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BEDMINSTER, NJ -- (Marketwired) -- 03/19/15 -- Peapack-Gladstone Financial Corporation (NASDAQ: PGC), parent company of Peapack-Gladstone Bank, announced today that it has entered into a definitive agreement to acquire Morristown, NJ-based Wealth Management Consultants (NJ), LLC (WMC).
Doug Kennedy, PGBs President and CEO commented, We are excited that WMC has decided to join Peapack-Gladstone Bank and become a foundational part of our private wealth management business. WMCs advice-led business model marries perfectly with Peapack-Gladstone Banks vision and commitment to providing objective, relationship-driven solutions to help individuals build, protect and transition their wealth to future generations. Joining forces was a natural outcome.
Established in 1998 by Thomas J. Ross Jr., WMC provides objective, comprehensive, financial, investment and tax planning advice to ultra-high net worth individuals. These services include financial advice, estate and income tax planning, compensation and benefit planning and investment advisory services. WMCs clients control over $2 billion of assets with approximately $450 million of assets under advisement through a sophisticated open architecture platform through Callan Associates, a nationally recognized institutional investment consultant.
Tom Ross, President of WMC stated, We had no plans to become part of a larger financial services firm, but I am truly excited to have found a professional organization that shares our vision of quality advice and exceptional client service. I have admired Peapack-Gladstone Bank from afar for many years and have also known and respected both Doug Kennedy and John Babcock professionally for many years. I have complete confidence that combining our two practices will create a powerful, best-in-class, client-centric financial advisory organization.
WMC has particular expertise in advising senior corporate executive clients on a variety of complex retirement plan, stock option, deferred compensation and employment contract issues. Prior to establishing WMC, Mr. Ross was a partner at Coopers amp; Lybrand where he led their Personal Financial Services (PFS) practice in the New York metropolitan area, served on the Firms National PFS steering committee and founded their Registered Investment Advisory subsidiary.
John Babcock, President of Private Wealth Management at PGB stated, In addition to all of the obvious synergies to be realized and the benefits that our respective clients will enjoy as a result of combining our two firms, we are particularly excited by WMCs alliance with Callan Associates, Inc.; specifically WMCs access to Callans Investment Advisory Groups (IAG) outstanding due diligence, research, and analytical resources and their platform of best-in-class separate account managers across all asset classes and style universes.
With a market value of over $2.99 billion under management and administration at December 31, 2014, the wealth management division of Peapack-Gladstone Bank is one of the largest New Jersey-based asset managers, with wealth management offices in Bedminster, Morristown, Princeton and Teaneck, as well as a trust office in Greenville, Delaware. The WMC transaction solidifies PGB as a leader in wealth management and positions the organization to become the premier client-centric financial advisory organization in the New York metropolitan area.
About Peapack-Gladstone Financial Corporation and Peapack-Gladstone Bank
Peapack-Gladstone Financial Corporation is a New Jersey bank holding company with total assets of $2.70 billion as of December 31, 2014. Founded in 1921, Peapack-Gladstone Bank is a commercial bank that provides innovative private banking solutions to businesses, non-profits and consumers, which help them to establish, maintain and expand their legacy. Through its private banking locations, its wealth management division, and its branch network and online platforms, Peapack-Gladstone Bank offers an unparalleled commitment to client service.
The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about managements confidence and strategies and managements expectations about new and existing programs and products, investments, relationships, opportunities and market conditions. These statements may be identified by such forward-looking terminology as expect, look, believe, anticipate, may, or similar statements or variations of such terms. Actual results may differ materially from such forward-looking statements. Factors that may cause results to differ materially from such forward-looking statements include, but are not limited to:
- inability to realize expected revenue synergies from the WMC acquisition in the amounts or the timeframe anticipated;
- inability to retain customers and employees of WMC;
- inability to successfully grow our business and implement our strategic plan, including an inability to generate revenues to offset the increased personnel and other costs related to the strategic plan;
- inability to manage our growth;
- a continued or unexpected decline in the economy, in particular in our New Jersey and New York market areas;
- declines in our net interest margin caused by the low interest rate and highly competitive market;
- declines in value in our investment portfolio;
- higher than expected increases in our allowance for loan losses;
- higher than expected increases in loan losses or in the level of nonperforming loans;
- unexpected changes in interest rates;
- a continued or unexpected decline in real estate values within our market areas;
- legislative and regulatory actions (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Basel III and related regulations) subject us to additional regulatory oversight which may result in increased compliance costs;
- successful cyber attacks against our IT infrastructure and that of our IT providers;
- higher than expected FDIC insurance premiums;
- lack of liquidity to fund our various cash obligations;
- reduction in our lower-cost funding sources;
- our inability to adapt to technological changes;
- claims and litigation pertaining to fiduciary responsibility, environmental laws and other matters; and
- other unexpected material adverse changes in our operations or earnings.
A discussion of these and other factors that could affect our results is included in our SEC filings, including our Annual Report on form 10-K for the year ended December 31, 2014. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Corporations expectations.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
Jeffrey J. Carfora
SEVP and CFO
Peapack-Gladstone Financial Corporation
500 Hills Drive, Suite 300
Bedminster, NJ 07921
Source: Peapack-Gladstone Financial Corp
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A city-funded financial review of a downtown condominium project supports St. Cloud selling the site for $1.
Developer Makenda LLC wants to build 46 loft units at 523 St. Germain St. The site is a parking lot owned by the St. Cloud Economic Development Authority.
Makenda has asked to purchase the property for $1 because of the cost to redevelop the site. The city purchased the site for $97,500 in 1992. A building there was demolished shortly after at a cost of $103,700. The lot has sat empty ever since.
The estimated market value of the 10,560-square-foot property is $158,000.
The citys financial advisory company, Ehlers amp; Associates, is recommending the city sell the property for $1. The purchase price is necessary to make the project financially feasible, according to documents from the company.
The analysis from Ehlers amp; Associates indicates the $10 million project could generate about $131,000 in property taxes each year.
The development contract says Makenda must start construction by Oct. 1 and finish it by the end of 2016.
The condos would range in price from $165,000 to $280,000. The project will include two studios, 37 one-bedrooms and seven two-bedrooms.
The lofts would have open floor plans and 11-foot-high ceilings. A rooftop terrace for residents is planned. The building will be six stories.
There would be 19 parking stalls on the main floor, along with a community room and fitness center. Residents would also be able to lease parking spots in the planned parking ramp next to Rivers Edge Convention Center.
The Economic Development Authority will hold a public hearing to discuss the property sale at 4:30 pm Tuesday at City Hall.
Follow Kari Petrie on Twitter @karipetrie or contact her at 255-8765.
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"One day I told my bank manager, 'there's nothing but red numbers on my accounts,'" Kiener said from the 93 square-meter apartment that he recently sold to limit his financial damage. "Everything I earned went straight into the debt service."
Hundreds of thousands of Austrian borrowers like Kiener have been smacked by both currency and investment losses on the same mortgage. Touted by advisers starting in the mid-1990s as a way to lower borrowing costs, foreign-denominated loans and funds have caused them to increase since the 2008 financial crisis.
About 150,000 home loans in Swiss francs and Japanese yen are still outstanding, or about 17 percent of all household mortgages, and most of them are paired with funds investing in everything from stocks to life insurance policies.
"It's not a glorious chapter in the history of the Austrian banking industry," said Helmut Ettl, co-president of the country's bank regulator, Finanzmarktaufsicht.Swiss Mortgages
The Swiss currency traded at 1.55 per euro on average between 2000 and 2008, the period when most of the mortgages were taken out, according to data compiled by Bloomberg. Investors seeking a safe haven sent the franc surging, especially after the collapse of Lehman Brothers Holdings Co. in 2008.
For several years, the Swiss National Bank artificially held the rate at 1.20 francs. Since policy makers set the franc free on Jan. 15, it has soared and now trades at 1.05 against the euro.
The value of a 100,000-euro loan taken at 1.55 francs jumps to 148,000 euros at the current exchange rate.
Three out of four of the roughly 29 billion euros of foreign currency loans require borrowers to pay only the interest to the lender. Homeowners put the principal, which is due in full on maturity, in a fund.Property Stocks
Borrowers who relied on life insurance policies to repay their mortgages are mostly on track to meet the target value on maturity, according to Thomas Uher, the head of the domestic unit of Erste Group Bank AG, Austria's largest bank. But the riskier vehicles, such as mutual funds and even single stocks, have missed their goals of annual returns of 6 percent to 7 percent over the lifetime of the mortgage, particularly in the seven years after the financial crisis.
Single-stock vehicles often invested in Austrian real estate companies like Immofinanz AG or Meinl European Land. The shares of Meinl European Land, now Atrium European Real Estate Ltd., peaked at 21.33 euros in June 2007, before plunging as much as 94 percent by March 2009. The shares are now trading at 4.34 euros, 80 percent below the all-time high.
Shares of Immofinanz plummeted as much as 98 percent between April 2007 and November 2008 and are still 73 percent below the peak.Loan Increases
Kiener, the salesman, had borrowed 214,000 francs to get the 131,000 euros he needed to buy his apartment. Under pressure from his bank to reduce risk in 2010, he sold his mutual fund at a loss and changed to monthly repayments, which rose to as much as 850 euros per month -- 48 percent more than his initial rate.
His mortgage has shrunk to about 174,000 francs. But at today's rate, that equals 165,000 euros, or about 34,000 euros more than what he originally borrowed.
The difference between the projected value of the Austrian borrowers investments and their franc mortgages at maturity was 5.4 billion euros in mid-2011, according to an Austrian central bank estimate.
The central bank is surveying banks for a new estimate now and expects the gap to have narrowed, spokesman Christian Gutlederer said. That's because markets recovered since 2011, the year when the euro crisis peaked, and because banks have encouraged lenders to switch out of the funds.
"If the funding gap doesn't close, many borrowers are in the danger getting their house auctioned off," said Peter Kolba, head of the legal department at consumer protection agency VKI. "People are very much in despair."Monetary Incentives
The Swiss National Bank, which investigated Austria's mortgage practices, concluded in a 2008 research paper that the franc-lending was pushed by financial advisers, who received sales commissions on the products used as repayment vehicles for the loans.
"These may provide the advisers with monetary incentives to prefer pushing Swiss franc loans," the economists led by Christian Beer said in the SNB's working paper.
Johann Massenbauer, a veteran of the Creditanstalt bank who set up his independent financial advisory in 1993, was a pioneer that helped turn Austrian home buyers into currency speculators.
Massenbauer took a yen-denominated 5.5 million schilling ($437,600) loan, the first of its kind for an Austrian retail customer, on Nov. 23, 1993. Three months later, his debt had swelled by 10 percent as the Japanese currency rose against the schilling.Wild Ride
That experience didn't stop Massenbauer from praising foreign-currency loans as a good option for home borrowers in an article in Gewinn, the country's most widely read retail investor magazine. The article helped spark interest in the mortgages throughout Austria.
The mortgage worked out for Massenbauer. By the time he fully repaid his loan in 2003, a year after the schilling was replaced by the euro, he'd gained 60,000 euros. Over the life of the loan, he converted it into different currencies several times to reduce his payments.
"It was a wild ride," Massenbauer said in his office in downtown Vienna.
He said banks promoted foreign currency loans because they could charge higher fees and interest-rate spreads on them. Massenbauer didn't anticipate that these loans for sophisticated investors would become a mass-market product.
"I wanted it to be a product for the high society, for people who, if properly advised, understood it and were mentally and economically prepared for it," he said.Franc Loans
Regulators, even as they issued warnings against foreign currency lending, did little to restrict it. By the 2000s, mortgages in currencies like the yen and franc became the standard in Austria, luring borrowers with lower interest rates. Franc loans to households peaked at 54.7 billion francs ($55.8 billion), equivalent to 13 percent of the Austrian economy, in December 2008.
That's when the central bank hit the emergency brake, ending the provision of foreign currency loans in Austria. The global credit crunch made Austria's exposure to them a threat to the entire banking sector, as the strong franc increased the risk of borrowers defaulting.
Austrian franc borrowers did catch one break. Unlike Hungary and Croatia, where the franc mortgage boom coincided with a real estate bubble that burst, Austrian prices started to rise after the financial crisis as investors bought real estate to protect their wealth.
That has helped prevent defaults on franc mortgages. The rate isn't significantly higher than on euro-denominated mortgages, according to the FMA.Great Profit
Today, Austria is chipping away at a mountain of foreign currency debt. Almost 60 percent of foreign currency mortgages, which are almost entirely franc-denominated, mature in more than 10 years from now.
The government has ruled out helping borrowers like Kiener with tax benefits or forcing banks to absorb losses, as happened in Hungary. Instead, officials have appealed to banks and borrowers to find their own compromises.
Consumer protection agencies say Austrian banks, which were rescued during the credit meltdown, should be liable for bad advice and credit terms that put borrowers at a disadvantage.Paralyzing News
"The deals were totally out of balance," said VKI's Kolba. While the banks "made a great profit and safeguarded themselves, the clients were totally unsecured."
Austrian banks made the franc loans in good faith at the time, according to Franz Rudorfer, head of the banking industry chapter of Austria's Chamber of Commerce. Lenders are now working with borrowers to find solutions, including converting loans into euros or switching out of repayment vehicles, he said.
A few days before the central bank let the franc rise in January, Kiener said he had thought about converting his loan into euros and then repay it with money from selling the apartment.
"At least I would have come out of the whole thing debt-free," he said. "When I heard the news, I was paralyzed for 24 hours."
Kiener agreed to sell his property for about 30,000 euros more than the 120,000 euros he'd bought it for in a deal he expects to complete next month. Even after the sale, he will still owe about 15,000 euros on his mortgage.
Kiener said his lender denied his request to forgive the remainder of his loan.
"We don't want to be helped with tax money, all we want is that the banks also share the burden," he said.
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Addressing reporters in Dar es Salaam, Transport Minister Samuel Sitta said that President Jakaya Kikwete will inaugurate the project. This railway line will run from Mpiji in Dar es Salaam to Kigoma through Tabora, Mwanza, Isaka to Rusumo, Kaliua-Mpanda-Karema and Uvinza-Musongati in Burundi, he said.
The Minister pointed out that Reli Assets Holding Company (RAHCO) has contracted Rothschild, one of the Words largest financial advisory groups based in the US, to mobilise resources for the project.
Moreover, Mr Sitta noted that implementation of other two railway projects will also have their foundation stones laid this year.
These projects include Southern route, which will run from Mtwara to Mbambabay via Songea and Mchuchuma to Liganga and the Northern route running from Tanga- Arusha-Musoma, also connecting Engaruka Soda Ash Mines and Minjingu Phosphates.