour market.
To that end, the real news of the earnings season may not come in the second-quarter numbers
themselves, but in the second-half outlooks issued by management. Theyre not necessarily going to
be negative, but they may be somewhat cautious, said Mr. Buchanan.
Certainly, there is enough bearish sentiment out there to make market watchers cautious. Daryl
Montgomery, founder of the New York Investing Meetup and a contributor to the Seeking Alpha
financial blog, said Friday that the negative ECRI weekly leading indicators, a collapse in
global shipping as measured by the Baltic Dry Shipping Index, and poor jobs and consumer confidence
numbers are all reasons he believes we have entered another period similar to late 2007 and 2008,
when the economic establishment had a rosy view of the economy, but a number of indicators were
flashing warning signs that a major downturn was coming.
Yet this weeks market performance suggests a significant number of investors are calming down
after the recent data and expect plenty of happy news in the coming weeks.
Slowdowns after the surge of economic recovery are normal, said BMO Nesbitt Burns senior
economist Michael Gregory. And, while the headwinds facing the U.S. economy are indeed formidable,
its simply way too premature to be shouting double-dip from the roof tops.
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11. Off the charts job market; 93,200 rise caps record streak
National Post
07/10/2010
PAUL VIEIRA
Pg. FP1
Somebody forgot to tell Canada that the global economy is slowing down and, worse still, at risk of
falling into the throes of a double-dip recession.
Jobs data for June were simply off the charts, said Michael Gregory, senior economist at BMO
Capital Markets, in describing the 93,200 gain in employment for the month. The result caps a
record three-month performance in terms of employment levels, with 227,000 new jobs added. This
gives Canada the honour of being the first Group of Seven economy to nearly recoup the job losses
sustained during the recession, and Canada did so at a faster pace than the downturns of the 1980s
and 1990s.
The numbers are impressive on their own, and even more so when compared with the mighty U.S.
economy, which last month recorded a net job loss of 125,000. Since July of last year, the Canadian
economy has added 403,000 net new jobs. Meanwhile, the United States churned out 176,000 positions,
and its payrolls remain 5.4% below peak levels.
This gigantic gap between Canada and the United States comes down to one thing.
The root of it is confidence, said Derek Burleton, deputy chief economist at Toronto-Dominion
Bank. In the U.S., employers are not very confident. They are worried. But in Canada, businesses
are dealing with a domestic economy that has been far more resilient through the recession. They
are feeling quite confident.
For instance, Mr. Burleton said U.S. companies might be scared off by the size of the
trillion-dollar budget shortfalls Congress is racking up on an annual basis, with no clear
near-term plan to rein it in, especially ahead of midterm elections. If you are a company and you
are looking to invest, you have to factor in the cost of future tax changes. Thats not driving all
the decisions, but that is a factor.
Canadas deficit has ballooned, but in contrast Ottawa has outlined a strategy to get back to
budget balance by mid-decade. In fact, the shortfall for the fiscal year just passed may turn out
to be as much as 13% less than the $53-billion forecast, based on preliminary estimates.
Unlike Canadas recessions of the 1980s and 1990s, this downturn emanated from abroad the result
of excessive risk-taking in real estate by U.S. and European lenders. Canadas GDP shrank 3.3% from
peak to trough during the three-quarter downturn, mostly due to a collapse in global demand.
Meanwhile, the service sector hummed along, with employment growth taking off as it dealt with
robust domestic demand (expanding at a roughly 5% annualized clip in each of the last three
quarters). The service sector accounted for the bulk of new jobs in June, and economists at
National Bank Financial noted employment in services is now 2.2% above the pre-recession peak, or
the equivalent of 287,000 new jobs.
The strength of the domestic economy will likely push the Bank of Canada to raise its benchmark
rate again at its coming July 20 meeting, analysts say. As it was the first G7 member to recoup
lost jobs, Canada was also the first to raise interest rates from emergency levels of 0.25%, or the
lowest possible level.
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12. Gutting of census stirs opposition to Harper
The Toronto Star
07/11/2010
HAROON SIDDIQUI
Pg. A13
Among the Hungarian refugees who came to Canada after the 1956 Soviet invasion was a young math
graduate from Budapest. He joined the Dominion Bureau of Statistics as a junior clerk.
Simultaneously, he earned a PhD from Carleton. In 1985 he became head of Statistics Canada. He made
it the worlds most respected census agency, before retiring in 2008.
So when Ivan Fellegi says the Stephen Harper government is being stupid about next years census,
you have to perk up and pay attention. He is so alarmed by the Tory decision to axe the mandatory
detailed census form, he says, that had he still been the chief statistician, hed have quit in
protest.
The national census, conducted every five years, consists of two parts. Eighty per cent of
households must fill out a short form recording age, sex, marital status, language, etc. The
remaining fifth must fill out the long
questionnaire place of birth, immigrant status, education,
employment, income, housing, ethnicity, language, mobility, child care, etc.
The data from the second is used by businesses to figure out what products and services to market
to whom and where, down to the neighbourhood level. Its used by governments and the broader public
sector to tailor services to the population daycare, schools, hospitals, seniors homes,
recreation services, police and fire protection, public transit, etc.
Its the mother ship of all surveys, says Armine Yalnizyan, senior economist at the Canadian
Centre for Policy Alternatives.
Adds Craig Alexander, chief economist at Toronto-Dominion Bank: Its absolutely crucial from a
public policy point of view.
But the Tories have decided that the longer form will no longer be mandatory. It will be voluntary.
Why? Because its coercive and intrusive, says the minister in charge, Tony Clement he of
G8/G20 infamy, of police coercion and of shovelling millions coerced out of taxpayers into his
riding of Parry Sound-Muskoka.
The gathered data wont be the same as from a mandatory survey. Some groups will respond less than
others, such as libertarians (whom the Tories are courting), aboriginals, new immigrants and people
with low incomes as well as very high incomes.
As a corrective, the government plans to increase the sample to 30 per cent (adding $30 million to
the cost). But that wont solve the self-selection bias.
An even bigger problem: Results from the new survey could not be compared with the data gathered
over the last 35 years.
Itd have been a heck of a lot better if this long-form census was cancelled altogether and
Ottawa saved the entire $100 million cost, Fellegi told The Canadian Press.
Others upset include: the Federation of Canadian Municipalities; Atlantic Provinces Economics
Council; City of Toronto; Canadian Association for Business Economics; Canadian Economics
Association; Canadian Association of University Teachers; Canadian Institute of Planners; Canadian
Council of Social Development; even the National Statistical Council.
The census decision was not initiated by StatsCan. It was a political decision, made without prior
consultation and announced quietly in the Canada Gazette.
The decision is widely seen as part of a pattern Harpers penchant for secrecy, obfuscation and
controlling information. Hes also said to dislike StatsCan, especially its analytical work, which
is whats being squeezed out. Several other surveys have been cut or compromised:
The annual Workplace and Employee Survey. It was the only source of information from employers
about health-, pay- and pension-related benefits to full-time and part-time employees. It was cut
back at the same time as growing concerns about the sustainability of retirement incomes.
The annual Survey of Household Spending. It charted the spending patterns of Canadian households
(savings rates and debt levels of rich, poor and middle class families).
The Survey of Financial Security. It measured the net worth of Canadians across all income and age
groups and
regions.
The Longitudinal Survey of Immigrants. It measured how well, or badly, newcomers are doing.
Participation and Activity Limitation Survey. It surveyed the number of people coping with physical
and mental disabilities.
These have all been political decisions, says Yalnizyan. Instead of evidence-based
decision-making, the Tories think decision-based evidence-making is preferable.
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13. New sponsorship deal has Theatre Under the Stars covered
Vancouver Courier
07/12/2010
JEREMY SHEPHERD
Four years after Theatre Under the Stars looked like it might wind up underground, the Stanley Park
summer attraction has secured corporate funding for the first time in its 64-year history.
TD Bank will provide the non-profit theatre group with $50,000 for the 2010 season.
I hope what they saw was an opportunity to be our first angel, said James Cronk, managing
producer of TUTS.
TUTS announced the sponsorship on June 21, four years after they were forced to cancel their 2006
season.
Cronk said he hoped the partnership would continue past 2010. TD signed a one-year deal with TUTS,
which includes first right of refusal for 2011, according to Cronk. The current season runs July 9
to Aug. 21.
The sponsorship will allow for discounted, last-minute seating for students. High school and
university students will also be able to purchase tickets for $20. TUTS tickets usually cost
between $29 and $42.
Cronk said getting corporate sponsorship was especially important due to government cutbacks to the
arts.
The Public Dreams Society has lost half its funding since 2009 for its Illuminaires lantern
festival due to provincial budget cuts, according to artistic director Sam Shem.
Samantha Jo Simmonds, social enterprise manager for Public Dreams Society, stated in an email that
Public Dreams received significantly less funding from Canada Council and the B.C. Arts Council, as
well as losing all gaming funding. She wrote that the City of Vancouver also reduced their event
funding.
Public Dreams Society is currently looking for corporate sponsorship, according to Simmonds.
Cronk said there was no backup plan if TUTS couldnt work out a deal with TD. Without [corporate]
support, TUTS would not be able to continue, he said.
One of the challenges is getting our name out there, he said, explaining the importance of the
partnership with TD in terms of gaining exposure. Marketing dollars are always at a premium.
Cronk added that one of the key factors in making the deal was TDs desire to connect youth with
music. TD also sponsors the Vancouver International Jazz Festival.
Before TUTS found a sponsor, Cronk stressed that any corporation would have to appreciate Theatre
Under the
Stars emphasis on mentoring young actors.
The cast of TUTS upcoming production of Joseph and the Amazing Technicolor Dreamcoat consists
largely of high school students.
Claire Townsend, corporate communications manager for TD, stated in an email that TUTS emphasis on
mentoring young actors was congruent with the companys philosophy.
One of the focuses of our TD community giving programs is to create opportunities for young
people, she wrote.
Townsend also stated that there were no plans to change anything for TUTS. They must be doing
something right as TUTS is now entering its 64th summer season, she wrote.
The partnership with TD comes just one month after TUTS made a deal with the Vancouver Park Board
and the federal government for funding to renovate Malkin Bowl, where the productions are staged.
The park board and the federal government will each donate $300,000 to the project, which includes
insulation for the stage and a huge retractable door to cover the stage and shield it from the
elements when its not in use.
The project is scheduled to cost $700,000 and conclude in 2011.
TUTS currently has a 10-year lease with the City of Vancouver. In addition to Joseph and the
Amazing Technicolor Dreamcoat, TUTS 2010 season includes Singing in the Rain.
Return to Top
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could cause or contribute to such material differences: the ability to obtain the approval of the
transaction by The South Financial Group, Inc. shareholders; the ability to realize the expected
synergies resulting from the transaction in the amounts or in the timeframe anticipated; the
ability to integrate The South Financial Group, Inc.s businesses into those of The
Toronto-Dominion Bank in a timely and cost-efficient manner; and the ability to obtain governmental
approvals of the transaction or to satisfy other conditions to the transaction on the proposed
terms and timeframe. Additional factors that could cause The Toronto-Dominion Banks and The South
Financial Group, Inc.s results to differ materially from those described in the forward-looking
statements can be found in the 2009 Annual Report on Form 40-F for The Toronto-Dominion Bank and
the 2009 Annual Report on Form 10-K of The South Financial Group, Inc. filed with the Securities
and Exchange
Commission and available at the Securities and Exchange Commissions Internet site
(http://www.sec.gov).
The proposed merger transaction involving The Toronto-Dominion Bank and The South Financial Group,
Inc. will be submitted to The South Financial Group, Inc.s shareholders for their consideration.
The Toronto-Dominion Bank and The South Financial Group, Inc. have filed with the SEC a
Registration Statement on Form F-4 containing a preliminary proxy statement/prospectus and each of
the companies plans to file with the SEC other documents regarding the proposed transaction.
Shareholders are encouraged to read the preliminary proxy statement/prospectus regarding the
proposed transaction and the definitive proxy statement/prospectus when it
becomes available, as well as other documents filed with the SEC because they contain important
information. Shareholders may obtain a free copy of the preliminary proxy statement/prospectus,
and will be able to obtain a free copy of the definitive proxy statement/prospectus when it becomes
available, as well as other filings containing information about The Toronto-Dominion Bank and The
South Financial Group, Inc., without charge, at the SECs
Internet site (http://www.sec.gov).
Copies of the definitive proxy statement/prospectus and the filings with the SEC that will be
incorporated by reference in the definitive proxy statement/prospectus can also be obtained, when
available, without charge, by directing a request to The Toronto-Dominion Bank, 15th Floor, 66
Wellington Street West, Toronto, ON M5K 1A2, Attention: Investor Relations, 1-866-486-4826, or to
The South Financial Group, Inc., Investor Relations, 104 South Main Street, Poinsett Plaza, 6th
Floor, Greenville, South Carolina 29601, 1-888-592-3001.
The Toronto-Dominion Bank, The South Financial Group, Inc., their respective directors and
executive officers and other persons may be deemed to be participants in the solicitation of
proxies in respect of the proposed transaction. Information regarding The Toronto-Dominion Banks
directors and executive officers is available in its Annual Report on Form 40-F for the year ended
October 31, 2009, which was filed with the Securities and Exchange Commission on December 03, 2009,
its notice of annual meeting and proxy circular for its 2010 annual meeting, which was filed with
the Securities and Exchange Commission on February 25, 2010, and the above-referenced Registration
Statement on Form F-4, which was filed with the SEC on June 10, 2010. Information regarding The
South Financial Group, Inc.s directors and executive officers is available in The South Financial
Group, Inc.s proxy statement for its 2010 annual meeting, which was filed with the Securities and
Exchange Commission on April 07, 2010. Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect interests, by security holdings or
otherwise, is contained in the above-referenced Registration Statement on Form F-4, which was filed
with the SEC on June 10, 2010, and other relevant materials to be filed with the SEC when they
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Les renseignements présentés peuvent contenir des énoncés prospectifs au sens de la loi intitulée
Private Securities Litigation Reform Act of 1995 et des dispositions dexonération comparables des
lois canadiennes applicables, y compris, mais sans sy limiter, des énoncés relatifs à des
résultats financiers et dexploitation prévus, aux plans, aux objectifs, aux attentes et aux
intentions, aux économies de coûts et à dautres énoncés des sociétés, qui comprennent des termes
et expressions comme « anticiper », « croire », « planifier », « estimer », « prévoir », « avoir
lintention de » et « pouvoir », ainsi que des verbes au futur ou au conditionnel et dautres
expressions similaires. Ces énoncés sont fondés sur les croyances et les attentes actuelles de
notre direction et comportent un certain nombre de risques et dincertitudes importants. Les
résultats réels peuvent différer considérablement des résultats avancés dans les présents énoncés
prospectifs. Les facteurs suivants, entre autres choses, pourraient entraîner de tels écarts
importants ou y contribuer : la capacité dobtenir lapprobation de lopération par les
actionnaires de The South Financial Group, Inc., la capacité de réaliser les synergies prévues
découlant de lopération selon les montants ou léchéancier prévus, la capacité dintégrer les
activités de The South Financial Group, Inc. à celles de La Banque Toronto-Dominion en temps
opportun et de manière rentable, et la capacité dobtenir les approbations gouvernementales de
lopération ou de remplir dautres conditions liées à lopération selon les modalités et
léchéancier proposés. Dautres facteurs qui pourraient faire en sorte que les résultats de La
Banque Toronto-Dominion et de The South Financial Group, Inc. diffèrent considérablement de ceux
décrits dans les énoncés prospectifs se trouvent dans le rapport annuel de 2009 sur formulaire 40-F
de La Banque Toronto-Dominion, et dans le rapport annuel de 2009 sur formulaire 10-K de The South
Financial Group, Inc. déposés auprès de la Securities and Exchange Commission (SEC) et disponibles
sur le site Internet de la SEC (http://www.sec.gov).
Lopération de fusion envisagée entre La Banque Toronto-Dominion et The South Financial Group, Inc.
sera présentée aux actionnaires de The South Financial Group, Inc. afin quils lapprouvent. La
Banque Toronto-Dominion et The South Financial Group, Inc. ont déposé, auprès de la SEC, une
déclaration denregistrement sur formulaire F-4 qui contient une circulaire de sollicitation de
procurations/un prospectus provisoire, et chacune des sociétés prévoit déposer dautres documents
relatifs à lopération proposée auprès de la SEC. Les actionnaires sont invités à lire la
circulaire de sollicitation de procurations/prospectus provisoire lié à lopération de fusion
proposée, ainsi que la circulaire de sollicitation de procurations/prospectus définitif, lorsque
disponible, ainsi que dautres documents déposés auprès de la SEC, car ils contiendront des
renseignements importants. Les actionnaires peuvent obtenir un exemplaire gratuit de la circulaire
de sollicitation de procurations/prospectus provisoire, et pourront obtenir un exemplaire gratuit
de la circulaire de sollicitation de procurations/prospectus définitif, lorsquil sera disponible,
ainsi que dautres documents ayant fait lobjet dun dépôt qui contiennent de linformation sur La
Banque Toronto-Dominion et The South Financial Group, Inc., sur le site Internet de la SEC
(http://www.sec.gov). Des exemplaires de la circulaire de sollicitation de procurations/prospectus
définitif et des documents déposés auprès de la SEC qui seront intégrés par renvoi dans la
circulaire de sollicitation de procurations/prospectus définitif peuvent aussi être obtenus,
lorsquils
seront disponibles, sans frais, en soumettant une demande à The Toronto-Dominion Bank, 15th floor,
66 Wellington Street West, Toronto (Ontario) M5K 1A2, à lattention de : Relations avec les
investisseurs, 1-866-486-4826, ou à The South Financial Group, Inc. Investor Relations, 104 South
Main Street, Poinsett Plaza, 6th Floor, Greenville, South Carolina 29601, 1-888-592-3001.
La Banque Toronto-Dominion, The South Financial Group, Inc., leurs administrateurs et dirigeants
respectifs et dautres personnes peuvent être réputés être des participants à la sollicitation de
procurations relativement à lopération de fusion proposée. Linformation concernant les
administrateurs et les dirigeants de La Banque Toronto-Dominion est disponible dans son rapport
annuel sur formulaire 40-F pour lexercice terminé le 31 octobre 2009, qui a été déposé auprès de
la SEC le 3 décembre 2009, et dans son avis de convocation à son assemblée annuelle et circulaire
de procuration de 2010, qui a été déposé auprès de la SEC le 25 février 2010 et dans la déclaration
denregistrement sur formulaire F-4 susmentionnée, qui a
été déposée auprès de la SEC le 10
juin
2010. Linformation concernant les administrateurs et les dirigeants de The South Financial Group,
Inc. est disponible dans la circulaire de sollicitation de procurations de The South Financial
Group, Inc. à légard de son assemblée annuelle de 2010, qui a été déposée auprès de la SEC le 7
avril 2010. Dautres renseignements sur les participants à la sollicitation de procurations et une
description de leurs intérêts directs et indirects, par titres détenus ou autres, sont inclus dans
la déclaration denregistrement susmentionnée sur formulaire F-4, qui a été déposée auprès de la
SEC le 10 juin 2010, et dautres documents pertinents qui seront déposés auprès de la SEC
lorsquils seront disponibles.
THE
FOLLOWING IS A COMMUNICATION SENT TO EMPLOYEES OF TD BANK,
AMERICAS MOST CONVENIENT BANK
AND THE TORONTO-DOMINION BANK ON JULY 12, 2010
Daily News Brief
July 12, 2010
Compiled by Brittany Roberge, Corporate and Public Affairs
TD BANK NEWS
1. |
|
Non-Profit Notes: July 5 The Record (NJ) |
Donations: The Community Chest Serving Englewood, Tenafly and Englewood Cliffs awarded the Center
for Food Action $5,268 to support its efforts at ending local hunger and homelessness. For
information, visit cfanj.org. [TD Bank is mentioned.]
2. |
|
AmericanFirst Renamed as TD Bank in Central Florida istockanalyst.com |
TD Bank has announced that all the three AmericanFirst stores in central Florida, US, will be
branded TD Bank. [TD Banks Fred Graziano is quoted.]
3. |
|
TD Bank Best North American Bank Euromoney |
For the second year running TD Bank wins the best North American bank award, having succeeded in
expanding further into the US retail market while increasing its revenues in its domestic territory
of Canada. In 2009 and the first quarter of 2010, all of TDs business segments were profitable.
Despite the market conditions of 2009, the North American retail business contributed almost 80% of
the firms total profits, at C$4.7 billion ($4.6 billion). [TD Banks Bharat Masrani is quoted.]
4. |
|
Foundation to Offer $1.7 Million in Grants to Support
Housing Initiatives
PNNonline.org (Similar article appears in Philanthropy Journal and The Berkshire Eagle.) |
The TD Charitable Foundation, the charitable giving arm of TD Bank, announced that it will award
$1.7 million in grants to support affordable housing initiatives from Maine to Florida, through its
2010 Housing for Everyone grant competition. [TD Banks Elizabeth Warn is quoted.]
In Washington, on Wall Street, and in anxious boardrooms and kitchens across the country, concerns
are rising about the possibility that the U.S. economy could slip back into recessiona so-called
double dip. The economy lost 125,000 jobs in June; the unemployment rate still hovers near 10
percent. Four years after it peaked, the housing market has yet fully to stabilize. Perhaps most
distressing, the vital forces of monetary and fiscal policy that the government marshaled to stave
off the Great Recession last year seem to have flagged.
[TD Bank is mentioned.]
6. Imagining the Next Wave of Bank M&A TheStreet.com
Page 1 of 26
Now that the economy is healing, the rumblings are starting that traditional M&A is on its way back
to the bank sector. There have already been a few smallish transactions, most recently privately
held Eastern Bank Corp.s$163 million agreement to acquire Wainwright Bank & Trust (WAIN) for a
hefty premium. [TD Banks Bharat Masrani is quoted.]
7. Business: Good deeds Seacoastonline.com
TD Bank, through the TD Charitable Foundation, recently donated $10,000 to Womens Business Center.
The funds will help the organization fund its educational programs and business counseling.
8. Community Banks are Expanding Times Herald-Record
The financial downturn that brought down some of the nations largest banks has had an opposite
effect on small community banks in the mid-Hudson. Community banks are finding now to be an
opportune time to expand and compete head-on with large banks still struggling to shake off toxic
loans that helped lead to the Great Recession. [TD Bank is mentioned.]
9. Wachovia ATMs Going Envelope Free Philadelphia Business Journal
As a precursor to being rebranded as Wells Fargo & Co. next spring, all local Wachovia Bank ATMs
will be converted to modern envelope-free machines this fall.
[TD Bank is mentioned.]
10. |
|
Canadian Economy Continues Strong Recovery
Associated Press [Similar article in St. Petersburg Times (FL), The Ledger (FL), The
Buffalo News (NY).] |
Canadas economys continues to outshine other advanced countries as the unemployment rate
unexpectedly dipped below 8 percent for the first time in a year and half. Statistics Canada said
Friday the country added a higher-than-expected 93,000 jobs in June and said the unemployment rate
dropped to 7.9 percent. [TD Bank Economist Derek Burleton is quoted.]
INDUSTRY NEWS
1. Bank of America Trades Hid Billions in Debt Wall Street Journal
Bank of America Corp. has told federal regulators that it made six trades from 2007 to early 2009
that led to it hiding billions of dollars of debt, according to a media report Saturday.
2. Wells Fargo Ends Free Checking Before New Bank Rules BusinessWeek
Wells Fargo & Co., the U.S. bank with the largest branch network, eliminated free checking accounts
for new customers as firms prepare for stricter consumer- protection measures.
3. |
|
Small-Business Lending Fund Finds Unexpected Support in Senate
American Banker |
Page 2 of 26
A drive to create a $30 billion small-business lending fund once thought headed to a quick death
in the Senate may now be on its way toward swift passage. The bill has
already passed a key vote in the Senate, and Democratic leaders have taken steps to try and block a
host of amendments from being added to the measure.
4. |
|
Reform Bills Exec Pay Mandates May Help Banks Rehab Image
American Banker |
Bankers may never be considered Boy Scouts on compensation, but in terms of the executive pay
provisions in the financial reform bill, they certainly are prepared. Say on pay? Check. Any
recipient of the Troubled Asset Relief Program already is familiar with the practice, which allows
shareholders to cast nonbinding, up-or-down votes on executive pay packages.
TD BANK NEWS
1. |
|
Non-Profit Notes: July 5
July 5, 2010 The Record (NJ) |
Donations
The Community Chest Serving Englewood, Tenafly and Englewood Cliffs awarded the Center for Food
Action $5,268 to support its efforts at ending local hunger and homelessness. For information,
visit cfanj.org.
Rebuilding Together Bergen County in Glen Rock received $5,000 from the TD Charitable Foundation of
TD Bank. The funds will be used to help repair and renovate single-occupancy rooms and a common
room at the YMCA of Greater Bergen County in Hackensack.
Employees of Marcal Manufacturing last month raised $3,600 by taking part in the George Washington
Bridge Challenge. With matching funds from Marcal, $7,200 went to the American Cancer Society.
Whats New
The annual Summer Sunset Blues Cruise 2010 sails into New York Harbor at sunset for the benefit of
St. Peters Haven for Families on Wednesday and July 13 from 6 to 8:30 p.m. Top regional blues
bands perform on the deck. Tickets are $55 per person. For information, call John Muller at
973-340-9405.
Celebrate the dog days of summer and help the Ramapo-Bergen Animal Refuge by creating a classic pet
portrait from Aug. 11 to 14 at Keith Hopkins Photography, 216 Godwin Ave. in Midland Park. The
photo studio is donating the $25 session fee to RBARI. Packages start as low as $35.95. For
information or reservations, call 201-670-9559.
A support group for those caring for a relative or friend who is physically frail or suffering from
Alzheimers disease will be held on Wednesday from 10 to 11:30 a.m. at the Gallen Adult Day Health
Care Center at the Jewish Home at Rockleigh. The session is free and open to the public. RSVP to
Shelley Steiner at 201-784-1414, ext. 5340.
Volunteers
Page 3 of 26
Bergen County CASA trains volunteer advocates to give abused and neglected children in the local
court system a voice to ensure they find safe and permanent homes. CASA will host a series of
informational sessions for anyone interested in becoming a volunteer, July 14 at 1 p.m., Aug. 10 at
7 p.m., Aug. 26 at 1 p.m., Sept. 2 at 10 a.m. and Sept. 14. at 7 p.m. For information, call
201-843-6700.
The YWCA Bergen County Rape Crisis Center is seeking dedicated female and male volunteers who are
interested in participating in special events for survivors, fund-raising, letter writing and
office support. The center offers a free 48-hour training program throughout the year to all
prospective volunteers. For information, call 201-881-1700. Volunteers must obtain an application
prior to training.
People
Project Literacy of Greater Bergen County in Hackensack has appointed Paul F. Ragusa to the board
of trustees. Ragusa is director of Bergen Community Colleges Philip J. Ciarco Jr. Learning Center
in Hackensack. He also serves on the boards of the Boys & Girls Club of Lodi and Hackensack, the
Family Support Organization of Bergen County and the Bergen County Community Action Partnership.
For information on Project Literacy, call 201-489-7066 or visit project-literacy.org.
Events
The Ramapo-Bergen Animal Refuge in Oakland is holding a gift and craft sale at the Copper Tree
Mall, 350 Ramapo Valley Road in Oakland, on July 16 from 9 a.m. to 9 p.m. and July 17 from 9 a.m.
to 5 p.m. There will be a wide range of gifts, some animal related. All proceeds benefit the
animals at RBARI.
START II (Save the Animals Rescue Team II) in Elmwood Park will hold a tag sale and flea market
July 17 from 10 a.m. to 5 p.m. and July 18 from 10 a.m. to 3 p.m. at the Elks Club in Tenafly, 20
Franklin St. The money raised will be used to provide food, shelter and medical assistance for
homeless animals. Drop-off donations will be accepted at the Elks Club on July 16 from 7 to 9 p.m.
For information, call Donna Eliot at 201-384-2871 or Elaine Snyder at 201-218-4504.
A fund-raiser to benefit Strengthen Our Sisters in Hewitt, which operates a shelter for victims of
domestic abuse, will be held July 18 from 1 to 5:30 p.m. at the Highlands Natural Pool, 180 Snake
Den Road, Ringwood. Tickets are $30 for adults and $10 for children under 12. Gift bags will be
given with inserts from top stylists such as Jacqui Phillips. For sponsorship opportunities, visit
sosdv.org.
Mill Pond Assisted Living, 124 Noyes Drive in Park Ridge, is hosting its annual charity Classic Car
Show on Aug. 15 from 10 a.m. to 3 p.m. (rain date is Aug. 29). Proceeds benefit the New Jersey
Elks Army of Hope program, specifically Wounded Warriors and Fallen Heroes families of those in
the National Guard and military reserve. For information, call Cathy at 201-782-0440.
Top
2. |
|
AmericanFirst Renamed as TD Bank in Central Florida |
Page 4 of 26
|
|
July 12, 2010 istockanalyst.com |
TD Bank has announced that all the three AmericanFirst stores in central Florida, US, will be
branded TD Bank.
Customers of AmericanFirst will be able to bank at any of the stores from Maine to Florida.
AmericanFirst accounts will be changed to the TD Bank accounts. Customers of AmericanFirst will
also begin to see the new TD Bank name and brand on account statements, merchandising, and other
forms of communication. Customers were also mailed new TD Bank Debit Visa Debit A cards.
Fred Graziano, head of retail banking at TD Bank, said: This weekend marks a significant milestone
to fold AmericanFirst into the TD Bank family. Although this is a new name for the bank, we still
have the same commitment to our customers and the community.
Top
3. |
|
TD Bank Best North American Bank
July 2010 Euromoney |
For the second year running TD Bank wins the best North American bank award, having succeeded in
expanding further into the US retail market while increasing its revenues in its domestic territory
of Canada. In 2009 and the first quarter of 2010, all of TDs business segments were profitable.
Despite the market conditions of 2009, the North American retail business contributed almost 80% of
the firms total profits, at C$4.7 billion ($4.6 billion).
TD Bank is now the 13th largest bank in the US by deposits via organic growth and acquisition, with
1,100 branches across the country.
In a market that is saturated and facing consolidation, with more than 8,000 banks, TD has managed
to differentiate itself from the traditional US retail banking model and win market share from
longstanding incumbents. Bharat Masrani, president and chief executive of TD Bank in the US, says
it is the service that the bank is offering that is winning customers. TD Bank goes a step further
than its competitors in fulfilling its motto of Americas most convenient bank.
In stores that allow for it, our employees can walk you to your car under an umbrella if it is
raining, says Masrani. Well give your dog biscuits and water so you can feel comfortable
bringing your pets into a store. We make banking fun for children so they can use our Penny Arcade
change counters and win prizes while the parents are carrying out their banking business. It
attracts a deeper relationship. Good service is the only sustainable competitive advantage now in
the US retail industry. The strategy is working. In the second fiscal Canadian quarter, reported
in May, the US retail business produced net income of $241 million, up 45% from the same period in
2009.
That income has come not only from organic growth, where TD added 32 branches last year and hopes
to add 33 in 2010; it will also add more via acquisition. Commerce Bank is now completely absorbed
and TD Bank Financial Group president and chief executive Ed Clark has turned his eye to acquiring
banks that are being sold off by the Federal Deposit Insurance Corporation. Through these
acquisitions, the bank will become a top-10 player in
Page 5 of 26
Florida and a top-five player in South Carolina. Masrani says the acquisitions make sense from a
risk-profile perspective.
Weve been very sensible through the cycle, avoiding the carnage and not getting involved in risky
investments, Masrani says. We dont want to disturb that; the FDIC deals do not come with
catastrophic risk so it makes sense for us. If there are larger banks for sale outside the
FDIC-guaranteed deals, we will consider them, but with a considerable amount of due diligence.
At home in Canada, TD Bank is also gaining market share. In 2009, personal and commercial lending
grew by a little under 13% compared with just 5% among its Canadian peers. In the second fiscal
Canadian quarter of this year, net income of the banks Canadian retail business grew 31% year on
year and 6% over the first quarter.
As the financial crisis passes, the importance of regaining the trust of banking customers is
crucial to building reputation and winning clients.
Top
4. |
|
Foundation to Offer $1.7 Million in Grants to Support Housing Initiatives
July 9th, 2010 PNNonline.org (Similar article appears in Philanthropy Journal and The
Berkshire Eagle.) |
The TD Charitable Foundation, the charitable giving arm of TD Bank, announced that it will award
$1.7 million in grants to support affordable housing initiatives from Maine to Florida, through its
2010 Housing for Everyone grant competition.
The fifth annual Housing for Everyone grant competition is one of the companys most widely known
signature programs.
Capital Improvements for Affordable Housing is the theme for this years grant competition.
Preservation or improvement activities must make a qualitative difference in the lives of
residents, improve the overall condition of the property, provide overall cost savings and/or
improve energy efficiency. The Foundation will award 34 grants ranging from $10,000 to $100,000, to
eligible housing non-profits that submit compelling proposals.
At TD Bank, we recognize the importance of supporting our local communities, said Elizabeth Warn,
president of the TD Charitable Foundation and senior vice president of community development for TD
Bank. Without access to affordable housing, it is difficult to sustain the well-being of the
communities we serve. That is why we are proud to help preserve and improve existing homes this
year.
Organizations that wish to enter the 2010 grant competition must have tax-exempt 501(c)(3) status;
must develop or maintain affordable housing, or provide housing-related programs and services to
low- and moderate-income individuals or families; and serve the communities where TD Bank does
business. Applicant organizations must also demonstrate fiscal responsibility and the impact they
have made on affordable housing efforts in their communities.
Proposals will only be accepted online and must be submitted by September 3, 2010, by 4 p.m.
Notification of awards will be made in early November 2010.
Page 6 of 26
Over the past few years of the Housing for Everyone competition, the Foundation has invested over
$5.25 million to help create or maintain more than 4,800 affordable housing units.
Top
5. |
|
On Our Own
The government seems to have run out of ideas for rebuilding the economy, but businesses and
consumers are figuring it out for themselves.
By Nayeli Rodriguez and Ryan Tracy
July 12, 2010 Newsweek |
In Washington, on Wall Street, and in anxious boardrooms and kitchens across the country, concerns
are rising about the possibility that the U.S. economy could slip back into recessiona so-called
double dip. The economy lost 125,000 jobs in June; the unemployment rate still hovers near 10
percent. Four years after it peaked, the housing market has yet fully to stabilize. Perhaps most
distressing, the vital forces of monetary and fiscal policy that the government marshaled to stave
off the Great Recession last year seem to have flagged.
In 2008 and 2009 the Federal Reserve (monetary policy) and the political system (fiscal policy)
rushed to the aid of the stricken patient. The Fed guaranteed and bought financial assets, slashed
interest rates, and flooded the financial system with money. Congress and the White House pushed
through an aggressive $787 billion stimulus package. These heroic, expensive interventions jolted
the economy back to life. In the first quarter of 2009 the economy shrank at a 6.4 percent annual
rate; in the first quarter of 2010 it grew at a 2.7 percent clip.
But the sugar high of low interest rates and government stimulus spending is wearing off. The
Federal Reserve, so imaginative when it came to saving the financial system, seems to have run out
of ideas for dealing with higher unemployment. More than half the stimulus, about $417 billion, has
already been spent. Congress adjourned in July without passing an extension of unemployment
benefits. And with midterm elections four months away, a new jobs bill seems unlikely. Even as
economic momentum flags, headwinds are gathering strength. In January 2011 most of the Bush-era tax
cuts are slated to expire; soon after, the Fed is expected to start raising the rates it controls.
The combination of higher interest rates and higher taxes is likely to tamp down consumer spending.
Thanks to Washingtons inaction, writes former Clinton labor secretary Robert Reich on his blog,
we are now slouching toward a tepid recovery that could just as well fall into a double-dip
recession, while a large portion of our population suffers immensely.
Sounds pretty grim. But if we had thrown in the towel every time monetary and fiscal policy failed
to meet expectations, Americans would be migrating to Mexico in search of jobs. While noting that
the U.S. economy has lost some momentum, Macroeconomic Advisers predicts GDP will grow 3.2 percent
in 2010 and 4 percent in 2011. At the end of the day, the recovery will remain intact even if
there is no additional policy support, says Mark Zandi, chief economist at Moodys Economy.com.
A recession-weary nation is still hurting from the financial meltdown. Click to view the gallery.
But there is still much work to be done. And while policy helped stop the panic and
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shocked the economy back to life, new government initiatives are not whats going to drive the next
phase of recovery. If American businesses and consumers want to avoid a slowdown, theyre going to
have to do it themselves. The good news: the expansion can continue if the U.S. economy taps into
some of the same non-governmental forces that helped propel the recovery of 2009a capacity for
innovation, resilience, and, most of all, an ability to ride the continuing wave of global growth.
This do-it-yourself stimulus has already started. Corporate Americas balance sheet has never
looked better, and consumers are paying down debt and bolstering savings. The challenge is a
reluctance to spend. To try to jump-start consumption, companies are enacting mini stimulus
programs of their own. In years past, teen-oriented retailer American Eagle has given away free T
shirts and movie tickets to potential shoppers as part of a back-to-school promotion. This year
its offering a free smart phone to shoppers who try on a pair of jeans (and sign up for a plan).
Chrysler just kicked off a round of promotions that includes zero-interest financing and an offer
to cover the first two installment payments. With banks reluctant to lend to small businesses,
warehouse giant Sams Club has started a program with an approved Small Business Administration
lender, Superior Financial Group. Sams Club will essentially subsidize a chunk of the loan process
to enable its members to borrow up to $25,000with the hopes theyll spend the proceeds in the
retailers wide aisles.
Private investment in business is suffering because theres a lot of excess capacitymalls, office
buildings, factories not being used. In the absence of new aid packages, some companies are finding
that existing programs can catalyze growth. In his July 3 weekly radio address, President Obama
announced a $400 million Department of Energy loan guarantee for Abound Solar, based in Loveland,
Colo. Abound, a startup that relies on technology developed at Colorado State University, had
raised $104 million from private investors in late 2008. This loan will allow us to complete our
factory in Colorado and build a larger plant in Indianapolisthe largest solar plant in the U.S.,
says CEO Thomas Tiller. Abound has 350 employees but is poised to group rapidly. Sales have grown
from $6,000 in 2009 to a projected $35 million in 2010 and could rise to $120 million in 2011.
Demand is three or four times what we can make, notes Tiller. Virtually all the panels Abound
stamps out95 percentare exported.
Connecting to overseas markets, as Abound Solar is doing, is perhaps the most vital tactic
do-it-yourselfers can pursue. For while Europe is faltering, the global economy continues to
recover. The International Monetary Fund on July 8 increased its forecast for 2010 global growth to
4.5 percent, in large measure to due to continued strong performances in China, India, Africa, and
Latin America. The IMF boosted Brazils projected 2010 growth rate to 7.2 percent, up from 5.6
percent in April.
Many experts have discounted President Obamas call to double exports by 2015 as a pipe dream. But
exports have been an engine of U.S. growth, up 17 percent in the first four months of 2010 from the
comparable period in 2009. Rapid growth, particularly in Asia, is conjuring immense markets out of
nothing for American producers. The New York Times recently reported that Chinas purchase of
American tree nuts has risen eightfold in the past five years, from $89 million to $737 million.
Exports will continue to provide an important source of output, income, and job growth going
forward, says Zandi.
Disney is building a chain of language schools in China that employs its famous characters to
instruct Chinese youths in English. (Heres hoping Donald Duck isnt one of the professors.) On
July 10 Apple opened a new store in Shanghai, one of 25 it plans to launch in China through 2012.
Like many things in China, the store design is a knockoff: the
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entrance is a glass cylinder that looks just like the entrance to the store in midtown Manhattan.
All these efforts may not directly create huge amounts of U.S. jobs, but the rising sales will
certainly bolster bottom lines. General Motors booming sales in Brazil and China will enable it to
repay taxpayers the $43 billion it owes more quickly.
Developments in the global economy are also boosting demand for services, the sector in which most
Americans work. Moodys Economy.com now has a team of 12 U.S.-based staffers working on stress
tests on European banks. In the first quarter of 2010 the number of foreign tourists visiting the
U.S. was 6.9 million, up 15.3 percent from the year before. At a recent presentation, Lawrence Lau,
professor of economics at the Chinese University of Hong Kong and at Stanford, noted that 1 million
Chinese tourists visiting the U.S. for two weeks would produce $6 billion per year in revenue. A
significant, persistent rise in Chinese tourism could narrow greatly the U.S.-China trade
deficit, he said.
With banks still reluctant to lend, businesspeople and entrepreneurs frequently have a tough time
finding new capital. Here, again, global growth is providing new opportunities. The U.S. may have
exited the World Cup in the second round, but theres one global competition it wins year and year
out: the contest for investments. The combination of a huge, wealthy domestic market, a highly
productive labor force, deep capital markets, and a legal system that protects intellectual
property makes the U.S. a major destination for foreign direct investment$44 billion in the first
quarter of 2010. The U.S. gets much more foreign direct investment than China, and it could get
even more, says Karl Sauvant, executive director of the Vale Columbia Center on Sustainable
International Investment at Columbia University (an institute endowed by and named after a
Brazilian steel company).
Already, the deals sections of the Financial Times and The Wall Street Journal read like an
international matchmaking service. On July 7, Swedens Hexagon, an instrument maker, bid $2.1
billion to buy Intergraph, an Atlanta-based engineering and mapping software company, and GM agreed
to sell its GM Global Steering Holdings subsidiary to the Chinese firm Pacific Century Motors for a
reported $450 million. According to Thomson Reuters, so far this year there have been 397 deals,
worth $116 billion, in which foreign companies bought U.S. firms, up dramatically from 265 such
deals, worth $32 billion, in the first half of 2009.
Much as immigrants frequently revitalize abandoned urban areas, well-capitalized foreign firms have
proved to be a source of vitality for crippled economic sectors. In May Canada-based TD Bank
(formerly Toronto-Dominion) took over three failed Florida banks with a combined 69 branches and
$3.9 billion in assets. According to the Federal Deposit Insurance Corp., eight banks that are
affiliates of foreign firms have acquired 11 busted institutions. Fiat, which saved Chrysler from
liquidation, on July 5 announced it would reintroduce the Fiat brand to American drivers by
building dealerships in 41 states.
And even as American banks cut back on lending, foreign banks are entering the market as a new
source of credit. Many of the largest loans, the large property financings that weve observed
over the last few quarters, have depended on the extension of credit by international lenders that
are active in the U.S., says Sam Chandan, chief economist at Real Capital Analytics. According to
his firm, so far this year international banks have accounted for 17 percent of large loans made on
commercial real estate, up from 9 percent in 2009. In late June the Industrial and Commercial Bank
of China said it would start making loans greater than $100 million to owners of commercial real
estate in the U.S. Banco do Brasil, having received permission from the U.S. government to operate
in America, plans to open 15 branches.
Page 9 of 26
The data point to a great irony of todays economic vista. Just as confidence among Americans in
the strength of the recovery is waning, foreigners faith in Americas future is on the rise.
Youre not going to put money into a country if you think the economy is going to tank, notes
Sebastian Teunissen, adjunct professor at the University of California, Berkeley, Haas School of
Business. In the first year of this expansion the greatest source of support for the U.S. economy
came from our nations capital. In the second year it will likely come from foreign capitaland
our own ingenuity.
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6. |
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Imagining the Next Wave of Bank M&A
By Laurie Kulikowski
July 9, 2010 TheStreet.com |
Now that the economy is healing, the rumblings are starting that traditional M&A is on its way back
to the bank sector.
There have already been a few smallish transactions, most recently privately held Eastern Bank
Corp.s$163 million agreement to acquire Wainwright Bank & Trust (WAIN) for a hefty premium. Then
on Thursday, private equity stepped up as famed distressed investor Wilbur Ross led a $100 million
investment in Sun Bancorp.
But the big deals may have to wait a while. Potential acquirers still need word on capital
requirements from regulators, and a return to normalized earnings remains beyond the horizon. Banks
that might be open to selling themselves are of course dealing with many of the same issues. The
eventual shape of finreg and increased competition for failed institutions are also evolving
factors. But when the things do pick up, the activity could be brisk.
This cycle is going to be even bigger than usual, says analyst Bob Patten of investment bank
Morgan Keegan, which is owned by Regions Financial (RF).
Patten predicts the first wave of mergers will be so-called takeunders of small banks by larger
regional banks looking for fill-in acquisitions. He expects the transformational deals to come
along in 2011. FDIC-assisted deals for failed or teetering institutions, such as TD Banks
agreement to purchase the troubled The South Financial Group (TSFG) in May are expected to continue
to dominate in the near-term as the industry isnt quite out of the woods when it comes to credit
costs just yet.
10 Potential Small Bank Takeout Targets
Michael Rose, vice president of equity research at Raymond James & Associates, thinks the pace of
economic recovery will be key to timing the next wave of bank M&A as management teams need to get
more comfortable with being able to value the troubled assets of targets.
Rose predicts consolidation over the next five to 10 years will bring the current tally of more
than 8,000 banks in the United States down to roughly 6,000 banks.
The most likely buyers will be the large and mid-size regional banks. The too big to fail bunch
mainly Bank of America (BAC), JPMorgan Chase (JPM), Citigroup (C) and Wells Fargo (WFC) could
find it tough to participate as they deal with their sprawling businesses
Page 10 of 26
and finregs impact. Although they could jump in under the right circumstances, as this article
later theorizes.
Foreign names like Canadas TD Bank, Barclays (BCS), Spains BBVA (BBVA) and Banco Santander (STD)
also constitute a force to be reckoned with as they are itching for a larger piece of the U.S.
consumer.
When it comes, I think its going to be something like an arms race so to speak. Once one of them
gets comfortable with doing these transactions, more banks will do them, Rose says. At some point
its not yet but when this M&A wave does start, youre going to see the stocks of these
companies rebuild in an M&A premium.
So what kind of deals will we see when the cycle kicks in?
The Southeast looks like it could be ripe for significant consolidation. Banks of all sizes sought
to capitalize on the massive residential housing wave there, and many of these banks are now
sitting on mortgages, residential construction, and land and development loans that soured since
the downturn.
That being said, the common historical view is that banks are sold, not bought, meaning that no
deal will get done unless a potential sellers management team is willing to entertain discussions.
For this article, we decided to look at three sizable regional banks in the South that could be
potential sellers over the next few years. All three have yet to pay back TARP funds and are still
reporting losses while struggling against overwhelming amounts of troubled commercial and
residential loans. Once we settled on who might end up on the block, the next logical step was to
make an educated guess about who might be the logical buyer. Here then are three potential hookups:
3. TD Bank and Synovus (SNV)
Headquarters: Cherry Hill, N.J./Portland, Maine and Columbus, Ga.
Combined Branches: approximately 1,300
Combined Deposits: approximately $120 billion
Combined Assets: $192 billion
Why This Merger: From a geographic standpoint, Synovus large presence in Georgia, South Carolina
as well as Florida, complements TD Bank s Maine-to-Florida strategy. Despite a recent large
capital raise, Synovus may also be a willing seller in the not so distant future either due to
board and/or management exhaustion as it works through its credit troubles.
Commentary: As the U.S. bank subsidiary to Toronto-Dominion Financial Corp. (TD), TD Bank has been
aggressively expanding south of the Canadian border for the last five years.
The march began in 2005 when it bought a majority stake in what was once Banknorth of Portland,
Maine. TD then bought out the rest of the bank in 2007. It followed that deal up with the
acquisition of Mid-Atlantic powerhouse Commerce Bank one year later. Most recently, TD Bank made an
entry into Florida through the April FDIC-assisted acquisitions of
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Riverside National Bank of Florida, First Federal Bank of North Florida and American First Bank, as
well as the previously mentioned agreement to acquire South Financial in May.
The Canadian bank is busy these days integrating the multitude of systems and operations that come
along with rapid acquisitions, however TD Banks CEO Bharat Masrani said at a recent investor
presentation that the bank isnt ruling out further acquisitions.
"[S]hould a compelling opportunity come up, either an FDIC-assisted transaction or one where the
risks are clearly understood and manageable, we would be willing to take a look provided our
current integration plans are finalized and well under way to execution, Masrani said.
Synovus has its fair share of commercial loan problems that it must continue to wade through.
Its a very challenging market and its been a very exhaustive process on Synovus management
team, Mogan Keegans Patten says. Over the long haul, the board will start to consider their
strategic alternatives, and its attractive capital cushion will appeal to buyers, especially to
buffer against further writedowns in its loan portfolio, he posits.
One other factor which may induce Synovus to sell longtime Chairman and CEO Richard Anthony took
a leave of absence for medical reasons in June. While the board named temporary replacements to
fill Anthonys position, if Anthony were to be replaced permanently, the board may decide that a
sale is the best alternative for shareholders.
For now though Synovus has bought itself time by completing a capital raise of over $1 billion in
May.
But Synovus fits the profile of a highly coveted acquisition candidate, Rose of Raymond James
says, noting that its one of the few banks with size and scale in the South, particularly in
Georgia and Florida, which will become more valuable over time.
2. JPMorgan Chase (JPM) and SunTrust Banks (STI)
Headquarters: New York and Atlanta
Combined Branches: 6,800
Combined Deposits: $1.04 trillion
Combined Assets: $2.2 trillion
Why This Merger: SunTrust has long been known as the JPMorgan of the South so why not make it
official? Seriously though, SunTrust provides across-the-board banking and investment services to
consumers and institutional customers, like, you guessed it, JPMorgan! The bank is also located in
an area where JPMorgan lacks significant presence, but may want to eventually gain access, given
the large amount of retirement assets in region as well as SunTrusts relationships with area
businesses.
Commentary: Lots of ifs, ands or buts come along with raising the prospect of this deal, but in
theory it does make sense. We know that JPMorgans CEO Jamie Dimon is looking outside of the U.S.
for future growth. We know that the banking titan is hitting the deposit cap limit,
Page 12 of 26
if it hasnt already surpassed it. We know it is still integrating Washington Mutual and Bear
Stearns and we know that banks are sold not bought.
But lets say in two to three years, SunTrusts management decides to test the waters.
If the price is right, Dimon is smart enough to figure a way to get the deal done.
I dont think you can discount JPMorgan, says Raymond James Rose, who does not cover JPMorgan,
adding that historically SunTrusts valuation included an M&A premium in the stock.
To be fair, JPMorgan wouldnt be the only bank looking at SunTrust. Other banks including foreign
banks (rumors surfaced that Barclays was sniffing around the bank this week), and perhaps even a
U.S. Bancorp (USB) may want a piece of the Southeast via SunTrust.
1. BB&T (BBT) and Regions Financial (RF)
Headquarters: Winston-Salem, N.C. and Birmingham, Ala.
Combined Branches: approximately 3,700
Combined Deposits:$202.4 billion
Combined Assets:$300.9 billion
Why This Merger: Again, another combination that has been posited in the past, but that doesnt
change the fact that BB&T could gain some major cost savings from the overlap of franchises, while
at the same time picking up complementary adjacent markets that would make the combined entity a
true Southern powerhouse.
Commentary: BB&T has long been friendly to M&A and states in its investor presentation materials
that it is looking for banks and thrifts with compatible cultures to enhance its banking
franchise. The North Carolina-based bank completed one of the largest FDIC-assisted deals of last
year by purchasing Colonial Bank.
Morgan Keegans Patten says BB&T is likely to play defense, given that banks headquartered outside
of the South are eager for real estate in that area of the country, such as TD Bank and Fifth Third
(FITB). Patten doesnt discount the possibility of any substantial in-market deal for BB&T.
Looking forward, my view is that [BB&T CEO] Kelly King and the rest of management see the banking
environment as a slower growth revenue scalable environment and the only way to out-earn peers is
by integrating strategic acquisitions with good cost saves, says Patten, who declined to comment
specifically on the potential for a BB&T/Regions transaction because Morgan Keegan is owned by
Regions.)
Regions has been named more than once as a potential seller, including in a recent research report
from Credit Suisse that listed the bank as one of its four names with the highest probability of
a takeout sometime next year.
Analysts say that the culture at Regions, which is a culmination of three large bank mergers
including the 2004 merger with Union Planters and the 2006 merger with AmSouth, never really meshed
well, which could give BB&T a leg up.
Page 13 of 26
With the economy off its 2008-2009 lows, BB&T CEO King has said that the bank will turn back to
unassisted deals, so who knows?
"[W]ere not opposed to looking at unassisted deals at this point, but we are remaining firm in
terms of having a conservative view with regard to the economics of it, King said in a recent
conference call.
Top
7. |
|
Business: Good deeds
WBC receives grant from TD foundation
July 11, 2010 Seacoastonline.com |
PORTSMOUTH TD Bank, through the TD Charitable Foundation, recently donated $10,000 to Womens
Business Center.
The funds will help the organization fund its educational programs and business counseling. The
continued development and implementation of a statewide educational program will help serve the
growing membership and changing needs of the small business community.
We are proud to be a grant recipient from the TD Charitable Foundation. We are working in a highly
competitive environment and we are honored to have our work and impact on the small business
community acknowledged through the financial support of the TD Charitable Foundation said WBC
Executive Director Christine Davis.
A commitment to active involvement in the local community is a vital element of the TD Bank
philosophy. TD Bank provides financial and other kinds of support to education, community, human
service, arts and health-related programs, many of which focus on improving the welfare of children
and families.
The WBC, is a nonprofit organization established in 1995 to support entrepreneurial women. For more
information, visit www.womenbiz.org. For more about the TD Charitable Foundation, including an
online grant application, visit www.TDBank.com.
Top
8. |
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Community Banks are Expanding
As big banks struggle, small banks open new branches
By Alyssa Sunkin
July 11, 2010 Times Herald-Record |
The financial downturn that brought down some of the nations largest banks has had an opposite
effect on small community banks in the mid-Hudson.
Community banks are finding now to be an opportune time to expand and compete head-on with large
banks still struggling to shake off toxic loans that helped lead to the Great Recession.
Page 14 of 26
The First National Bank of Jeffersonville opened branches in the Village of Bloomingburg and hamlet
of White Lake during the last six months.
Orange County Trust opened a branch in the Village of Goshen in December and one in the Town of
Newburgh in May. Plans are in the works to open a location in Fishkill in 2011.
Walden Savings Bank is in the midst of building a new branch in the Village of Florida, joining
locations in the hamlets of Circleville and Middle Hope that opened in the last three years.
It wasnt a gamble to expand, said Wayne Zanetti, CEO and president of Jeff Bank. I think large
banks, Bank of America, TD Bank, they are very vulnerable right now.
Most local banks never participated in the subprime lending practices that brought down larger
banks such as Washington Mutual and Wachovia. While community banks may have had to renegotiate
terms of loans, the financial strain did not compare to that felt by the larger institutions.
Recovery varies nationwide
That doesnt mean that all community banks across the nation are experiencing the same growth as
those in the Hudson Valley. Growth in community banks is linked to how quickly local markets
recover from the economic downturn, said Paul Merski, senior vice president and chief economist for
the Independent Community Bankers of America, which represents nearly 5,000 community banks
nationwide.
In other words, banks in the areas hardest hit by the collapse of the housing market will take
longer to recover. That said, many community banks are more stable than they ever were, courtesy of
attracting more accounts from people and small businesses.
Orange County fares well
From mid-2007 to mid-2009, Walden Savings Banks Orange County deposits increased 16 percent,
according to Federal Deposit Insurance Corp. data. Orange County Trusts jumped 20 percent.
Overall, deposits in Orange County increased less than 10 percent and most of that increase
stems from a change in the way KeyBank classifies its deposits.
Were doing well through the recession because people are re-evaluating where they are doing their
banking, said Terry Saturno, CEO and president of Orange County Trust. Many are coming back to
community banks.
Walden Savings Banks expansion into Florida marks the first time in five years that the village
will be home to an Orange County-based bank. Thats how long its been since Provident Bank
acquired the National Bank of Florida. The full-service branch with drive-up ATM is expected to
open in September, said Gill Mackay, executive vice president and project administrator.
Mackay said theres more growth to come.
At this point, there is no thought of stopping our expansion, he said.
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Page 15 of 26
9. |
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Wachovia ATMs Going Envelope Free
In advance of becoming Wells Fargo, the bank is modernizing its machines
By Jeff Blumenthal
July 12, 2010 Philadelphia Business Journal |
As a precursor to being rebranded as Wells Fargo & Co. next spring, all local Wachovia Bank ATMs
will be converted to modern envelope-free machines this fall.
The bank already swapped out 100 of the oldest southeastern Pennsylvania ATMs in June with the rest
being converted in September and October and South Jersey recently completing conversion of all of
its ATMs to envelope-free.
Wachovia has 283 ATMs in southeastern Pennsylvania alone, of which 212 accept deposits. The bank
said it will add 35 to 40 more ATMs in Pennsylvania and Delaware as part of the process.
We identified the sites that could benefit from additional ATMs based on transactional volume,
Wachovia spokeswoman Barbara Nate said.
San Francisco-based Wells Fargo acquired Charlotte, N.C.-based Wachovia Corp., the largest bank in
the Delaware Valley based on deposits, in January of 2009. About 6,500 of the combined companys
roughly 12,600 ATMs have envelope free machines all of which are Wells Fargo sites as Wachovia
never introduced the technology.
Customers can stack up to 30 checks at a time in the new ATMs, which record an e-image for
transmission to a processing site. Customers can also place up to 50 bills at a time in the
machines and it gives immediate credit for cash.
The machines also have a later cut off to get the deposit posted on that day. On the older
machines, customers needed to make a deposit by 4 p.m. to have it considered as posted that day.
Now they will have until 8 p.m.
The new ATMs will have a memory when it comes to individual customer transactions. It will give
three quick options based on the most common transaction that customer has made. For instance, if a
customer frequently withdrawals $50 at a time, that would be one of the three options.
Nate said there are six language options, receipt preferences and stamp dispensers.
One recent green enhancement is the ability to have a receipt e-mailed to either a customers
on-line banking mailbox or e-mail address. That feature will not be available locally until
Wachovia is rebranded into Wells Fargo next year which will occur in the first quarter for South
Jersey and most likely early second quarter for Pennsylvania.
As more customers have become environmentally conscious and tech savvy in recent years,
envelope-free ATMs have become more common at banks. Some of Wells Fargos chief local competitors
have already unveiled the technology.
PNC Bank said it has offered envelope-free deposits since 1992 and check images on ATM receipts
since 2006. Spokesman Patrick McMahon said a popular feature started in 2008 allows for
personalized transactions where customers can enter preferences regarding
Page 16 of 26
language, amount of withdrawal, which account and whether the customer wants a receipt with five
keystrokes. PNC said it has more than 800 local ATMs but most are located in Wawa convenience
stores. While those offer free withdrawals, customers cannot deposit into those.
Bank of America piloted its deposit image ATMs in 2005 and rolled them out two years later. By the
end of last year, all 138 local Bank of America deposit-taking ATMs were updated with the latest
technology. Spokesman T.J. Crawford said customers can scan up to 10 checks at once and 40 bills at
a time and communicate using seven different languages.
TD Bank began rolling out envelope-free ATMs last fall in New England and will gradually replace
all of its older machines with the new ones within a three year span. Currently, only seven of 145
local ATMs are envelope-free. Spokeswoman Rebecca Acevedo said all new locations will receive the
updated machines.
Citizens Bank, Sovereign Bank and First Niagara Bank do not yet have envelope-free ATMs
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10. |
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Canadian Economy Continues Strong Recovery
By Rob Gillies
July 9, 2010 Associated Press [Similar article in St. Petersburg Times (FL), The Ledger
(FL), The Buffalo News (NY).] |
TORONTO Canadas economys continues to outshine other advanced countries as the unemployment
rate unexpectedly dipped below 8 percent for the first time in a year and half.
Statistics Canada said Friday the country added a higher-than-expected 93,000 jobs in June and said
the unemployment rate dropped to 7.9 percent.
Economists had expected a more modest 15,000 to 20,000 job increase and that the rate would remain
at 8.1 percent. Its the second biggest gain ever recorded by the agency in terms of the number of
jobs and comes after Canada added a record 108,700 jobs in April and 24,700 in May.
The government said the new jobs were evenly split between full-time and part-time positions.
In less than a year Canada has made up nearly all the jobs lost during the recession.
Weve replaced those jobs already. It is quite something how we are rebounding, said Dawn
Desjardins, assistant chief economist at Royal Bank.
Desjardins said low interest rates, a stable banking system and the governments comparative strong
fiscal position has spurred the recovery. Although its deficit is currently at a record high, the
International Monetary Fund expects Canada to be the only one of the seven major industrialized
democracies to return to surplus by 2015.
Canada entered the global downturn in the last three months of 2008 and withstood the global
economic crisis better than most developed countries. There was no mortgage
Page 17 of 26
meltdown or subprime lending crisis in Canada where the financial sector is dominated by five large
banks.
Last month, Canada became the first Group of Seven nation to raise interest rates since the crisis.
Economists said the strong jobs report provides further impetus for the central bank to raise rates
again on June 20.
Given the strength of the banking sector and the domestic economy once the financial crisis began
to dissipate, confidence among employers was very quick to respond whereas in the U.S. there are
signs that confidence remains quite shaky, said Derek Burleton, Deputy Chief Economist at TD Bank.
Top
INDUSTRY NEWS
1. |
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Bank of America Trades Hid Billions in Debt
In letter to regulators, bank says 6 trades led to unintentional accounting
By Sam Mamudi
July 10, 2010 Wall Street Journal |
NEW YORK (MarketWatch) Bank of America Corp. has told federal regulators that it made six trades
from 2007 to early 2009 that led to it hiding billions of dollars of debt, according to a media
report Saturday.
Bank of America (BAC 15.11, +0.25, +1.68%) made the admission in an April letter to the Securities
and Exchange Commission, The Wall Street Journal reported in its online edition.
The bank had acknowledged in its last quarterly report that its accounting for the deals, at
quarter-ends from 2007 to 2009, was incorrect, added the Journal. The letter has been posted as a
regulatory filing.
The trades might be examples, suggested the Journal, of Wall Streets practice of end-of-quarter
window dressing, in which banks temporarily shed debt before reporting their finances.
The practice of window dressing suggests that banks are usually carrying more debt than is commonly
realized.
The Journal said that while window dressing itself isnt illegal, intentionally hiding debt is
against regulations. The paper said, though, that B. of A. claims its incorrect accounting wasnt
intentional, adding that the SEC hasnt taken any action against B. of A. over the matter.
Bank of America said that the six trades were incorrectly accounted because it classified
shorter-term financing deals, known as repos, as sales when they should have been logged as debt.
This means the bank was taking assets off its balance sheet, giving the appearance of lower
leverage, said the Journal.
Page 18 of 26
The paper said, however, that B. of A. claimed the accounting errors were immaterial to its
financial results and didnt affect its earnings. The bank also said it hasnt made any such trades
since early last year, and blamed the errors on poor internal controls.
The six trades amounted to as much as $10.7 billion in repos, said the paper. They were what are
known as dollar roll trades, which see mortgage-backed securities sent to a trading partner with a
simultaneous agreement to buy back similar securities soon after.
According to the Journal, B. of A. said the trades were designed in a way that the securities
coming back would be similar to but not substantially the same as those sent out. But, said the
paper, the securities that came back were substantially the same, for instance they were the same
type with the same guarantor and coupon.
The paper also noted that B. of A.s trades are similar to what a bankruptcy-court examiner said
Lehman Brothers Holdings Inc. did to make its finances look healthier Lehman used a repo
strategy called Repo 105 to shift $50 billion off its books.
The Journal added that an SEC review on repo practices may be released this coming week. The agency
in March sent letters to large financial companies asking about their repo accounting. An SEC
official said in May that there was no evidence of widespread inappropriate practices. The official
added, however, that the SEC had asked several firms to provide more disclosure about their
activities in the area.
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2. |
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Wells Fargo Ends Free Checking Before New Bank Rules
By Dakin Campbell
July 09, 2010 BusinessWeek |
(Bloomberg) Wells Fargo & Co., the U.S. bank with the largest branch network, eliminated free
checking accounts for new customers as firms prepare for stricter consumer-protection measures.
New basic checking accounts carry a $5 monthly fee as of July 1, said Julia Tunis Bernard, a
spokeswoman for the San Francisco-based bank. Wells Fargo also established minimum deposit
requirements for waiving the fee, she said.
Were no longer offering free checking as a new product or new account, Bernard said in an
interview yesterday. In addition to evaluating best practices, the lender considers industry
trends and changes in the economic and regulatory environment, she said.
Chief Executive Officer John Stumpf joins other banks in replacing lost fee revenue as Congress
nears creation of a consumer protection agency and the Federal Reserve implements rules restricting
overdraft fees. Bank of America Corp., the largest U.S. bank by assets and deposits, is developing
a tiered structure of charging for checking accounts, the Wall Street Journal reported last month.
New regulations may cut as much as 15 percent of the revenue that banks get from checking accounts,
more than half of which are already unprofitable, according to Celent, a Boston- based research
firm. Lenders traditionally cover the cost of free checking with overdraft or automated teller
machine fees.
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Overdraft fees are big money to most retail banking operations, Celent analyst Bart Narter said
in the May report. It is the engine that pulls along free checking.
Avoiding the Fee
To avoid the monthly fee, new Wells Fargo customers will have to maintain a $1,500 minimum average
balance or receive a direct deposit of at least $250, Bernard said. The new rules, posted on the
companys website, dont affect existing customers.
Wells Fargo had offered free checking in every state except California, Bernard said. It made up a
small percentage of new account volume because most customers bundle checking with other services,
she said. Basic checking accounts in California had required a minimum balance of $1,000 or a $100
monthly direct deposit.
The financial-reform bill was passed by the House of Representatives last month and awaits Senate
approval before being sent to President Barack Obama.
The lender reported $1.3 billion in service charges on deposit accounts in the first quarter, down
4 percent from the same period last year, according to an April 21 statement. Consumer checking
accounts grew 7 percent in the period ended March from a year earlier.
Wells Fargo has 6,600 retail branches and 2,200 mortgage offices, the most of any U.S. bank,
according to a July 7 statement. The new rules wont apply to Wachovia Corp. branch offices until
the branches are converted to Wells Fargo, Bernard said. Wells Fargo bought Wachovia for $12.7
billion in 2008 and has said the merger will be finished by next year.
With assistance from Bradley Keoun in New York. Editors: Dan Reichl, David Scheer.
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Small-Business Lending Fund Finds Unexpected Support in Senate
By Cheyenne Hopkins
July 12, 2010 American Banker |
WASHINGTON A drive to create a $30 billion small-business lending fund once thought headed to
a quick death in the Senate may now be on its way toward swift passage.
The bill has already passed a key vote in the Senate, and Democratic leaders have taken steps to
try and block a host of amendments from being added to the measure. The legislation is likely to be
taken up for final approval this week, where industry representatives said they expect it to pass.
Observers attribute the surprising turnaround to the bills relatively low profile regulatory
reform has drawn most of the attention in recent weeks and a connection to a politically popular
effort to help small businesses.
I just think theres a very strong need to help small-business expansion on every front possible,
said Gene Sperling, counselor to the Treasury secretary. As people see more that this is a program
completely outside of Tarp and thats just for small banks whose lending tends to be the small
businesses ... its hard to object to.
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Outside observers agreed.
Everybody is sympathetic to small businesses, said Mark Calabria, director of financial
regulations studies at the Cato Institute and a former staffer for Sen. Richard Shelby, R-Ala.
Its one of those constituencies that everyone cares about and it fits into the job-creation
mantra. And Im sure every senator has heard someone say they cant get a loan for their small
business.
Senate Republicans had been expected to rally against the measure, which would create a $30 billion
fund that community banks could tap as capital to increase lending to small businesses.
In the House, GOP members had vigorously opposed the bill, branding it another Troubled Asset
Relief Program. The House passed the bill June 17 by a 241-to-182 vote, with only three Republicans
voting for it.
Senate Republicans had been expected to follow suit, but instead the bill easily cleared a June 29
procedural vote, 66 to 33, that limited debate on the legislation.
Adding further momentum, Senate Majority Leader Harry Reid filed an amendment tree on the bill, a
controversial procedural maneuver designed to block senators from offering amendments and speeding
up the bills passage.
To combat criticism that it is just another Tarp, the bill would attempt to push lenders to use
money from the fund to boost small-business lending. Banks would see their dividend on the capital
they receive drop as they increased loans to small businesses. For example, if such lending rose by
more than 10% during the year, the dividend rate would drop from an initial 5% rate to 1%. Other
restrictions of Tarp, including executive compensation limits and warrants, are not part of the new
program.
Jim MacPhee, the chief executive of the $81.2 million-asset Kalamazoo County State Bank in
Schoolcraft, Mich., said he does not think the Senate will accept the argument that this is another
Tarp. I think this bill will pass, he said. My gut feeling is they know its the right thing.
They know its not Tarp. This bill is not about injecting capital into failed banks. This bill is
about getting lending started at the ground level.
Also helping the bill are additional provisions that would give tax relief to small businesses and
provide federal funds to states with capital access programs, and other measures expected to be
added that would extend the Small Business Administrations 7(a) and 504 programs. Ultimately
people are going to be voting on an overall package thats going to include tax relief for small
business, SBA expansion, as well as these two lending initiatives, Sperling said.
Michael Stevens, senior vice president of regulatory policy at the Conference of State Bank
Supervisors, agreed.
At its core, its an economic issue. So if there is a program that can be adopted that is not
costly ... that can be used to stimulate the economy and generate jobs, then that could generate
everyones interest as they are thinking of going home and running for re-election, he said.
The SBA provisions will also help the legislation, many said.
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I have to believe that everyone is concerned the SBA programs the 7(a) and 504 programs have
ground to a standstill, said Jane Butler, executive vice president of lender relations at the
National Association of Government Guaranteed Lenders. And its a shame that it takes having the
Recovery Act benefits expire for people to recognize their importance to the economic recovery
effort.
Some said the bill was helped by a lack of attention during the regulatory reform debate.
With so much going on in D.C., the small-business lending fund has flown under the radar, which
has been to its benefit, said Jon Winick, the president of Clark Street Capital. Its not been
discussed in great detail on the Sunday-morning talk shows and the blogosphere. ... It has not yet
become a political issue which has allowed this initiative to proceed without much opposition.
However, if one senator decides to make this a political issue and characterize it as a Tarp 2.0,
it could run into resistance.
It is also helped by the active support of community bankers, who remain more politically popular
than large institutions.
Community banks are the ones that need a little help, a little financing to help them, not on
their bottom lines in terms of their stability, because they are quite stable, Sen. Mary Landrieu,
the chairman of the Small Business and Entrepreneurship Committee, said on the Senate floor two
weeks ago. I am extremely proud of our small banks around this country that did not go belly up.
They are strong. They have money to lend. We want to give them some additional funding to lend.
The only potential threat to the bills passage may be an amendment pushed by credit unions to
raise their small-business lending limits. If such a measure were added to the bill, community
bankers would likely pull their support for the bill.
Small banks would not support the small-business lending bill if it, in fact, opened up the
lending limit for tax-exempt credit unions, said Paul Merski, senior vice president and chief
economist at the Independent Community Bankers of America.
Its unclear if the measure will be included, but sources said Friday it was supported by the
Treasury Department. Merski said bankers were fighting to keep it out of the bill. Its a serious
threat to the legislation because the broad financial sector will peal off their support of the
package if it gets added, he said.
Also unclear is whether all six Republicans who voted for cloture on June 29 will continue to
support the bill. Merski warned that some senators may object to Reids procedural maneuver to
limit amendments to the legislation. It may be complicated by senators who wanted to amend the
bill that now will find that difficult, he said.
Indeed, although Sen. Olympia Snowe, R-Maine, voted for cloture, her office indicated last week
that she had concerns with parts of the bill, particularly the small-business lending fund.
Having been calling for action on a bill since February, of course we supported getting on the
bill to begin debate in the Senate, said Julie Lawless, a spokesman for Snowe. Sen. Snowe
believes the substitute amendment contains many of her long-standing small-business tax, lending,
contracting, exporting and regulatory reform priorities, and is pleased
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that the majority leader has decided to consider this bill on the Senate floor. However, she
continues to have deep reservations about the Treasury lending facility title to the bill.
Another outstanding concern is whether even if Congress enacts the bill community banks will
use the new program.
Winick said it could be valuable for bankers needing to clean up their balance sheet to free
capital for lending. Theres no question that the community banks we talk with are incredibly
skeptical of government help, he said. Its likely that this program will be used primarily by
institutions that feel like they need it. For institutions that dont need capital, even though
this is cheap capital, they may be reluctant to take it.
Stevens said participation would vary according to geographic recovery and loan demand. The way
its structured, you are not going to participate in the program unless you feel its going to
succeed and you have the loan demand needed, he said.
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Reform Bills Exec Pay Mandates May Help Banks Rehab Image
By Heather Landy
July 12, 2010 American Banker |
Bankers may never be considered Boy Scouts on compensation, but in terms of the executive pay
provisions in the financial reform bill, they certainly are prepared.
Say on pay? Check. Any recipient of the Troubled Asset Relief Program already is familiar with the
practice, which allows shareholders to cast nonbinding, up-or-down votes on executive pay packages.
Under the Dodd-Frank bill before Congress, all public companies must adopt say on pay.
Independent compensation committees? Check. Like most big public companies, banks generally already
comply with corporate governance standards advocating that only independent directors serve on
board compensation committees.
Clawback measures? Descriptions of pay-for-performance plans? Regulatory monitoring for unsafe or
unsound compensation practices? Check, check, check.
Between the strings attached to Tarp, the voluntary reforms adopted by banks in response to the
crisis and the Federal Reserves new guidance on pay, banks are poised to meet the
compensation-related requirements of the proposed legislation with little additional effort.
As a substantive matter, theres really not going to be a lot new in terms of what banks need to
do, said Lawrence Cagney, the chairman of the executive compensation and employee benefits group
at the law firm Debevoise & Plimpton LLP.
Whats more, in the areas where extra legwork will be necessary for example, calculating the
median compensation for all employees below the level of chief executive and comparing that figure
to the CEOs pay banks, if not exactly best in class, should come out looking relatively good
next to companies in other kinds of industries.
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Think of big-box retailers that employ throngs of hourly workers, or manufacturers with plants
strategically placed in cheap-labor markets.
Few of those would have the vast numbers of highly paid people below the rank of CEO, as big banks
do, to help bump up the median against which the CEO will be compared.
Its entirely possible, and in some of these high-profile banks very likely, that the most highly
compensated individuals are not the CEOs, said Nora McCord, a managing director at Steven Hall &
Partners, an executive compensation consulting firm in New York.
It might be a number of people that are over, and in some instances over by a significant amount.
Meanwhile, for all the flak banks have taken on the pay front, theyve made an effort to tamp down
pay at senior, disclosable levels, and I think that will probably help them as well to avoid
offending popular sensibilities about compensation.
But lest bank CEOs get too comfortable, Sarah Anderson, an executive pay analyst with the Institute
for Policy Studies, a progressive Washington think tank, points out that there are about half a
million bank tellers averaging less than $25,000 a year, while CEOs of big banks still earn
millions.
When you have such extreme gaps between people on the bottom and people on top, it can hurt morale
at companies, which can turn into problems with productivity, Anderson said.
And we have broader concerns about the impact such inequality has on the health of society.
Its impossible to predict exactly how banks will stack up versus other industries on this measure
until the Securities and Exchange Commission comes up with more specific guidelines for
interpreting the rule. Will compensation figures include bonuses? Health benefits? Will non-U.S.
workers figure into the median data?
As with many aspects of the proposed legislation, it will be left up to regulators to figure out
the details.
But some pay provisions in the bill are quite specific.
For instance, on say on pay, six months after the bills presumed enactment, public companies must
arrange to hold say-on-pay votes at their next annual meeting.
At the same meeting, shareholders also must be asked whether they prefer future say-on-pay votes to
be held yearly, once every two years or once every three years.
Moreover, the time frame question must be revisited at least once every six years, in case
shareholders change their minds on how frequently they want the option to cast votes on pay
packages.
A recent Towers Watson survey found that only 12% of public companies feel very well prepared for
the say-on-pay mandate, giving Tarp alumni a head start on their nonbank peers.
Just as they were under Tarp, the say-on-pay votes would be only advisory in nature, with boards
having the option of ignoring shareholder sentiments entirely.
Page 24 of 26
However, there is another provision in the bill that would give the say-on-pay measure a few extra
teeth.
Under the legislation, Congress would grant explicit authority to the SEC to adopt rules providing
shareholders with access to company proxies to nominate directors.
This would make it easier, and cheaper, for investors to wage proxy campaigns and replace directors
perhaps giving boards, including those of banks, an extra incentive to take their shareholders
say-on-pay votes to heart.
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