After housing prices have been trending higher, it was a bit of a surprising to see construction data pointing to a slowdown. Investors in banks like Wells Fargo (NYSE: WFC ) are betting on the continued strength of the housing and construction market.
Despite the slowdown in overall construction spending, a deeper dive into the numbers reveals the impact of�government�spending trends on the numbers.
In the following video, Motley Fool banking analysts Matt Koppenheffer and David Hanson remind investors to tune out the monthly noise and focus on annual trends and how banks are affected.�
Wells Fargo's dedication to solid, conservative banking helped it vastly outperform its peers during the financial meltdown. Today, Wells is the same great bank as ever, but with its stock trading at a premium to the rest of the industry, is there still room to buy, or is it time to cash in your gains? To help figure out whether Wells Fargo is a buy today, I invite you to download our premium research report from one of The Motley Fool's top banking analysts. Click here now for instant access to this in-depth take on Wells Fargo.
Top Diversified Bank Stocks To Watch For 2015: Societe Generale (GLE)
Societe Generale SA is a financial services company. The Company offers advisory and other services to individual customers, companies and institutions. The Company operates in five divisions: French Networks, International Retail Banking, Corporate and Investment Banking, Specialised Financial Services and Insurance, and Private Banking, Global Investment Management and Services. It operates Retail Banking in France under the Societe Generale, Credit du Nord and Boursorama brands. Its International Retail Banking is present in Central and Eastern Europe, Russia, the Mediterranean Basin, Sub-Saharan Africa, Asia and in the French Overseas territories. Private Banking, Global Investment Management and Services consist of four activities: Private Banking, Asset Management, Societe Generale Securities Services and Brokers. Advisors' Opinion:- [By Namitha Jagadeesh]
Societe Generale SA (GLE), France�� second-largest bank, advanced 1.4 percent to 31.03 euros as Goldman Sachs Group Inc. analysts recommended investors buy the shares, citing the firm�� improved funding levels.
Hot Bank Companies To Buy Right Now: Banco Bradesco SA (BBD)
Banco Bradesco S.A. (the Bank), incorporated on November 5, 1943, is commercial bank. The Bank offers a range of banking and financial products and services in Brazil and abroad to individuals, large, midsized and small companies and local and international corporations and institutions. It operates in two segments: the banking, and the insurance, pension and capitalization bonds. Its products and services encompass banking operations, such as loans and advances and deposittaking, credit card issuance, purchasing consortiums, insurance, leasing, payment collection and processing, pension plans, asset management and brokerage services. The main services it offers through Bradesco Expresso are receipt and submission of account applications; receipt and submission of account applications; Social Security National Service (INSS) benefit payments; checking and savings account deposits, and receipt of consumption bills, bank charges and taxes. In May, 2011, the Bank acquired Banco do Estado do Rio de Janeiro S.A. (BERJ).
Banking
The Banking segment includes deposit-taking with clients, including checking accounts, savings accounts and time deposits; loans and advances (individuals and companies, real estate financing, microcredit, onlending BNDES funds, rural credit, leasing, among others); credit cards, debit cards and pre-paid cards; management of receipts and payments; asset management; services related to capital markets and investment banking activities; intermediation and trading services; custody, depositary and controllership services; international banking services, and purchasing consortiums.
The Bank offers a variety of deposit products and services to our customers through its branches, including Non-interest bearing checking accounts, such as Easy Account, Click Account, Academic Account and Cell Phone Bonus Account; traditional savings accounts; time deposits, and deposits from financial institutions. As of December 31, 2011, it had 43.4 million savings a! ccounts. It offers its customers certain additional services, such as identified deposits and real-time banking transfers. Its loans and advances to customers, consumer credit, corporate and agricultural-sector loans, totaled R$263.5 billion as of December 31, 2011.
The Bank�� loan portfolio consists of short-term loans, vehicle financings and overdraft loans on checking accounts. It also provides revolving credit facilities and traditional term loans. As of December 31, 2011, it had outstanding advances, vehicle financings, consumer loans and revolving credit totaling R$58.0 billion, or 22.0% of its portfolio of loans and advances. Banco Bradesco Financiamentos (Bradesco Financiamentos) offers direct-to-consumer credit and leasing for the acquisition of vehicles and payroll-deductible loans to the public and private sectors 'in Brazil. Supported by BF Promotora de Vendas Ltda. (BF Promotora), and using the Bradesco Financiamentos brand, the Bank operates through its network of correspondents in Brazil, consisting of retailers and dealers selling light vehicles, trucks and motorcycles, to offer financing and/or leasing for vehicles. Through Bradesco Promotora brand, it offer payroll-deductible loans to social security retirees and pensioners, public-sector employees, military personnel and private-sector companies sponsoring plans, and other aggregated products (insurance, capitalization bonds, cards, purchasing consortiums, and others).
As of December 31, 2011, the Bank had 63,156 outstanding real estate loans. As of December 31, 2011, the aggregate outstanding amount of its real estate loans amounted to R$15.9 billion, representing 6% of its portfolio of loans and advances. As of December 31, 2011, it had 69,491 microcredit loans outstanding, totaling R$62.8 million. Its BNDES onlending portfolio totaled R$35.4 billion as of December 31, 2011.
The Bank provides traditional loans for the ongoing needs of its corporate customers. It had R$85.8 billion of outstand! ing other! local commercial loans, accounting for 32.5% of its portfolio of loans and advances as of December 31, 2011. It offers a range of loans to its Brazilian corporate customers, including short-term loans of 29 days or less; guaranteed checking accounts and corporate overdraft loans; discounting trade receivables, promissory notes, checks, credit card and supplier receivables, and a number of other receivables; financing for purchase and sale of goods and services; corporate real estate financing, and investment lines for acquisition of assets and machinery. As of December 31, 2011, the Bank had R$11 billion in outstanding rural loans, representing 4.2% of its portfolio of loans and advances. The Bank conducts its leasing operations through its primary leasing subsidiary, Bradesco Leasing and also through Bradesco Financiamentos.
The Bank offers electronic solutions for receipt and payment management solutions, which include collection and payment services and online resource management enabling its customers to pay suppliers, salaries, and taxes and other levies to governmental or public entities. The global cash management concept provides solutions for multinationals in Brazil and/or domestic companies operating abroad. It manages third-party assets through mutual funds; individual and corporate investment portfolios; pension funds, including assets guaranteeing the technical provisions of Bradesco Vida e Previdencia, and insurance companies, including assets guaranteeing the technical provisions of Bradesco Seguros.
The Bank�� subsidiaries Bradesco S.A. CTVM and Agora S.A. CTVM (or Bradesco Corretora and Agora Corretora, respectively) trade stocks, options, stock lending, public offerings and forwards. They also offer a range of products, such as Brazilian government securities (under the Tesouro Direto program), BM&F trading, investor clubs and investment funds.
The Bank offers a range of international services, such as foreign exchange transactions, foreign tr! ade finan! ce, lines of credit and banking. As of December 31, 2011, its international banking services included New York City, a branch and Bradesco Securities Inc., its subsidiary brokerage firm, or Bradesco Securities United States, and its subsidiary Bradesco North America LLC, or Bradesco North America; London, Bradesco Securities U.K., its subsidiary, or Bradesco Securities U.K.; Cayman Islands, two Bradesco branches and its subsidiary, Cidade Capital Markets Ltd., or Cidade Capital Markets; Argentina, Banco Bradesco Argentina S.A., its subsidiary, or Bradesco Argentina; Banco Bradesco Luxemburgo S.A. its subsidiary, or Bradesco Europe; Japan, Bradesco Services Co. Ltd., its subsidiary, or Bradesco Services Japan; in Hong Kong, its subsidiary Bradesco Trade Services Ltd, or Bradesco Trade, and in Mexico, its subsidiary Ibi Services, Sociedad de Responsabilidad Limitada, or Ibi Mexico.
The Bank�� Brazilian foreign-trade related business consists of export and import finance. In addition to import and export finance, its customers have access to a range of services and foreign exchange products, such as purchasing and selling travelers checks and foreign currency paper money; cross border money transfers; advance payment for exports; accounts abroad in foreign currency; cash holding in other countries; collecting import and export receivables; repaid cards with foreign currency (individual), and structured foreign currency transactions through its foreign units.
Insurance, pension plans and capitalization bonds
The Bank offers insurance products through a number of different entities, which it refers to collectively as Grupo Bradesco Seguros. It offers life, personal accident and random events insurance through its subsidiary Bradesco Vida e Previdencia. It offers health insurance policies through Bradesco Saude and its subsidiaries for small, medium or large companies. It provides automobile, property/casualty and liability products through its subsidiary Bradesco Auto! /RE. It a! lso offers certain automobile, health, and property/casualty insurance products directly through its Website.
Advisors' Opinion:- [By Charles Sizemore]
And speaking of top dividend stocks with high capital gains potential, next on the list of are Brazilian banking groups Banco Bradesco (BBD) and Banco Itau (ITUB) — two monthly dividend stocks you must consider.
- [By Jon C. Ogg]
Banco Bradesco S.A. (NYSE: BBD) is one of the key banks and financial services companies in Brazil. A Yahoo! Finance reference showed that the 2012 figures were as follows: 4,686 branches; 34,859 ATMs; 12,975 shared ATMs under the Banco24Horas brand; and 5,237 special points of banking services. At $11.65, the 52-week trading range is $11.29 to $17.79. This ADR is down 7% so far in 2014.
Hot Bank Companies To Buy Right Now: J P Morgan Chase & Co(JPM)
JPMorgan Chase & Co., a financial holding company, provides various financial services worldwide. Its Investment Bank segment provides various investment banking products and services, including advising on corporate strategy and structure, capital-raising in equity and debt markets, risk management, market-making in cash securities and derivative instruments, prime brokerage, and research services serving corporations, financial institutions, governments, and institutional investors. The company?s Commercial Banking segment provides lending, treasury, investment banking, and asset management services to corporations, municipalities, financial institutions, and not-for-profit entities. Its Treasury & Securities Services segment offers cash management, trade, wholesale card, and liquidity products and services to small and mid-sized companies, multinational corporations, financial institutions, and government entities. It also holds, values, clears, and services securities, cash, and alternative investments for investors and broker-dealers, and manages depositary receipt programs worldwide. JPMorgan?s Asset Management segment provides investment and wealth management to institutions, retail investors, and high-net-worth individuals. This segment offers investment management in equities, fixed income, real estate, hedge funds, private equity, and liquidity products, as well as trust and estate, banking and brokerage services, and retirement services. Its Retail Financial Services segment offers retail banking and consumer lending services that include checking and savings accounts, mortgages, home equity and business loans, and investments through ATMs, online banking, and telephone banking, as well as auto dealerships and school financial-aid offices. The company?s Card Services segment issues credit cards and processes various credit card payments. JPMorgan Chase & Co. was founded in 1823 and is headquartered in New York, New York.
Advisors' Opinion:- [By Jessica Alling]
Some good news�
If you're still in the market for a new mortgage, there may be some slightly good news for you this morning. Freddie Mac has reported that mortgage rates have slowed a bit after last week's run-up. After a high of 4.46% last week, the lower 4.29% average is still a deal (historically speaking) for new buyers. Bank of America (NYSE: BAC ) and JPMorgan (NYSE: JPM ) may be in the red so far in trading, but both banks would be more than happy to welcome new mortgage customers. - [By John Grgurich]
At JPMorgan Chase (NYSE: JPM ) , first-quarter revenue was down 4.87%. At Wells Fargo (NYSE: WFC ) , revenue was down 1.40% for the first quarter. Profit is all well and good -- JPMorgan, Wells, and Morgan Stanley all had plenty of it in Q1 -- but if it isn't born out of ongoing revenue growth, then it's not sustainable.
Hot Bank Companies To Buy Right Now: CSB Bancorp Inc (CSBB)
CSB Bancorp, Inc. (CSB), incorporated in 1991, is a financial holding company. The Commercial and Savings Bank of Millersburg, Ohio (the Bank) is a wholly owned subsidiary of the Company. CSB operates primarily through the Bank and its other subsidiaries, providing a range of banking, trust, financial and brokerage services to corporate, institutional and individual customers throughout northeast Ohio. The Bank provides retail and commercial banking services to its customers, including checking and savings accounts, time deposits, individual retirement accounts (IRAs), safe deposit facilities, personal loans, commercial loans, real estate mortgage loans, installment loans, night depository facilities, brokerage and trust services.
Lending Activities
The Bank provides residential real estate, commercial real estate, commercial and consumer loans to customers located primarily in Holmes, Tuscarawas, Wayne, Stark and portions of surrounding counties in Ohio. Commercial loan rates are variable as well as fixed, and include operating lines of credit and term loans made to small businesses, primarily based on their ability to repay the loan from the cash flow of the business. Business assets, such as equipment, accounts receivable and inventory typically secure such loans. Commercial real estate loans are primarily secured by borrower-occupied business real estate. Commercial real estate loans are generally originated with a loan-to-value ratio of 80% or less. Commercial construction loans are secured by commercial real estate and in most cases the Bank also provides the permanent financing. Residential real estate loans carry both fixed and variable rates and are secured by the borrower�� residence. Home equity lines of credit are made to individuals and are secured by second or first mortgages on the borrower�� residence. Installment loans to individuals include loans secured by automobiles and other consumer assets, including second mortgages on personal residences.
Investment Activities
As of December 31, 2011, the Company�� securities available-for-sale totaled $123,026,000. Its portfolio of securities available-for-sale includes the United States treasury securities, the United States Government corporations and agencies, mortgage-backed securities, obligations of states and political subdivisions, equity securities, and corporate bonds.
Sources of Funds
As of December 31, 2011, the Company�� portfolio of deposits included noninterest-bearing demand, interest-bearing demand deposits, savings deposits and time deposits. Short-term borrowings consist of securities sold under agreements to repurchase, short-term advances through Federal Home Loan Bank and federal funds purchased.
Advisors' Opinion:- [By CRWE]
Today, CSBB remains (0.00%) +0.000 at $18.75 thus far (ref. google finance Delayed: 3:53PM EDT July 30, 2013).
CSB Bancorp, Inc. previously reported second quarter 2013 net income of $1.25 million or $.45 per basic and diluted share, as compared to $1.14 million or $.41 per basic and diluted share for the same period in 2012.
Annualized returns on average common equity (��OE�� and average assets (��OA�� for the quarter were 9.32% and 0.88%, respectively, compared with 8.98% and 0.82% for the second quarter of 2012.
Eddie Steiner, President and CEO commented, ��e continue to focus on growing relationships with current and new customers. The bank�� average loan balances have increased 10% in the past year, and although margins remain tight, this growth has provided increases of approximately 4% in net interest income.��/p>
Hot Bank Companies To Buy Right Now: Bank of Hawaii Corp (BOH)
Bank of Hawaii Corporation, incorporated on February 4, 1998, is a bank holding company. The Company�� operating subsidiary is Bank of Hawaii (the Bank). The Bank provides a range of financial services and products primarily to customers in Hawaii, Guam and other Pacific Islands. The Bank's subsidiaries include Bank of Hawaii Leasing, Inc., Bankoh Investment Services, Inc. and Pacific Century Life Insurance Corporation. The Bank's subsidiaries are engaged in equipment leasing, securities brokerage, investment services and providing credit insurance. It operates in four segments: Retail Banking, Commercial Banking, Investment Services, and Treasury and Other. Its other subsidiary is the BOHC Investment Fund, LLC (the Fund). The Fund was organized to invest in and hold securities of Qualified High Technology Businesses.
Retail Banking
Retail Banking offers a range of financial products and services to consumers and small businesses. Loan and lease products include residential mortgage loans, home equity lines of credit, automobile loans and leases and installment loans. Deposit products include checking, savings, and time deposit accounts. Retail Banking also offers retail insurance products. Products and services from Retail Banking are delivered to customers through 65 Hawaii branch locations, 494 automated teller machines (ATMs) throughout Hawaii and the Pacific Islands, e-Bankoh (on-line banking service), around-the-clock customer service center, and a mobile banking service.
Commercial Banking
Commercial Banking offers products, including corporate banking, commercial real estate loans, commercial lease financing, auto dealer financing, and deposit products. Commercial lending and deposit products are offered to middle-market and large companies in Hawaii. Commercial real estate mortgages focus on customers that include investors, developers, and builders predominantly domiciled in Hawaii. Commercial Banking also includes international banking a! nd operations at the Bank's 11 branches in the Pacific Islands and also provides merchant services to its small business customers.
Investment Services
Investment Services includes private banking, trust services, investment management, and institutional investment advisory services. The private banking and personal trust group assists individuals and families in building and preserving their wealth by providing investment, credit, and trust services to high-net-worth individuals. The investment management group manages portfolios utilizing a variety of investment products. Institutional client services offer investment advice to corporations, government entities and foundations. Investment Services also provides a full service brokerage offering equities, mutual funds, life insurance, and annuity products.
Treasury and Other
Treasury consists of corporate asset and liability management activities, including interest rate risk management and a foreign exchange business. This segment's assets consist of interest-bearing deposits, investment securities, federal funds sold and purchased, government deposits, and short and long-term borrowings. The primary sources of noninterest income are from bank-owned life insurance, net gains from the sale of investment securities, and foreign exchange income related to customer driven currency requests from merchants and island visitors.
Investment Securities
The Bank�� investment securities portfolio includes debt securities issued by the United States Treasury and Government Agencies, debt securities issued by states and political sub-divisions, debt securities issued by corporations, mortgage-backed securities issued by government agencies and the United States Government-Sponsored Enterprises. As of December 31, 2012, its available-for-sale investment securities portfolio consisted of securities with an average base duration of less than three years.
Advisors' Opinion:- [By John Maxfield]
Percentages aside, the benefit of the relative health of these housing markets can be seen in the performance of smaller, regional banks like Bank of Hawaii (NYSE: BOH ) , BB&T (NYSE: BBT ) , and TD Bank (NYSE: TD ) which have large presences in Hawaii, West Virginia, and Maine, respectively. Shares of all of these banks have more than recovered since the financial crisis as a testament to this.
Hot Bank Companies To Buy Right Now: Lloyds Banking Group PLC (LLOY)
Lloyds Banking Group plc is a holding company. The Company is a financial services group providing a range of banking and financial services, primarily in the United Kingdom, to personal and corporate customers. It operates in four segments: Retail, Commercial Banking, Wealth, Asset Finance and International, and Insurance. Retail provides banking, mortgages and other financial services to personal customers in the United Kingdom. Commercial Banking provides banking and related services to business clients. Wealth, Asset Finance and International provides private banking and asset management and asset finance. Insurance provides long term savings, protection and investment products and provides general insurance to personal customers. In January 2014, Westpac Banking Corporation completed the acquisition of Lloyds Banking Group Plc�� Australian asset finance business, Capital Finance Australia Limited, and its Australian corporate loan portfolio, BOS International (Australia) Ltd. Advisors' Opinion:- [By Sofia Horta e Costa]
European stocks declined from a five-year high as investors sold holdings in companies from Lloyds Banking Group Plc (LLOY) to Continental AG.
Lloyds dropped 3.5 percent after the U.K. government sold a 3.2 billion-pound ($5.1 billion) stake in the lender. Continental and Galp Energia SGPS SA fell at least 2.5 percent as investors sold shares in the companies. Total SA (FP) retreated 1.3 percent following a report that Groupe Bruxelles Lambert SA may dispose of its 4 percent stake in the French oil producer.
- [By Ruth David]
Governments seeking to cut debt were some of the biggest sellers of equities in the third quarter. Sweden sold a $3.4 billion stake in Nordea Bank, the Nordic region�� largest lender, on Sept. 25. The deal came a week after the U.K. sold a 3 billion-pound ($4.8 billion) holding in Lloyds Banking Group Plc (LLOY), its first disposal since bailing out the lender in 2008.
Hot Bank Companies To Buy Right Now: PHH Corp (PHH)
PHH Corporation (PHH), incorporated in 1953, is an outsource provider of mortgage and fleet management services. PHH operates in three segments: Mortgage Production, Mortgage Servicing and Fleet Management Services. The Company provides mortgage banking services to a range of clients, including financial institutions and real estate brokers, throughout the United States. The Company�� mortgage banking activities include originating, purchasing, selling and servicing mortgage loans through its wholly owned subsidiary, PHH Mortgage Corporation and its subsidiaries (collectively PHH Mortgage). It provides commercial fleet management services to corporate clients and government agencies throughout the United States and Canada through its wholly owned subsidiary, PHH Vehicle Management Services Group LLC (PHH VMS). PHH VMS is a fully integrated provider of fleet management services with a range of product offerings, including managing and leasing vehicle fleets and providing other fee-based services for its clients��vehicle fleets.
Mortgage Production Segment
The Mortgage Production segment provides mortgage services, including private-label mortgage services, to financial institutions and real estate brokers through PHH Mortgage. The Mortgage Production segment generates revenue through fee-based mortgage loan origination services and the origination and sale of mortgage loans into the secondary market. PHH Mortgage generally sells all mortgage loans that it originates to secondary market investors, which include a variety of institutional investors, and typically retains the servicing rights on mortgage loans sold. During the year ended December 31, 2011, 92% of its mortgage loans were sold to, or were sold pursuant to, programs sponsored by Fannie Mae, Freddie Mac or Ginnie Mae and the remaining 8% were sold to private investors. The Mortgage Production segment includes PHH Home Loans, LLC (together with its subsidiaries, PHH Home Loans), which is a joint venture that the C! ompany maintains with Realogy Corporation. The Company owns 50.1% of PHH Home Loans through its subsidiaries and Realogy owns the remaining 49.9% through their affiliates. PHH has rights to use the Century 21, Coldwell Banker and ERA brand names in marketing its mortgage loan products through PHH Home Loans and other arrangements that it has with Realogy.
The Mortgage Production segment also includes its interest in Speedy Title & Appraisal Review Services LLC (STARS), which provides appraisal services utilizing a network of professional licensed firms offering local coverage throughout the United States and also provides credit research, flood certification and tax services. On March 31, 2011, it sold 50.1% of the interests in STARS to CoreLogic, Inc. The Company operates through two principal business channels: private label services and real estate.
The retail platform consists of private label services and real estate channels. The Company is a provider of private-label mortgage loan originations for financial institutions and other entities throughout the United States. In this channel, the Company offers a complete outsourcing solution, from processing applications through funding, for clients that wish to offer mortgage services to their customers but are not equipped to handle all aspects of the process cost-effectively. The Company also purchases closed mortgage loans from financial institutions.
The Company works with real estate brokers to provide their customers with mortgage loans. Through its affiliations with real estate brokers, it has access to home buyers at the time of purchase. It works with brokers associated with NRT Incorporated, Realogy�� owned real estate brokerage business, brokers associated with Realogy�� franchised brokerages (Realogy Franchisees) and third-party brokers that are not affiliated with Realogy. During 2011, approximately 22% of the Company�� mortgage loan originations were derived from its relationship with Realogy ! and its a! ffiliates. In this channel, it also works with Cartus Corporation, Realogy�� relocation business, to provide mortgage loans to employees of Cartus��clients. Cartus provides outsourced corporate relocation services in the United States. Realogy has agreed that the real estate brokerage business owned and operated by NRT Incorporated and the title and settlement services business owned and operated by Title Resource Group LLC will recommend PHH Home Loans as provider of mortgage loans to the independent sales associates affiliated with Realogy, excluding the independent sales associates of any Realogy Franchisee, and all customers of Realogy Services Group LLC and Realogy Services Venture Partner, Inc., excluding Realogy Franchisees. Certain Realogy Franchisees have agreed to recommend PHH Mortgage as provider of mortgage loans to their respective independent sales associates. As of 2011, it has entered into exclusive marketing service agreements with 5% of Realogy Franchisees. In the Relocation Channel, the Company works with Cartus Corporation, Realogy�� relocation business, to provide mortgage loans to employees of Cartus��clients.
During 2011, the Company originated mortgage loans for approximately 17% of the transactions in which real estate brokerages owned by Realogy represented the home buyer. And approximately 8% of the transactions in which real estate brokerages franchised by Realogy where it had exclusive marketing service agreements, represented the home buyer.
Mortgage Servicing Segment
The Company principally generates revenue in its Mortgage Servicing segment through fees earned from its servicing rights or from its subservicing agreements. Mortgage servicing rights are the rights to receive a portion of the interest coupon and fees collected from the mortgagors for performing specified mortgage servicing activities, which consist of collecting loan payments, remitting principal and interest payments to investors, managing escrow funds for th! e payment! of mortgage-related expenses, such as taxes and insurance, performing loss mitigation activities on behalf of investors, and otherwise administering its mortgage loan servicing portfolio. Mortgage servicing rights for sold loans are initially recorded at fair value in its Mortgage Production Segment�� results of operations. Changes in fair value subsequent to the initial capitalization are recorded in its Mortgage Servicing Segment�� results of operations. The Company�� Mortgage Servicing segment also includes the results of its reinsurance activities from its wholly owned subsidiary, Atrium Reinsurance Corporation.
The Company provides mortgage reinsurance to certain third-party insurance companies that provide primary mortgage insurance on loans originated in its Mortgage Production segment. While it does not underwrite primary mortgage insurance directly, it provides reinsurance that covers losses in excess of a specified percentage of the principal balance of a given pool of mortgage loans, subject to a contractual limit. In exchange for assuming a portion of the risk of loss related to the reinsured loans, Atrium Reinsurance Corporation, its wholly owned subsidiary, receives a portion of borrower�� premiums from the third-party insurance companies.
Fleet Management Services Segment
The Company provides fleet management services to corporate clients and government agencies throughout the United States and Canada. It is an integrated provider of these services with a range of product offerings. The Company primarily focuses on clients with fleets of greater than 75 vehicles. As of 2011, it had approximately 270,000 vehicles leased, primarily consisting of cars and light-duty trucks and, to a lesser extent, medium and heavy-duty trucks, trailers and equipment, and approximately 300,000 additional vehicles serviced under fuel cards, maintenance cards, accident management services arrangements and/or similar arrangements. During 2011, the Company purchas! ed approx! imately 61,000 vehicles.
The Company provides corporate clients and government agencies with services and products, such as Fleet Leasing and Fleet Management Services, Maintenance Services, Accident Management Services, and Fuel Card Services. The Fleet Leasing and Fleet management services include vehicle leasing, fleet policy analysis and recommendations, benchmarking, vehicle recommendations, ordering and purchasing vehicles, arranging for vehicle delivery and administration of the title and registration process, as well as tax and insurance requirements, pursuing warranty claims and remarketing used vehicles. It leases vehicles to its clients under both open-end and closed-end leases. Open-end leases represent 97% of its lease portfolio, and are a form of lease in which the client bears substantially all of the vehicle�� residual value risk. These leases typically have a minimum term of 12 months, and can be continued after that at the lessee�� election for successive monthly renewals. Upon return of the vehicle by the lessee, it typically sells the vehicle into the secondary market, and the client receives a credit or pays the difference between the sale proceeds and the vehicle�� book value.
Open-end leases may be classified as operating or direct financing depending upon the nature of the residual guarantee. Revenues for operating leases contain a depreciation component, an interest component and a management fee component, and are recognized over the lease term. For direct financing leases, revenues contain an interest component and a management fee component, and are recognized over the lease term. Closed-end leases represent 3% of its lease portfolio, and are a form of lease in which it retains the residual risk of the value of the vehicle at the end of the lease term. Closed-end leases may be classified as operating or direct financing based on the terms of the individual contracts.
The Company offers clients vehicle maintenance service cards that! are used! to facilitate payment for repairs and maintenance. It maintains a network of third-party service providers in the United States and Canada to ensure ease of use by the clients drivers. The vehicle maintenance service cards provide clients with negotiated discounts off of full retail prices through its supplier network, access to its in-house team of certified maintenance experts that monitor transactions for policy compliance, reasonability and cost-effectiveness, and inclusion of vehicle maintenance transactions in a consolidated information and billing database, which assists clients with the evaluation of overall fleet performance and costs. During 2011, the Company averaged 324,000 maintenance service cards in the United States and Canada. It receives a fixed monthly fee for these services from its clients, as well as additional fees from service providers in its third-party network for individual maintenance services.
PHH provides its clients with accident management services, such as immediate assistance upon receiving the initial accident report from the driver, an organized vehicle appraisal and repair process through a network of third-party preferred repair and body shops and coordination and negotiation of potential accident claims. The Company�� accident management services provide its clients with convenient, coordinated 24-hour assistance from its call center, access to its relationships with the repair and body shops included in its preferred supplier network, which typically provide clients with favorable terms, and expertise of its damage specialists, who ensure that vehicle appraisals and repairs are appropriate, cost-efficient and in accordance with each client�� specific repair policy. During 2011, it averaged 298,000 vehicles that were participating in accident management programs. The Company receives fees from its clients for these services, as well as additional fees from service providers in its third-party network for individual incident services.
It prov! ides its clients with fuel card programs that facilitate the payment, monitoring and control of fuel purchases. Fuel is typically the single fleet-related operating expense. Its fuel cards provide its clients with access to more fuel brands and outlets than other private-label corporate fuel cards, point-of-sale processing technology for fuel card transactions that enhances clients��ability to monitor purchases and consolidated billing, and access to other information on fuel card transactions, which assists clients with the evaluation of overall fleet performance and costs. Its fuel cards are offered through relationships with third parties in the United States, and a card in Canada, which offer expanded fuel management capabilities on one service card. During 2011, it averaged 295,000 fuel cards in the United States and Canada. PHH receives both monthly fees from its fuel card clients and additional fees from fuel partners and providers.The Company competes with Bank of America, Wells Fargo Home Mortgage, Chase Home Finance, CitiMortgage, GE Commercial Finance Fleet Services, Wheels, Inc., Automotive Resources International and Lease Plan International.
Advisors' Opinion:- [By Holly LaFon]
Despite economic and political turmoil, equity markets performed well across the board in September of 2013 and over the trailing twelve months. The September gains reversed losses in August and also resulted in positive overall quarterly performance with a number of major indexes moving further into record territory. After disturbing the markets in May and June with comments that they may taper Quantitative Easing (QE), the Fed surprised investors with an announcement that it would not reduce its asset purchases in the near-term. The announcement removed fears that a continued rise in interest rates may stall the economic recovery, as seen by the market's negative reaction to the sharp rise in the 10-year Treasury rate in August of 2013. Investors were also comforted by improving fundamentals both domestically and abroad. The Eurozone may finally be emerging from its prolonged recession and a number of economic reports in the U.S. continue to show progress. Specifically, initial unemployment claims dropped to a multiyear low early in September and the housing market continued to improve, as evidenced by prices rising 12.4 percent year-over year, which along with the stock market's strength, has created a positive wealth effect for consumers. In response to this general economic improvement, consumer confidence increased at the end of September, and the index of leading economic indicators ticked up as well, suggesting that, absent the effects of politics, the recovery in the real economy was continuing. Our portfolios that focus on corporate restructuring (Keeley Small Cap Value, Keeley Small-Mid Cap Value, Keeley Mid Cap Value, Keeley All Cap Value, and Keeley Alternative Value) have all experienced a productive investment cycle with respect to their opportunity sets, and many of our holdings have posted impressive results in recent quarters. Although we acknowledge an improving economy has boosted the outlook for our more cyclical holdings, our research has gu
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