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Advocate for diversity in accounting: "It"s really a relationship business’

“I'm interested in helping people that actually want to learn about diverse cultures. I want to help racially diverse people get themselves into interviews for these jobs and getting exposed to these jobs," said the partner at Schofer Dillberg and Co......»»

Category: topSource: bizjournalsOct 14th, 2021

4 types of people you need in your professional support network

You need a truth-teller to be a sounding board for honest feedback, and an advocate to speak up in support of your skills and talents. Sponsors have the most influence. If you don't have one, consider 'promoting' a mentor. Strelka Institute Behind every successful person is a powerful support network. You need mentors, truth-tellers, advocates, and sponsors in your network. Evaluate your support system and find people you admire to fill in any missing rolls. Leaders who reach the pinnacle of their professional goals don't do it alone. Behind every success story is a solid support network.Everyday support comes from partners, friends, and family, but a support network is much more. It's made up of people who, in their unique, individual ways, can help us to thrive, grow, and achieve our professional goals.Kathryn Heath, founding partner of Flynn Heath Holt Leadership, posits that a solid support network consists of people who fulfill four distinct roles: mentors, advocates, sponsors, and truth-tellers. You can rely on your support network to help you do everything, from navigating office politics to charting a successful career path to giving day-to-day feedback. The people in your support network do not have to work in your company or even in the same industry, but it helps if most of them do.Here is how each unique support network role is defined. Take stock of who is in your system now and figure out which roles are missing. Or get inspired to build your support system from scratch.1. MentorsA mentor is someone in your company who, through their greater years of experience, can offer advice and guidance, and share their experiences and best practices. The mentor relationship is typically one-way, although being a mentor can be greatly fulfilling. A mentoring relationship can be a two-way street when it is a reverse-mentoring relationship. In reverse mentoring, a junior team member exchanges skills, knowledge, and understanding with someone more senior. This kind of mentoring offers many benefits and can create a lasting impact within an organization. It increases the retention of millennial and Gen Z workers, empowers new hires to speak up, promotes diversity, and improves new workers' critical business skills.2. AdvocatesPeople should have several advocates in their support network. These are the people who enjoy working with you and can speak on your behalf, advocating for your skills and talents. Advocates don't have to necessarily be in senior positions - they can be peers, direct reports, or senior leaders.3. Truth-tellersTruth-tellers offer a sounding board for honest feedback. They typically enjoy a close, trust-based relationship with you and want to see you succeed. It's because of those dynamics that they are unafraid to provide constructive criticism when you need it. Truth-tellers can be peers, friends, or even family members. 4. SponsorSponsors are the members of your support team with the most influence. They are typically in senior leadership, and have the power and seniority to make things happen. A great sponsor is an influential ally who believes in you and is enthusiastic about publicly endorsing your talents, helping propel your career forward. When I coach leaders, I often have them take inventory of who makes up their current support system. Do they have someone who fulfills each role? Typically, people can easily name their mentor, and maybe two or three advocates. Truth-tellers and sponsors are much more difficult to identify. Some leaders realize they don't have people in their lives they can look to for honest feedback, or people in their company who are their enthusiastic sponsors.If you are taking inventory of your own network and realize you don't have a sponsor, consider 'promoting' a mentor to a sponsor. The sponsorship relationship is more collaborative than the mentorship one, with sponsors having more day-to-day exposure to your talents and abilities. A sponsorship relationship can also be reciprocal - while a sponsor is invested in your future and can help develop your career, they also learn from your unique skills and experiences, areas they may be missing.We don't have to navigate the challenges of building a career alone. With the help of our mentors, advocates, truth-tellers, and sponsors, we can give one another the support we need to reach all of our goals.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 12th, 2021

Transcript: Hubert Joly

       The transcript from this week’s, MiB: Hubert Joly, Best Buy CEO, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.   ~~~   BARRY RITHOLTZ,… Read More The post Transcript: Hubert Joly appeared first on The Big Picture.        The transcript from this week’s, MiB: Hubert Joly, Best Buy CEO, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.   ~~~   BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I have an extra special guest. Hubert Joly is the man who helped turn around Best Buy when they were floundering about a decade ago. The stock has since returned 10X from when he joined as Chairman and Chief Executive Officer. He is the author of a fascinating new book, “The Heart of Business: Leadership Principles for the Next Era of Capitalism.” He’s really a fascinating guy, has an amazing background, both as a consultant for McKinsey and being on a number of different boards and running a number of different companies. Everybody who’s looked at his work always put him amongst the best CEOs, top 100 this, top 30 that, really just a tremendous, tremendous track record. And I had a fascinating time speaking with him. I think if you’re at all interested in anything involving leadership or the next era of capitalism or why the old-school Neutron Jack approach to just firing everybody and cutting costs away to restore profitability no longer works, you’re going to find this to be a fascinating conversation. So, with no further ado, my interview with Hubert Joly. VOICEOVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. RITHOLTZ: This week, my special guest is Hubert Joly. He is the former Chairman and Chief Executive Officer of Best Buy. He is currently the Senior Lecturer on Business at Harvard Business School. He is on the boards of directors at Johnson & Johnson and Ralph Lauren and has been named one of the top 100 CEOs by Harvard Business Review, one of the top 30 CEOs by Barron’s and one of the top 10 CEOs to work for in the U.S. by Glassdoor. Hubert Joly, welcome to Bloomberg. HUBERT JOLY, Senior Lecturer, Harvard Business School: Well, thank you, Barry, very much looking forward to our conversation. RITHOLTZ: So, let’s start with a little bit of your background, you’ve been the CEO of three major companies. Tell us about how that came about. Take us to the beginning or early days of your career. JOLY: Yes, Barry. I started my career with McKinsey & Company in France and then also in the U.S. Essentially, I didn’t know what I wanted to do. So, that, I thought, it’d be a great training ground and I ending up staying a dozen years at the firm, done a great deal and had wonderful opportunities to lead great companies. At first, I left McKinsey to lead a client that was EDS, Electronic Data Systems in France and I ended up doing a number of turnaround and transformations of companies in industry sectors that were challenged by technology. So, in videogames, in travel, and then, of course, ended up with Best Buy. And I’ve ended up working a variety of industry sectors and those specializations there and every move was a move that was based on — it was – there was somebody with whom I had developed relationship that played a critical role. And so, for example, when I left Vivendi Universal to become the CEO of Carlson Wagonlit Travel, the CEO of (inaudible), which was one of the two shareholders, had been a client of mine and where we have stayed friends. So, Barry, one of the key lessons is that try to minimize the number of people you annoy or irritate along the way and try to focus on doing a great job when you are and then I hope that God provides in the end, which is, I think, the lesson for me of my career. RITHOLTZ: So, I want to spend more time talking about your career. But I have to ask, how did you find yourself moving from France to the United States, what led to that and what was that transition like? Because every time I’m in Paris, I always end up saying to myself, God, I could live here. JOLY: Yes. Thank you for that, Barry. So, the first time I moved to the U.S. in 1985, I was with McKinsey & Company. I’d gone to school in France and there had been discussion of should I do an MBA in the U.S. and after a while, McKinsey said no, you really don’t need to do that. But if you want to spend time in the U.S., we’ll send you to one of our offices. So, I ended up in the San Francisco office, quite the years where the minors were at the top of their game, right? So, that — it’s quite fascinating. And then the last time I moved to the U.S. was in ’08, 2008, when I became the CEO of Carlson Companies. So, I moved there from Paris, France to Minneapolis, Minnesota. And I love France. I think it’s a great country. I love the U.S. What I love about the U.S. is that since Jefferson, we’ve been optimistic. It’s been the dream of a better life and it’s this optimism. Let me tell you, in France, you talk about a problem that has never been solved. People will say, well, who are you to talk about it. Nobody has been able to solve it, right. But in the U.S., if a problem has never been solved, immediately, your friends is like, this is interesting, let’s see whether we can solve it. I love this optimism in this great country and I’m now a dual citizen, Barry. RITHOLTZ: Very — really, really interesting. So, let’s talk a little bit about how one becomes a good CEO. Is it effectively on-the-job training or is it a function of your experience and ability that makes you a great leader? JOLY: Yes. There’s the myth that you’re born a leader. I think that every leader was born, of course, but none of us were born leaders and I think it’s a learning journey. And for me, it’s been — yes, I’m learning by doing, learning on the job, learning from great mentors. One thing I learned the most about — with McKinsey was watching my client’s lead and I learned so much from a number of them. Learning from colleagues, at Best Buy, I learned so much from the frontliners and some of our great executives and then our coach. So, let’s slow down here. Can we agree, Barry, that exactly 100% of the top 100 tennis players in the world have a coach. RITHOLTZ: Sure. JOLY: I think the same is true for all of the NFL teams, all of the Champions League teams. What about us executives, right? And so, it’s interesting that now, for CEOs and senior executives have coaches much more popular. But 10 or 15 years ago, not so much. And I’ve benefited enormously, my first coach was the inimitable Marshall Goldsmith. I’ve learned a ton from him. He helped me deal with feedback and focus on getting better and asking for advice. And without Marshall, I would not be – it is infomercial before and after picture, it’s most improved. RITHOLTZ: Marshall Goldsmith was where? Was that at McKinsey or? JOLY: It was — the first time I worked with Marshall was in 2009. I had just became the CEO of Carlson Companies and my head of HR, Elizabeth Bastoni, told me, would you like to work with a coach and my first reaction was, am I doing anything wrong, is everything wrong with this? He said, no, no. I know Marshall, he helps in a great deal get better. His clients are – were, at that time, Alan Mullally of Ford and Jim Kim of the World Bank. I said, that’s cool, I want to be a member of that club. And Marshall was so helpful because when I was getting feedback, you do a 360 and you hear the goods and then you hear the other parts and my reaction initially was, what’s wrong with them, right? What are they talking about? And Marshall helped me — and the way he helped was — so, I did the 360. He gave me first all of the good things that people have said and says, spend the time to swallow this, digest this. And then the next day, he gave me the other stuff and he said, here’s the scoop, you don’t need to do anything with it, right? There’s no god that says that you need to get better at any of these things but you can — but you get to decide what you want to work on and get better at, right? And think about, so, here’s a question that we could ask, right, think about things that you’d like to get better at, right, and if you cannot think about anything, try humility, right, as a potential area. And then what Marshall made me do is talk to my team and said, thank you very much for all of the feedback you’ve given me and then based on what you said, I’m going to start to work on three things, number one, number two, number three, and I’m going to follow up with each of you to ask you for advice on how I can get better at these three things and then a few months from now, I’ll follow up to see how I’m doing. Now, believe me, Barry, first time I did this, this was excruciating pain having to admit to my team that I was not perfect. They knew it. They knew I was not perfect but having to say it out loud and then I wanted to get better at something. But this getting better at something makes it very positive. And then — so, later on, when I joined Best Buy, I repeated that signaling to every one of the executives that it was OK to want to get better at something. And so, later on, everybody at Best Buy had a coach and we were all helping out each other on getting better at our job, which is what I think you need to do. So, coaching — executive coaching plays a key role in my life. RITHOLTZ: Very interesting. And I recall seeing Marshall Goldsmith’s name on a book, “What Got You Here Won’t Get You There” and a quick Google search shows me that like you, he also is a professor. He teaches at Dartmouth’s Tuck School of Business and has quite an impressive CV. But I want to stick with the concept of coaching and mentors, what did you learn at McKinsey who helped you when you were there sort of develop into the CEO that you are today? JOLY: Yes. So, there was — for me, there were two phases, Barry, at McKinsey that we serve, before the partnership and then the partnership. So, in my first say six years as an associate and then a manager, I learned a lot about problem-solving, communications, serving functional matters and so forth. So, I could say I learned a bunch of technical skills. But when I became a partner, the opportunity I got was sit down next to the CEO of the clients, watch them do their thing and listen and learn from them and that makes me — I got a great deal, right, because they were paying us and I was learning from them, right? Couldn’t get a better deal than that. And so, I will always remember, there was a client in, Jean-Marie Descarpentries was the CEO of a computer company Honeywell Bull and this is the guy who told me that the purpose of the company is not to make money, right? It’s an outcome, right? In business, you have three imperatives. You have the people imperative, which are the right teams. We have the business imperatives, which are the customers or clients and then great products and services. And then there’s a financial imperative and, of course, you have to understand that excellence on the financial imperative is the result of excellence on the business imperative, which itself is the result of excellence on the people imperative. So, it’s people, business, finance and finance is an outcome. And by the way, it’s not the ultimate goal because if you think about a company as a human organization, a bunch of people working together, they’re probably in there to create something in the world, right, and we can dig into this but that was — and believe me that was 30 years before the BRT statement of 2019 that we said we need (ph) in August the second anniversary. And so then, it was — the practical implications around this is that when you do your monthly review with your team, start with people and organization. Don’t start with financial results. If you should start with financial result, you’re going to spend your entire time on financials and you want to understand what’s driving these results whereas if you start with people and organization, you have a chance to spend time on that, then business, customers, products and then the CFO will make sure that you’ll spend enough time on the financial results. So, for me, that was a game changer and I applied this throughout my career and you could say whether it was in videogames or in travel or hospitality or in Best Buy, this focus on people first and treating profit as an outcome was a big driver performance. And this has not smoked anything illegal when I say this, Barry. As you know, the share price of Best Buy went from beyond low, it was $11. Recently, it’s been between 110 and 120. So, time spent in nine years, that’s not bad. Maybe you could have done better, Barry, but it’s OK, I think. RITHOLTZ: No. I don’t think I could have done better than 10X and PES no longer illegal in New York. So, you could smoke whatever you like. We’re going to — by the way, those three steps that you just mentioned are right from the book and we’re going to talk a little more about the book in a few minutes. But before we get to that, I have one last question to ask you which has to do with the fact that Best Buy, you mentioned it’s up 10X, it’s a publicly-traded company. Before you were at Best Buy, you are also at a giant company but it was privately held. Tell us a little bit about what that transition was like having to answer to shareholders and Wall Street. How did you manage that? Very different experience from everybody I’ve spoken with over the years. JOLY: Yes. Barry, so, I’ve worked in a public company, Best Buy. I’ve worked in a family-owned company, this was Carlson Companies. I’ve worked in a partially private equity-owned company, Carlson Wagonlit Travel, one equity partner of JPMorgan with 45 different shareholders and frankly, I think it’s pretty much all the same. You have shareholders whether they are large entities like Fidelity or Wellington or it’s a private equity player or it’s a family, they have expectations and needs and, by the way, all of them are human beings, right, by the way and that’s focused on the high-intensity trading that all the longs and all the shorts, they are human beings, and I’ve had – even though I say profit is an outcome and is not the ultimate goal, shareholders, even in stakeholder capitalism, are very important stakeholders. They’re taking care of our retirement. So, we love them for that. And so, when I was a CEO of Best Buy, I so enjoyed spending time with our shareholders sharing with them what we’re doing, answering their questions, they’re smart. It was always taking things away and the key was pay attention, listen and then pay attention to the say/do ratio. Best Buy had lost its credibility because they were saying a lot but not doing much, right? So, with my wonderful CFO sharing the column with me, we’re going to say less and do more and that’s how we’re going to build our credibility and we would be very transparent, share our situation, the opportunities we saw, what we’re going to do, and then we update them in our progress. And so, I really enjoy the competition. But in many ways, Barry, I think public, private equity or a family is largely the same. It’s people, we have to respect them and take care of their needs. RITHOLTZ: My extra special guest this week is Hubert Joly. He is the former Chairman and Chief Executive at Best Buy, a company that he helped turn around over the course of his tenure there. Let’s talk a little bit about that. If you would have asked me a decade ago what the future look like for Best Buy, I would have said they were toast that Amazon was going to eat their lunch and they were heading to the garbage pile. Tell us what the key was to turning the company around so successfully. JOLY: You’re, right. Everybody thought we’re going to die. There was zero buy recommendation on the start in 2012 and what I found as I was examining the opportunity to become the CEO because my first reaction when I was approached was this is crazy, right? This is the same reaction as you described. But what I found is that there was nothing wrong with the markets or the business outside. All of the problems were self-inflicted. In fact, the customers needed Best Buy because we needed a place where to see and touch and feel the products and ask questions. And the vendors ultimately needed Best Buy. They needed a place where to showcase their products, the fruit of their billions of dollars of R&D investments. The problems were self-inflicted. Prices were not competitive. The online shopping experience was terrible. Speed of shipping was bad. The customer experiences in the stores have deteriorated. The cost structure was bloated and, and, and. That’s great news because if a problem is self-inflicted, you can fix it. RITHOLTZ: Right. JOLY: And so the first phase was all about fixing what was broken and the advice I had been getting, Barry, was cut, cut, cut. We’re going to have to close stores, cut headcounts. We did the opposite. All of the stores were profitable. So, frankly, there was no point of closing stores in a significant fashion. RITHOLTZ: Right. JOLY: It was very — the first phase was a very people centric approach, listening to the frontliners. My first week on the job, I spent it in the store in St. Cloud, Minnesota. I think in France, we would say St. Cloud but over there it’s St. Cloud so there you go. And really listening to the frontliners, they had all of the answers about what needed to be done. And so, my job was pretty easy, it was do what they have to — what they said we needed to do like fix the website, make sure the prices were competitive and so forth. The second on the people centric approach, build the right team at the top and then instead of focusing on headcount reduction, focus on growing the top line by meeting the customer needs and fixing what was broken in the customer experience and treating headcount reduction really as a last resort. And then focus on mobilizing the team on what we need to do for the customers. That sounds soft but that was our opportunity and that’s what we need to do in the first two or three or four years. And then once we have saved the company, it was about how do we — where do we go from here, how — what kind of company do we want to build for the future. And that’s why we focused on designing our purpose as a company. We said we’re actually not a consumer electronics retailer. We are a company in the business of enriching life through technology by addressing key human needs, which we’ll talk more about this. But this was transported because it’s expanded our addressable market and have to mobilize everybody. And as a company, we have to work on making this come to life in all of our activities and really creating an environment where – I think the summary at that time was we unleashed human magic. We had a hundred thousand people plus, I think spring in their step, connecting would drive them in life with their job and doing magical things for customers. And frankly, Barry, I learned so much along the way and, again, all of this sound soft but go back to — we went from $11 to 110 or 120. That was the key. RITHOLTZ: To say the very least. So, let’s talk a little bit about what you guys had done in the physical stores. The big threat to Best Buy was people showrooming, meaning showing up to look it up products and then buying it for a little cheaper at Amazon. How did you — and this is the line from the book, quote, “How did you kill showrooming and turned it into showcasing?” unquote. JOLY: Yes. So, everybody was talking about showrooming at that time. The frequenct was not that high actually but of course, it was incredibly frustrating for the blue shirt associates in our store to spend time with you, Barry, we love you but we spent 30 minutes with you answering all of your questions about the TV and then you buy it online. So, after 30 days at the company, we actually decided that we were going to take price off the table by lining up places with Amazon and giving the blue shirts the authority on the spot to match Amazon prices. And so, I took price off the table … RITHOLTZ: Right. JOLY: … and the customers, once they were in our stores, they were ours to lose. RITHOLTZ: Right. When you want to drive home with the TV in the back of the car instead of waiting a couple of days from it to come from Amazon, immediate gratification has to be a huge benefit you guys have as the physical store. JOLY: Exactly. And then, yes, of course, the (inaudible) but you’re still going to die because your cost structure is too high, it’s higher than Amazon or Walmart. So, we did take $2 billion of cost out. RITHOLTZ: Wow. JOLY: But the way we won in the end was we just had aha moment of, as I said, showcasing. If you are a Samsung or HP or Amazon and Google products, you need a place where to showcase your products, right, because you spend billions of dollars on R&D and if it’s just I’d say vignette on a website or box on a shelf, you’re not going to excite the customers. RITHOLTZ: Right. JOLY: You need a place where to showcase your products. And so, we did deals. The first one was with Samsung where we had a meeting in December of 2012, Barry. J.K. Shin, the then CEO of Samsung Electronics came to visit us in Minneapolis in December of 2012 and over dinner, we did a deal where in a matter of months, you would have 1,000 Samsung stores within our stores where you could showcase these products. It was just across the aisle from — we already had an Apple store within the store and it was good for the customers because they could see the products, they could compare with Apple. It was good for Samsung, right, because the alternative for them first was to build 1,000 stores in the U.S., it takes time, it’s difficult, and. of course, we have this great location and great traffic. And good for us because it was part of our OPM strategy, other people’s money strategy, right, because there were some good economics for us. And so, that allowed us to offset the cost advantage in Walmart or Amazon we have and then over time, we did deal with all of the world’s foremost almost tech companies, including Amazon for crying out loud, and that was the game changer. And we look — if you look at our stores today, they are shiny because — we have all of these shiny objects and you can see and experience all of these products. So, that was really a game changer. RITHOLTZ: So, let’s talk a little bit about both Samsung and Amazon. First, I’m always surprised that people don’t realize what a giant product company Samsung is. It’s not just phones but it’s phones, its TVs, it’s washers, dryers. I mean, Samsung basically anything in your house is a product that Samsung makes and not just entry-level washer, dryers or refrigerators. I think was it last year or two years ago, they bought Dacor, which is like a subzero, high-end manufacturer of kitchen appliances. So, when you set up the store within a store with Samsung, tell us about what that did and how did that impact Samsung’s sales at Best Buys? JOLY: Sure. Yes. I mean, you’re right to highlight this great company. The first deal we did with them was focused on phones and tablets and cameras. So, in a matter of months, they had these stores within our stores and it really put them on the map. It is I think — if you go back to the ’90s, Samsung was not the same company. They were really low end and the chairman at that time, so, the father of the current — of J.Y. Lee now, came to the U.S. and said, at some point, I want Best Buy to carry us and it would be the ultimate goal. And now, they’re one of our top five vendors, probably better than top five. And so, it really gives them the physical presence and to prove that it’s worth for them was then we did the same in the TV department and then in the appliance department. So, it’s been a series of wins for them. And once we have announced the deal with Samsung, other — we had similar conversation with Microsoft, Steve Ballmer, we had a conversation at CES and then two months later, we did the Microsoft stores within Best Buy and then it went on and on. And Tim Cook at Apple told me that he didn’t really like what we were doing, he understood it but he didn’t really like it and Apple has been a very important vendor to Best Buy. So, what we decided to do with them is do more. And so, it was stronger partnership. So, Best Buy is not simply carrying products and partners with the world’s foremost tech companies and with some of these companies and partners on product development, new product introduction and because there’s so much innovation that drives the business, it’s a critical role we play. We also partner in service, Best Buy sells AppleCare, an authorized Apple service provider. So, these partnerships really changed the game. And in the U.S., I think it’s not arrogant to say that Best Buy is the only player which these large companies can do these meaningful deals. So, it really changed the trajectory. RITHOLTZ: I have to ask you about the Geek Squad. Whose idea was that and how significant is it to the company? JOLY: Sure. Robert Stephens was a student at the University of Minnesota, was the — is the founder of Geek Squad in 1994. Very creative guy. The name itself is good — is cool, the logo and so forth, and then Best Buy acquired the company in 2002 when it was quite — still quite small and now, of course, it’s become really big, it’s 20,000 employees. And it’s the key elements of Best Buy’s differentiation because Best Buy is not just in the business of selling you something. We’re — our target customer — people who are excited about technology need technology but also need help with it. And so, with the Geek Squad and the blue shirts, we’re able to advise you when you’re looking at what to do but also help you implement in your home, helps you figure out if something is not working across, right? Of course, let’s take an example. If Netflix is not working tonight at your house, Barry, is it because of Netflix, is it piping to the home, is it the router, is it the streaming device, is it the TV, honey, what is it, right? And we’re honey, right, and we’re going to be able to help you across all of these vendors. And so, that’s a big differentiator for the company. So, really genius. RITHOLTZ: My extra special guest this week is Hubert Joly. His new book is called, “The Heart of Business.” Let’s talk a little bit about writing a book which is quite an endeavor. What motivated you to sit down and say, sure, I’ll write a book? JOLY: Well, this is not a traditional field book. So, this is not a memoir. This is not about the story of the Best Buy turnaround per se. It was reflection, Barry, and it’s really been something I’ve been thinking about for the last 30 years that so much of what I’ve learned at business school, what McKinsey or the early years of my career is wrong, dated or incomplete. And when sit back today or in the last couple of years, even though I’m the eternal (ph) optimist, I have to say it out loud, the world as we know it is not working, right? We’re in this multifaceted crisis, you have, of course, the health crisis and economic crisis, suicidal issues, racial issues, environmental problems, geopolitical tension, it simply is not working. And what’s the definition of madness, right? It’s doing the same thing and hoping for different outcome. And for me, on my FBI’s most wanted list, is two people. One is Milton Friedman, shareholder primacy, and two is Bob McNamara, the former Secretary of Defense and executive at Ford who’s the — almost the inventor top-down scientific management. These approaches don’t work and I think they got us in trouble and there’s a growing number of us, right, and certainly, I’m not the only one, who believe that there’s a better formula that business can be a force for good that — it’s the idea that business should pursue a noble purpose and take care of all of the stakeholders that you put people at the center. You embrace all stakeholders in some kind of declaration of future dependents. There’s no need to choose between employees and customers and shareholders. It’s by taking care of customers and employees and the community that generate great returns for shareholders. We treat profit as an outcome and this formula, people call it stakeholder capitalism or purposeful leadership, I think everybody now talks about it and embrace it, most people. There’s still a few who don’t agree. But the challenge then is how do you do this, how do you make this happen and, Barry, I felt that with my experience and the credibility of the Best Buy turnaround, I could add my voice and my energy to call this necessary foundation of business and capitalism around purpose and humanity and provide like a guide for any leader at any level frankly who is keen to move in that direction but like the rest of us, we would help. And so, that was the genesis of the book and the subtitle of the book is leadership principles, right, for the next era of capitalism and the book is full of very concrete examples and stories and illustrations. There’s questions at the end of each chapter that people can use to reflect and act at their company. So, that’s the book. RITHOLTZ: Speaking of the book, it got a terrific review from all — of all people, Amazon’s Jeff Bezos. How did that come about, how did Bezos give you a review and what’s the relationship like between Best Buy and Amazon these days? JOLY: Sure. Best Buys has always sold Amazon products because we think about Amazon as the retailer, of course, as a cloud company but Amazon is also a product company, right? They have the Kindle and, of course, all of their Echo products. And Best Buy have always sold Amazon’s products in the stores. Other retailers say it otherwise but we felt these were great products and we’re here to serve customers. I got to know Jeff firstly through the business council. Both of us were members there on the executive committee and once, I was invited to discuss our turnaround and how we had approached that transformation and Jeff was in the first row and being very kind. But then we did this significant partnership where I think it was in 2018. Amazon gave Best Buy exclusive rights to Fire TV platform, which is their smart TV platform, to be embedded into smart TVs. So, any smart TV with the Fire TV embedded in it, Best Buy is going to control that. It’s only going to be sold at Best Buy or by Best Buy and Amazon. And when we did the announcement for this deal, we did it in a store in Beverly, Washington, and Jeff came and we had some media there and Jeff said, TV is a considerate purchase. You got to see the TV. Best Buy is the best place in the world we you can do this. That’s why we’re doing the partnership and we built this stress-based relationship. And, of course, the media was — this was a jaw-dropping moment and Jeff is a very generous man. It’s interesting because it raises another question which is how do you think about competition. As you lead a company, do you obsess about competition or do you obsess about your customers and what you can become. And that’s one of the things that Jeff and and I share which is you obsess about your customers and becoming the best version of yourself you can be. Of course, at Best Buy, we look at Amazon. We wanted to — actually, in the sense, we neutralize them, right, because same prices, same great shopping experience and we ship as fast as they do. So, let’s call it a draw on the online business and then we have unique asset. And so, you’re not obsessed about your competition. In fact, in some cases, you partner with them and I think the world — other than the COVID pandemic, there’s another pandemic in the world which is the fear or the obsession about zero-sum games. The only way that Amazon could win is if Best Buy loses or vice versa. The only way this podcast can be successful, Barry, is if you win and I lose. That’s crazy, right? You get to collaborate and create great outcomes and I think in this world as leaders, we have to think about how we can create when win, win, win outcomes for our customers, our employees, our vendors, the community and ultimately, their shareholders. RITHOLTZ: And to put some flesh on those bones, some numbers on it, in 2007, before the financial crisis, Best Buy had done about $35 billion in revenue. In 2020, they were somewhere in the neighborhood of 47 billion and this year, I think the company is looking for an excess of 50 billion. So, clearly, that’s been heading in the right direction. Let’s talk a little bit about your experience on other boards. You’re in the board of directors of Johnson & Johnson and you’re on the board of directors at Ralph Lauren. What have you learned from those firms that were applicable to Best Buy and what do you bring to the table for those companies? JOLY: Yes. So, I joined — the first board I joined was Ralph Lauren in 2009 and I was the CEO of Carlson Companies, which was Carlson Wagonlit Travel, TGI Fridays and then a bunch of hotels, Regent and Radisson. The reason why I was interested in joining another board was to try to become a better CEO in the relationship with my board and sitting on somebody else’s board, you can see the needs of the board and then you can see how the CEO and their team are dealing with you. So, that was a great experience because when you become CEO and you deal with the board, you have zero experience, right, dealing with the board. So, that’s one of the things you learn on the job. So, that was a great way for me to learn. And these two companies, J&J and Ralph Lauren, they’re two amazing companies. J&J, I joined recently. I joined about 18 months ago. And so, watching Alex Gorsky and his team navigate the pandemic, their Credo-based approach. I mean, they’re the inventor of stakeholder capitalism before (inaudible), right, with their Credo that they created in 1943 that’s focused on all of the stakeholders. They’re one of the most innovative companies. So, they show the value of doing meaningful innovation for the benefit of, in their case, their patients. This is a wonderful entrepreneur. The company was founded in ’67 and it’s a great company, one of the most iconic brands on the planet. So, how do drive this and how do you balance left brain and right brain and, of course, enjoying cooperating with Patrice Louvet, the CEO, who is a terrific guy. And so, learning — I’m like a sponge, I love learning (ph) from others. What I bring, I would frame it along the lines of what I was looking for my board to do when I was CEO and I was not looking for the board to give me all of the answers and do my job, right? But I use the board — I wanted — I build a board that would give me complementary skills. So, I wanted to have the best people on the board that would have skills that would be additive to our management team and use the board as a sounding board to — I would get 80 percent of the value of the board meeting in preparation to the board meeting. And then getting reaction at the sounding board. When you are in the weed, sometimes, you’re missing something and then being able to access unique expertise from my board. So, what I try to bring on these boards is I try to be a resource for the management team, a sounding board, and helping them with their most important issues. I really enjoyed that. I’m in the state now where I started a new chapter as you highlighted, I’m no longer a CEO but it’s a matter of giving back and helping the next generation of leaders be the — become the best version of themselves they can be. So, I do that through boards and through executive education at Harvard Business School, also coach and mentor of a number of CEOs and executives. So, it’s — I just love doing that. RITHOLTZ: So, let’s talk a little bit about what you’re doing now. Tell us about the class you’re teaching at Harvard. JOLY: So, on Monday, August 30th, that is the first day of school for the incoming MBA class. So, I’m one of the professors in the first year. I teach marketing, which is about — it’s focused really on how do you grow a company focusing on the customers. So, that’s one of the things I do. I’m also part of the faculty that’s — as a program for new CEOs. So, twice per year with a small bunch of new CEOs, I did this when I became CEO, that come here for three days and we try to help them out. I’m also part of the faculty that’s doing a program called Leading Global Businesses and last but not the least, I’m really passionate about this, we’re designing and we’re going to pilot program for companies and then also in the MBA program called Putting Purpose to Work and Unleashing Human Magic. So, many companies on this purpose journey today. And so, there’s going to be a series of workshops for the top 30 people, custom programs, one company at a time, and we’re going to try to support them in their journey. We’re doing our first pilot this fall and to look forward to learning from that experience. And I think we’re just in the early innings of that new era of capitalism. So, so much to learn. I’m super excited to be part of that journey with a number of companies. RITHOLTZ: Quite interesting. I have to ask you the obvious question, is your book a book you assigned to your students? What do you have them read? JOLY: So, HBS is a school where there’s really not, for the most part, mandatory reading of any books. So, I know that last year, before the book was established, my wonderful Section E from the MBA program, they all got a copy of the manuscript and they had great conversations, too. Sometimes, the book gets distributed to the participants of the executive education programs. But in the MBA, there’s little mandatory reading. It’s all about, as you know, the case study methodology, which is a wonderful way to learn because it’s hard to learn just from reading. Reading, I mean, I encourage people to read the books for sure but it’s by practicing that you really learned, right? So, that’s the HBS way. RITHOLTZ: To say the very least. And one of the things that Bezos specifically mentioned was that he thought your turnarounds at Best Buy was going on eventually become a Harvard Business School case study. What are your thoughts on that? JOLY: Well, we’re actually working on that with Professor Gupta and it’s going to be taught for the first time. This is going to be fun, right? It’s going to be the last case of the marketing class in December. And so, of course, in my section, it’s going to be ironic. I’m going to be Professor Joly and I’m going to be one of the protagonists. There’s been other cases on Best Buy but this one is going to be much on the turnaround and transformation. So, that’s going to be fun. I’ve also taught it — we’ve also taught it in some of the executive education programs. So, Jeff – I know Jeff is right, there’s a Best Buy case now at Harvard Business School. RITHOLTZ: Really, really quite interesting. So, you mentioned purposeful leadership. Let’s delve into that a little bit. How does one become a purposeful leader who’s focused on creating the sort of environment where others can flourish and perform at their best? JOLY: Yes. This is, for me, such an important information and I grew up believing that as the leader, what was important was to be smart, right, where I went to school and to — some of the best schools and in the early years of my career, this is the left brain would highlight being the smartest person in the room. I’ve learned over the years that this is not what drives great outcome over time. I had an entire reflection and we slowed down. One of the things that is important to do is reflect on why do we work. Is work markedly a mixed reputation, right? We work — is work a punishment because some dude send in paradise, right, or is work something we do so that we can do something else that’s more fun or is work part of our fulfillment as a human being, part of our quest for meaning, right, to talk about Victor Frankl. And one of the things that I really invite myself to do and every leader to do is reflect on this. What’s going to be the meaning of my life professionally? How do I want to be remembered? One of the things we ask the CEOs to do in the CEO program in Harvard is write your retirement speech or with my wife when I — when we coach or mentor CEOs, we ask them to write their eulogy. What would you like other people to say on that day when you’re not here to listen? And I think this is so meaningful because people talk about the purpose of the corporation. I think it starts with our individual purpose, right, because motivation is intrinsic, right? And so, how can you lead others if you cannot lead your life and yourself? For me, that’s the beginning. And very practical, one of the turning points in our journey at Best buy, Barry, was every quarter, we would get together as an executive team for an offsite and one day, I asked every one of the executive team members to come to the offsite with a picture of themselves when they were little, maybe two or three years old. We got some really cute pictures, Barry, I can tell you that and over dinner, we spent the evening sharing with each other our life story and what drives us in life, what’s the meaning of our life. And what came out of that discussion, several things, one is we realized that all of us were human beings, not just a CFO or CMO or CHO, and that, with a couple of exceptions, all of us had the same kind of goals in life, which is it is the golden rule, do something good to other people. And that was transformational because we said, well, we’re the executive team of Best Buy. At that time, Best Buy — we had saved Best Buy and it was — where do we go from here? Why don’t we use Best Buy as a platform to do something good in the world and become a company that customers are going to love, employees are going to love, community is going to love and, of course, shareholders are going to continue to love. And so, there’s a similar idea in my mind which is connecting what drives us as individuals with the purpose of the company and the thing for companies that are embarked on the purpose journey, they write down their purpose but if they just try to cascade it down and communicate it to everybody and say, why don’t you — why aren’t you excited about this new purpose, right, it doesn’t work. We really have to start with what drives every individual and the company and then you realize that, yes, what is your role. So, in the book, I talked about the five Bs of purposeful leadership. The first B is be clear about your — what we are talking about, be clear about your own purpose, be clear about the purpose of people around you and how it connects with what you’re doing at the company. The second one is be clear about your role as a leader. It’s not to be the smartest person in the room but to create the environment in which others can be the best version of themselves. And, of course, if you’re leading a significant company and Best buy has more than 100,000 people, the only thing that happens is the thing that you decide that you come up with, you know it’s going to go far, right? So, it’s all about creating this environment which is significant mind shift. It’s also about — yes, Barry? RITHOLTZ: I was going to say, I’m struck by your comments and this comes through the book about showing vulnerability, inspiring people, embracing your humanity. I think back to the former CEO of General Electric, Jack Welch, whose nickname was Neutron Jack for how frequently he would lay off people and close divisions and fire other executives. When you were putting your philosophy to work at Best Buy, were you aware that this is a radical break from what had come before you? JOLY: Yes. And to quote — so, to go back to France in 1789, at the moment of the Storming of Bastille, there is Louis XVI asked La Rochefoucauld, is this a revolt, and La Rochefoucauld’s response says, no, sire, this is a revolution. And I think that’s what it is and it’s really shifting things. People are not the problem. They’re the source and they’re also the ultimate goal. And I think that most people agree with this, Barry, the challenge is not agreeing with this now, I think it’s really doing it and it’s — I can speak from experience. If you were to look at my face, you would see all of these scars on my face. Learning from experience and trying to get better at this is a lifelong journey of learning to be vulnerable. I was raised — being taught that I — you couldn’t say I don’t know and now, in the world we live, did you have a manual for the COVID pandemic, did you have a manual for back-to-the-office, Barry? No. So, it’s clear that we don’t know. So, we have to be able to say my name is Hubert and I need help and we’re going to work together to figure it out. So, there’s a C change in leadership, meaning from a place of purpose and with humanity and a great deal of humility. RITHOLTZ: So, I want to talk about the pandemic in a moment. I want to stick with this revolution that you mentioned. There’s a quote from the book that I really like, quote, “The Milton Friedman version of capitalism got us here. But now, this model is failing.” Explain to us how it got us here, why it’s failing now and what comes next. JOLY: I used this to highlight the idea which mainly has been Milton Friedman’s, only I get was the context when he spoke. But the obsession with profits being the only thing that matters is proven to be poisonous and excessive focus on profit is poisonous and there’s several reasons for this. One is when we look at the reported profit of the company — by the way, if anybody believes that U.S. GAAP really tries to equate economic performance, study your accounting again, it’s not even trying, it’s a set of principles. There’s many things that GAAP profit does not capture, including your negative impact on the environment or how well your sales force is trained. The other thing is that it focuses on an outcome. So, in medicine, the (inaudible) analogous is my MD was focused on my temperature, right, and I don’t want a doctor that’s purely focused on my temperature because maybe he’s going to put the thermometer in the fridge or in the oven, right, depending. I want somebody who’s going to be interested in what’s driving my health and try to help me get healthy. And so, we got confused by this obsession and that was (inaudible) and, of course, there’s extreme cases. Enron is one of them but — where we lost track of why we’re on this planet and responsibility with doing the right thing. So, this new model, the reinvention of business probably going back to some of our roots, right, with the idea that business is here to purse enabled (ph) purpose. And this is not about socialism, this is about doing something good in the world that could be responding to needs of customers in a way that’s responsible. It’s about putting people at the center embracing all of the stakeholders in a harmonious fashion, refusing zero-sum games and treating profit as an outcome. I think that’s the formula that’s employed by some of the best companies on the planet. And as leaders, we need to go back to that and to learn new things because we’re so influenced by some of the techniques we learned last century, including this top-down management approach and using it extensively. So, that’s something you’re going to learn over time. There’s research by the MIT that shows that financial incentive deteriorates performance, which is the opposite of what we’ve learned, right? But if you feed somebody with carrots and sticks, beware because you’re going to get a donkey, right? RITHOLTZ: Right. JOLY: And in a world where you need creativity and people to be their best, motivation is going to be intrinsic. So, that’s what you need to be able to touch and get to the environment where people want to be their best and make a meaningful contribution in their work. So, I think this is a very exciting phase. This is an urgent phase because I’m concerned probably like you and many others that we have a few ticking timebombs and I have three wonderful granddaughters. I want to do my best to try to, quote-unquote, “make the planet” be a better world, right, than the current trajectory. RITHOLTZ: And this is very consistent, I have a fuller understanding of your philosophy that profit should be an outcome and not just the goal in and of itself. You’ve really put some meat on those bones. JOLY: Yes. Thank you, Barry, and there’s practical implications of that again and starting your monthly business meetings or even your board meetings with people and organization and then customers and business and then basically (ph) with with financial results. You should take care of the first two, the profits will follow. So, it’s a significant practical and philosophical transformation. Talking about quotes here, we quoted Milton Friedman, but I love this quote from the Lebanese prophet, Kahlil Gibran, who said that work is love made visible. RITHOLTZ: That’s a wonderful quote. And let’s talk a little bit about visibility of some of the changes you did. By the time you stepped down from the board of directors in June of last year, Best Buy’s board of 13 directors had, for the first time ever, a majority of women and three African-American directors. Tell us how you brought about this increase of diversity. What about diversity throughout the rest of the company and what was the impact of so much inclusion and a shift away from the older homogenous types of boards? JOLY: I think, Barry, it’s clear for every one of us today that having diversity is going to get to a better business outcome and I do believe that has there been Lehman brothers and sisters instead of Lehman brothers, we would have had a different outcome. But if you also take it a very practical fashion, in one of our stores in Chicago that’s in the Polish neighborhood, if the blue shirts don’t speak Polish, they’re not going to sell much. RITHOLTZ: Right. JOLY: Or when we had Brazilian tourists in Orlando, the blue shirts didn’t speak Portuguese, they were not going to sell much. So, having diversity of every dimension, talent, skills, profiles, gender, race, the country’s color is changing very rapidly, it’s becoming black and brown, we have to represent — it’s very simple, we have to represent the diversity of the customers we serve. If we don’t, bad things happen. And so, there’s a business imperative, there’s also a moral imperative when we see the state of the country. So, from a gender standpoint, as I said, I have three granddaughters, I want them to have the best opportunities, and why would it make sense to only recruit from a quarter of the population, right? RITHOLTZ: Right. JOLY: The board’s — I’ll say the board’s composition was a great place to focus now. It’s not the only one. When we rebuilt the board study in 2013, we want to have the best skills. We were determined to be diverse. So, we had an early focus on gender diversity and when I started to focus more on ethnic diversity, probably starting in 2016, 2017, I met — I had a great meeting with Mellody Hobson of Ariel Investments and … RITHOLTZ: Sure. JOLY: … she’s now the Chair of Starbucks, everyone knows Mellody, she’s amazing, one of the things she told me is that people cannot be who they cannot see. And so, starting at the top and having a board that would signal the direction was important. So, what’s really — and changing the composition of the board is not that hard with only 10 or 12 or 13 people, how hard can it be? So, we told the headhunter don’t bother giving us resumes of non-black directors, right, and if you believe that you are unable to find great black candidates, well, say that’s OK, we won’t have a problem with that. We’ll just work with another firm. It’s not a problem. And so, we recruited three amazing directors and we got them on the board that they’ve concluded (ph) in this direction and I think it makes a huge difference. And, of course, Best Buy is headquartered in Minneapolis and following the killing — the murder of George Floyd, it’s pretty simple, if you — if the city is on fire, right, if the community is on fire, you just can’t open stores, right? You can’t run a business. RITHOLTZ: Right. JOLY: So, in this country, we have this big racial issue that has been going on for centuries. I think generation has the opportunity to end systemic racism and that’s something we, I think, business can play a big role in this. So, that was determined and that’s what we did. RITHOLTZ: Let’s jump to our favorite questions that we ask all our guest starting with tell us what you’re streaming these days, give us your favorite Netflix or Amazon Prime, what’s keeping you entertained during the pandemic? JOLY: I have so much electronic equipment in our place that I’m doing a lot of streaming. I love — I always listen to music. I’m a movie buff. I have a collection of probably 800 movies on my (inaudible) setup. Our favorite I would say recently has been “Good Doctor.” I think that’s Season 5, it’s starting at the end of September. We’re very excited about this. And then from a podcast standpoint, I like listening to HBR’s Idea Cast. That’s a weekly – a great weekly podcast. Whitney Johnson has a great leadership podcast called “Disrupt Yourself.” And then I have to mention, there’s a young teenager, well, teenager would be young anyway, right, but let’s call him a teenager, Logan Lin has got a FinanZe podcast that focused on the Z generation. My God, the guy is so cool. So, everybody joins and downloads FinanZe spelled F-I-N-A-N-Z-E and that’s Logan Lin. RITHOLTZ: Quite interesting. We hinted at some of your mentors but let’s jump into that in more depth. Tell us some of the people who helped to shape your career. JOLY: There’s so many, Barry. Jean-Marie Descarpentries, a client of mine, had this big influence on me teaching me so much about how to put people first and treating profits as an outcome. There were two great friends, yes, who happened to be monks in a religious congregation in the early ’90s. That was a turning point. They asked me to write a couple of articles with them on the theology and philosophy of work which is where I got a lot of my roots in terms of work as part of our search for meaning as individuals, as human beings. It changed my perspective on work. Another turning point, too, in my early 40s, you could say throughout the book, it was at the top of my first mountain, right, had been a partner at McKinsey & Company. I was on the executive team of Vivendi Universal, by many measures., I’ve been successful, right, except I think the top of that first mountain was very dry which was not fulfilling. There was no real meaning. So, I call it my midlife crisis, right? So, instead of going on to an island, I did — I stepped back and I did the spiritual exercises of Ignatius of Loyola. So, you could say the founder of the Jesuits, of course. You could say he was one of my mentors that was really helpful to help me discern my calling in life, which today or since then has been to try to make a positive difference on people around me and use the platform I have to make a positive difference in the world which is what I’m doing now teaching and mentoring and so forth. And then we mentioned Marshall Goldsmith, my first coach and a good friend. Later on, I also worked with Eric Pliner at YSC. When the board — so, Marshall was doing my annual — having that board with my annual evaluation and the board realized that Marshall and I were such good friends and said, we need somebody more objective now. And we got Eric Pliner, who is now the CEO of YSC, worked with me but also his firm works with every one of our executives and helps us with executive team’s effectiveness and that was quite transformative. You should have spent more time earlier on not just on building the right team but enhancing our team effectiveness and I learned a lot working with Eric in that journey. RITHOLTZ: Let’s talk a little bit about everybody’s favorite question, tell us about some of your favorite books and what are you reading right now. JOLY: I read three books this summer. The first one is by Rakesh Khurana who’s now the President of Harvard College and it’s called “From Higher Aims to Hired Hands” which is the history — exactly for me, the history of business education in the U.S. over the last 120 years and how the business school curriculum were saved and how — and why he believes and I do believe as well that we need to evolve it not just learning techniques but also with — it’s not just about learning something or learning to do something, it’s also learning to be, which is I think an entire journey. I also read “Caste” by Isabel Wilkerson and a book by my colleague, Tsedal Neeley, “Remote Work Revolution” which is, of course, a very timely book. Best book ever read, I have to mention Marcel Proust being French, “In Search of Lost Time.” It’s only 3,000 pages. So, if you have a minute or two, I encourage you to get to it. Victor Frankl’s “Man’s Search for Meaning” is another favorite. And you mentioned the Marshall Goldsmith’s “What Got You Here Won’t Get You There.” And finally, I have to mention my wife’s book called “Aligned: Becoming the Leader You’re Meant To Be” and her name is Hortense Le Gentil. It’s one of the best leadership books that I’ve ever read and, of course, a little bias maybe. RITHOLTZ: Maybe you’re a little bit bias. So, you work with grad students and college students, what sort of advice would you give to a recent college graduate who is interested in a career either as an executive or leadership or even in retail? JOLY: I think the advice is the same as we give the new CEOs is write your retirement speech or even better, write your eulogy. And I know my good friend John Donahoe, who’s now the CEO of Nike, did this when he graduated and he’s always kept it. And I understand he goes back to it every year and it’s hard. (Inaudible) between the ages of 26 and 34, early in your adult life, you don’t necessarily know everything but try to write it and see what journey you want to be on and how you want to be remembered. That would be one plot. RITHOLTZ: Quite interesting. And our final question, what do you know about the world’s of leadership and executive management today that you wish you knew a couple of decades ago when you were first getting started? JOLY: Well, there’s so much over the years. I think it has to do with profits being an outcome not the goal. It’s about importance of looking at drivers of performance. It’s about my role as a leader is not to be the smartest person in the room but to create the right environment. Not about being perfect. Nobody’s perfect. And I think the quest for — maybe I’ll finish with this, the quest for perfection can be very dangerous, can be evil, right, because if you’re trying to be perfect, guess what, you’re not going to be successful. You’re going to be incredibly demanding and harsh with people around you because you expect them to be perfect. And so, you have to be laxed and be kind with yourself and others around you and be able to open up and share what you are struggling with, understand what they’re struggling with and help each other out. That’s the — I think to me, that’s — it’s such an important consideration. The quest of perfection can be very dangerous. Be kind to yourself. During the pandemic, we learned so much, right? We used to fly around Barry, long time ago on planes, right, and we were told by the steward or the stewardess, if the oxygen mask comes down, put it on yourself first before you help others. So, as we continue to go through challenging time, taking care of yourself as a leader, making sure you meditate, you reflect, you exercise, you ask for help either from your personal board of directors, your best friends, that’s the key thing, that’s going to be the way that we can then help others. So, take care of yourself first. RITHOLTZ: Quite interesting. We have been speaking with Hubert Joly, former Chairman and CEO at Best Buy and currently a lecturer at Harvard Business School. Thank you, Hubert, for being so generous with your time. If you enjoy this conversation, be sure and check out any of our previous 376 former discussions that we’ve had. You can find those at iTunes, Spotify, Acast, wherever you feed your podcast fix. We love your comments, feedback and suggestions. Write to us at mibpodcast@bloomberg.net. You can sign up for my daily reads, you can find those at ritholtz.com. Follow me on Twitter @Ritholtz. I would be remiss if I did not thank the crack staff that helps put these conversations together each week, Charlie Vollmer is my audio engineer extraordinaire, Atika Valbrun is my project manager, Paris Wald is my producer, Michael Batnick is my researcher. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio   ~~~   The post Transcript: Hubert Joly appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureSep 27th, 2021

3 Ways ESG Regulation May Aid the Financial Industry

Environment, Social, Governance. These words have become rather ubiquitous in recent years, with just about every firm or financial institution touting their ESG practices. The United States ESG investment market alone grew 42% from 2018 to 2020, contributing $17.1 trillion of the $35.3 trillion total across five major investment markets. Q3 2021 hedge fund letters, […] Environment, Social, Governance. These words have become rather ubiquitous in recent years, with just about every firm or financial institution touting their ESG practices. The United States ESG investment market alone grew 42% from 2018 to 2020, contributing $17.1 trillion of the $35.3 trillion total across five major investment markets. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Unfortunately, these claims of sustainability or social consciousness can be shallow at best, deliberately misleading at worst, and governing bodies are starting to intervene. In the EU, for example, the Sustainable Finance Disclosure Regulation (SFDR) went into effect in March, 2021, requiring more detailed data reporting to add clarity for inventors when assessing the sustainability of investments. The U.S. is also considering similar regulations and penalties for false or inaccurate claims. While many firms may initially look at such policies as an administrative burden, increased ESG regulation could have numerous benefits for firms, investors, and the communities they serve. We’ll take a look at the existing and forecasted regulations on ESG investing and how such policies can benefit the industry moving forward. What Is ESG Finance? Before we dive into the regulations and their impacts, a note on terminology. ESG may have become somewhat of a buzzword, but what does it actually mean? Or rather, what is it supposed to mean? ESG as a concept has been around since at least the 1960s, though the name was coined in the early 2000s as an umbrella term for socially responsible investing practices. The E, S, and G refer to the following: Environment: This area is concerned with resource usage, pollution, and climate change. For example, how do companies perform on things like greenhouse gas emissions and waste reduction across the supply chain. Social: This refers to how companies interact with and impact the communities in which they operate. It includes everything from the health and safety of their employees and their suppliers’ employees to involvement in conflict regions. Governance: By this, we mean corporate governance - how are companies investing in diversity, ethics, etc. through their internal decision making. For example, equal pay, diversity of board members, and auditing for corruption would all be necessary for strong corporate governance. Where Do ESG Regulations Currently Stand? The European Union has taken a number of concrete steps to regulate sustainable investing. The aforementioned SFDR imposes mandatory disclosure obligations for asset managers and investment firms. It introduces the term Principal Adverse Impacts (PAIs) as a unit of sorts, defined as the negative impacts on sustainability that an investment decision could have. In other words, if a firm advises a client to invest in a certain stock, how harmful could that decision be in terms of the environment, society, employees, human rights, corruption, etc. With that in mind, the regulation mandates data disclosures including: How an entity integrates sustainability risks into their investment decision‐making or advising A statement of their policies on PAIs Proof that remuneration policies are made with sustainability risks in mind Evidence of pre-contractual disclosures on sustainability risk integration The EU is also implementing the Sustainable Finance Action Plan, aiming to redirect capital towards sustainable companies and green bonds and away from sectors involved with fossil fuels and other unsustainable practices. Finally, there is the EU Taxonomy Regulation which went into force in July, 2020, providing a classification system of conditions companies must meet to be considered environmentally sustainable. From January, 2022 onward, companies will be required to report how their financial products align with the Taxonomy. The US Securities and Exchange Commission has committed to developing similar regulations in the future, though what exactly those will contain has not been formalized. All in all, these types of regulations formalize requirements for ESG finance much like GDPR’s impact on data collection and PCI-DSS’s impact on the payment card industry. Any future regulations will only add more nuance to these broad regulations, further holding firms accountable for proving sustainable practices. How ESG Regulations Can Help SFDR and similar policies are not the first example of increasing government oversight of industry giants in recent years, and it will not be the last. So, it’s in the best interest of stakeholders to consider how such regulations can benefit their companies and their customers. Decrease Greenwashing There is no doubt that erroneously claiming ESG practices is a form of greenwashing, a harmful practice of overestimating the sustainability or eco-friendliness of a product or company. The ethical implications of this are hopefully obvious, both in terms of misleading clients and of the environmental and societal determinants. Therefore, a cultural shift to decrease financial greenwashing is ultimately beneficial because it gives credit where credit is due. If firms who are inflating their ESG compliance are called out, it will highlight the ones who are taking legitimate efforts to consider PAIs in their financial advising and internal decision-making. Over the longer term, clients will recognize this differentiating factor and align themselves accordingly. Force Firms To Look Internally While mandated ESG reporting will require additional input at the outset, it can also help firms reevaluate some of their current practices. For example, some firms may realize that investor relations are not prioritized in their current operations. Similarly, preparing for ESG data reporting will highlight the importance of maintaining transparent, responsible accounting practices, including using software that comes with critical features such as transaction monitoring and comprehensive reporting. Without using the right tools, firms will have a more difficult time assessing and proving their ESG compliance. Take the new regulations as an opportunity to develop an in-depth roadmap of your business risks, opportunities, partners, etc. Look at who you work with and how it reflects on your business. By auditing yourself and your partners before regulations become fully mandatory, you will be better situated to meet industry standards and improve your reporting, data management, risk management, investor relations, and more. Improve Outlooks In The Long Run When it comes to the finance market, while there are some more consistent trends, there is also a lot of uncertainty. That’s because market fluctuations are largely based on future trends - in a sense, attempting to predict the future. And lately, it appears that one of those trends is an increasing push for making ESG mandatory. Over the past 50 years or so, it has been a voluntary action, but with regulations increasing, it is becoming less so. This means there will only be greater scrutiny towards unsustainable sectors moving forward, and companies will need to respond if they hope to survive. For example, the tech sector has been criticized by environmental groups and even their own customers and investors for high consumption levels due to the electricity needed for data storage and processing. This and other industries are now pushing to reduce their carbon emissions. Many companies are also making other ESG steps a priority, such as increasing the diversity of the still overwhelmingly white, male leadership of the sector. These efforts show that companies will respond to pressure, even if change can be slow. Reporting these efforts is important to encourage firms to factor in ESG risk as a determining factor in how investors can find value in a company. What’s more, firms should take note that younger generations - namely Millenials and Gen Z - are increasingly socially conscious consumers. According to industry expert Alex Williams of Hosting Data, savvy investors are now taking advantage of online trading to educate themselves and invest responsibility. “It's not possible to make a stock exchange without a broker,” says Williams. “There's nowhere to visit to make a trade yourself. Most trading is done this way, even though - on television - you see people making purchases in New York's financial district.” Younger generations are well aware of this, and they are starting to invest earlier in life than their parents and grandparents, aided by digital resources. Therefore, ESG reporting will encourage increased accountability, which could in turn reward sustainable companies with new customers and growth potential in the future. Conclusion What the EU has started will undoubtedly spread elsewhere. This means, along with recent trends like increased cryptocurrency regulation and similar government interventions, ESG regulations may be the next policy surge for firms to comply with. What began with data disclosure could end in even more significant policy shifts across the finance sector. Firms must be ready to adapt if they hope to be compliant and competitive in an increasingly socially conscious market. Updated on Oct 27, 2021, 5:17 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalk3 hr. 11 min. ago

Escobar: The World According To Vladimir Putin

Escobar: The World According To Vladimir Putin Authored by Pepe Escobar via The Asia Times, Russian president, in Sochi, lays down the law in favor of conservatism – says the woke West is in decline... The plenary session is the traditional highlight of the annual, must-follow Valdai Club discussions – one of Eurasia’s premier intellectual gatherings. Vladimir Putin is a frequent keynote speaker. In Sochi this year, as I related in a previous column, the overarching theme was “global shake-up in the 21st century: the individual, values and the state.” Putin addressed it head on, in what can already be considered one of the most important geopolitical speeches in recent memory (a so-far incomplete transcript can be found here) – certainly his strongest moment in the limelight. That was followed by a comprehensive Q&A session (starting at 4:39:00). Predictably, assorted Atlanticists, neocons and liberal interventionists will be apoplectic. That’s irrelevant. For impartial observers, especially across the Global South, what matters is to pay very close attention to how Putin shared his worldview – including some very candid moments. Right at the start, he evoked the two Chinese characters that depict “crisis” (as in “danger”) and “opportunity,” melding them with a Russian saying: “Fight difficulties with your mind. Fight dangers with your experience.” This elegant, oblique reference to the Russia-China strategic partnership led to a concise appraisal of the current chessboard: The re-alignment of the balance of power presupposes a redistribution of shares in favor of rising and developing countries that until now felt left out. To put it bluntly, the Western domination of international affairs, which began several centuries ago and, for a short period, was almost absolute in the late 20th century, is giving way to a much more diverse system. That opened the way to another oblique characterization of hybrid warfare as the new modus operandi: Previously, a war lost by one side meant victory for the other side, which took responsibility for what was happening. The defeat of the United States in the Vietnam War, for example, did not make Vietnam a “black hole.” On the contrary, a successfully developing state arose there, which, admittedly, relied on the support of a strong ally. Things are different now: No matter who takes the upper hand, the war does not stop, but just changes form. As a rule, the hypothetical winner is reluctant or unable to ensure peaceful post-war recovery, and only worsens the chaos and the vacuum posing a danger to the world. A disciple of Berdyaev In several instances, especially during the Q&A, Putin confirmed he’s a huge admirer of Nikolai Berdyaev. It’s impossible to understand Putin without understanding Berdyaev (1874-1948), who was a philosopher and theologian – essentially, a philosopher of Christianity. In Berdyaev’s philosophy of history, the meaning of life is defined in terms of the spirit, compared with secular modernity’s emphasis on economics and materialism. No wonder Putin was never a Marxist. For Berdyaev, history is a time-memory method through which man works toward his destiny. It’s the relationship between the divine and the human that shapes history. He places enormous importance on the spiritual power of human freedom. Nikolai Berdyaev. Photo: Center for Sophiological Studies Putin made several references to freedom, to family – in his case, of modest means – and to the importance of education; he heartily praised his apprenticeship at Leningrad State University. In parallel, he absolutely destroyed wokeism, transgenderism and cancel culture promoted “under the banner of progress.” This is only one among a series of key passages: We are surprised by the processes taking place in countries that used to see themselves as pioneers of progress. The social and cultural upheavals taking place in the United States and Western Europe are, of course, none of our business; we don’t interfere with them. Someone in the Western countries is convinced that the aggressive erasure of whole pages of their own history – the “reverse discrimination” of the majority in favor of minorities, or the demand to abandon the usual understanding of such basic things as mother, father, family or even the difference between the sexes – that these are, in their opinion, milestones of the movement toward social renewal. So a great deal of his 40 minute-long speech, as well as his answers, codified some markers of what he previously defined as “healthy conservatism”: Now that the world is experiencing a structural collapse, the importance of sensible conservatism as a basis for policy has increased many times over, precisely because the risks and dangers are multiplying and the reality around us is fragile. Switching back to the geopolitical arena, Putin was adamant that “we are friends with China. But not against anyone.” Geoeconomically, he once again took time to engage in a masterful, comprehensive – even passionate – explanation of how the natural gas market works, coupled with the European Commission’s self-defeating bet on the spot market, and why Nord Stream 2 is a game-changer. Afghanistan During the Q&A, scholar Zhou Bo from Tsinghua University addressed one of the key, current geopolitical challenges. Referring to the Shanghai Cooperation Organization, he pointed out that, “if Afghanistan has a problem, the SCO has a problem. So how can the SCO, led by China and Russia, help Afghanistan?” Putin stressed four points in his answer: The economy must be restored; The Taliban must eradicate drug trafficking; The main responsibility should be assumed “by those who had been there for 20 years” – echoing the joint statement  after the meeting between the extended troika and the Taliban in Moscow on Wednesday; and Afghan state funds should be unblocked. He also mentioned, indirectly, that the large Russian military base in Tajikistan is not a mere decorative prop. Training bunker at Russia’s military base in Takikistan. Photo: Moscow Times Putin went back to the subject of Afghanistan during the Q&A, once again stressing that NATO members should not “absolve themselves from responsibility.” He reasoned that the Taliban “are trying to fight extreme radicals.” On the “need to start with the ethnic component,” he described Tajiks as accounting for 47% of the overall Afghan population – perhaps an over-estimation but the message was on the imperative of an inclusive government. He also struck a balance: As much as “we are sharing with them [the Taliban] a view from the outside,” he made the point that Russia is “in contact with all political forces” in Afghanistan – in the sense that there are contacts with former government officials like Hamid Karzai and Abdullah Abdullah and also Northern Alliance members, now in the opposition, who are self-exiled in Tajikistan. Those pesky Russians Now compare all of the above with the current NATO circus in Brussels, complete with a new “master plan to deter the growing Russian threat.” No one ever lost money underestimating NATO’s capacity to reach the depths of inconsequential stupidity. Moscow does not even bother to talk to these clowns anymore: as Foreign Minister Sergey Lavrov has pointed out, “Russia will no longer pretend that some changes in relations with NATO are possible in the near future.” Moscow from now on only talks to the masters – in Washington. After all, the direct line between the Chief of General Staff, General Gerasimov, and NATO’s Supreme Allied Commander, General Todd Wolters, remains active. Messenger boys such as Stoltenberg and the massive NATO bureaucracy in Brussels are deemed irrelevant. This happens, in Lavrov’s assessment, right after “all our friends in Central Asia” have been “telling us that they are against … approaches either from the United States or from any other NATO member state” promoting the stationing of any imperial “counter-terrorist” apparatus in any of the “stans” of Central Asia. And still the Pentagon continues to provoke Moscow. Wokeism-lobbyist-cum-Secretary of Defense Lloyd “Raytheon” Austin, who oversaw the American Great Escape from Afghanistan, is now pontificating that Ukraine should de facto join NATO. That should be the last stake impaling the “brain-dead” (copyright Emmanuel Macron) zombie, as it meets its fate raving about simultaneous Russian attacks on the Baltic and Black Seas with nuclear weapons. Tyler Durden Sun, 10/24/2021 - 23:30.....»»

Category: blogSource: zerohedgeOct 25th, 2021

Penns Woods Bancorp, Inc. Reports Third Quarter 2021 Earnings

WILLIAMSPORT, Pa., Oct. 22, 2021 (GLOBE NEWSWIRE) -- Penns Woods Bancorp, Inc. (NASDAQ:PWOD) Penns Woods Bancorp, Inc. achieved net income of $11.2 million for the nine months ended September 30, 2021, resulting in basic and diluted earnings per share of $1.58. Highlights Net income, as reported under GAAP, for the three and nine months ended September 30, 2021 was $4.1 million and $11.2 million, respectively, compared to $4.5 million and $11.3 million for the same periods of 2020. Results for the three and nine months ended September 30, 2021 compared to 2020 were impacted by a decrease in after-tax securities gains of $767,000 (from a gain of $799,000 to a gain of $32,000) for the three month period and a decrease in after-tax securities gains of $739,000 (from a gain of $975,000 to a gain of $236,000) for the nine month period. The provision for loan losses decreased $570,000 and $1.1 million, respectively, for the three and nine months ended September 30, 2021, to $75,000 and $940,000 compared to $645,000 and $2.0 million for the 2020 periods. The provision for loan losses was elevated in 2020 due primarily to the uncertainty caused by the COVID-19 pandemic. Basic and diluted earnings per share for the three and nine months ended September 30, 2021 were $0.58 and $1.58, respectively. Basic and diluted earnings per share for the three and nine months ended September 30, 2020 were $0.63 and $1.61, respectively. Return on average assets was 0.86% for three months ended September 30, 2021, compared to 0.97% for the corresponding period of 2020. Return on average assets was 0.79% for the nine months ended September 30, 2021, compared to 0.85% for the corresponding period of 2020. Return on average equity was 9.85% for the three months ended September 30, 2021, compared to 11.05% for the corresponding period of 2020. Return on average equity was 9.17% for the nine months ended September 30, 2021, compared to 9.57% for the corresponding period of 2020. COVID-19 Activity Approximately one third of employees working remotely. As of September 30, 2021, loan modification/deferral program in place to defer payments up to 180 days for principal and/or interest with only $1.3 million in loan principal remaining in deferral. All COVID-19 related loan deferrals meet the requirements to not be considered a troubled debt restructuring. Participated in the Paycheck Protection Program ("PPP") by primarily utilizing third parties to service and place the loans. Significantly reduced deposit rates during the latter half of March 2020 continuing through September 2021. Total paycheck protection program loans originated to be held on balance sheet totaled $30.6 million with $10.6 million remaining on the balance sheet at September 30, 2021. Net Income Net income from core operations ("core earnings"), which is a non-generally accepted accounting principles (GAAP) measure of net income excluding net securities gains or losses, was $4.1 million for the three months ended September 30, 2021 compared to $3.7 million for the same period of 2020. Core earnings were $10.9 million for the nine months ended September 30, 2021, compared to $10.3 million for the same period of 2020. Core earnings per share for the three months ended September 30, 2021 were $0.58 basic and diluted, compared to $0.52 basic and diluted core earnings per share for the same period of 2020. Core earnings per share for the nine months ended September 30, 2021 were $1.55 basic and diluted, compared to $1.47 basic and diluted for the same period of 2020. Core return on average assets and core return on average equity were 0.86% and 9.78% for the three months ended September 30, 2021, compared to 0.79% and 9.08% for the corresponding period of 2020. Core return on average assets and core return on average equity were 0.77% and 8.98% for the nine months ended September 30, 2021 compared to 0.78% and 8.75% for the corresponding period of 2020. A reconciliation of the non-GAAP financial measures of core earnings, core return on assets, core return on equity, and core earnings per share described in this press release to the comparable GAAP financial measures is included at the end of this press release. Net Interest Margin The net interest margin for the three and nine months ended September 30, 2021 was 2.85% and 2.84%, compared to 2.76% and 2.97% for the corresponding period of 2020. The increase in the net interest margin for the nine month period was driven by a decrease in the yield of the loan portfolio of 19 and 32 basis points ("bps"), while the investment portfolio yield declined 51 and 59 bps, respectively, during the current low interest rate environment. Further compressing the net interest margin was the significant increase of interest-bearing deposits. These deposits carry a current yield of a few basis points and have increased in average balance as commercial customers have received PPP funding and retail customers have received stimulus funding. Rates paid on interest-bearing deposit liabilities decreased 48 and 53 bps as rates paid were decreased significantly during 2020 due to the economic impact of COVID-19 prolonging the low interest rate environment. These deposit rate decreases have partially offset the decline in earning asset yield. Assets Total assets increased $70.0 million to $1.9 billion at September 30, 2021 compared to September 30, 2020.  Cash and cash equivalents increased significantly due to deposit growth resulting from the various economic recovery programs instituted at the state and federal levels that impacted both commercial and retail customers, coupled with customers becoming more risk averse and seeking safety in a bank deposit. Net loans decreased $3.0 million to $1.3 billion at September 30, 2021 compared to September 30, 2020, as the COVID-19 business and travel restrictions and supply chain interruptions curtailed various lending activities such as indirect auto, home equity, and commercial. Lending activity began to rebound as business and travel restrictions were lessened during the second half of 2020 and continues to rebound in 2021. The investment portfolio increased $16.7 million from September 30, 2020 to September 30, 2021 as a portion of the excess cash liquidity was invested into short-term municipal bonds. Non-performing Loans The ratio of non-performing loans to total loans ratio decreased to 0.58% at September 30, 2021 from 0.78% at September 30, 2020 as non-performing loans have decreased to $7.8 million at September 30, 2021 from $10.6 million at September 30, 2020, primarily due to a commercial loan relationship that was paid-off during the fourth quarter of 2020. The majority of non-performing loans involve loans that are either in a secured position and have sureties with a strong underlying financial position or have a specific allocation for any impairment recorded within the allowance for loan losses. Net loan charge-offs of $186,000 for the nine months ended September 30, 2021 impacted the allowance for loan losses, which was 1.08% of total loans at September 30, 2021 compared to 1.00% at September 30, 2020. Deposits Deposits increased $101.2 million to $1.6 billion at September 30, 2021 compared to September 30, 2020. Noninterest-bearing deposits increased $47.6 million to $481.9 million at September 30, 2021 compared to September 30, 2020.  Driving deposit growth was the receipt of PPP funding by commercial customers, stimulus funding by retail customers, and customers becoming more risk averse and seeking safety in a bank deposit. Emphasis remains on increasing the utilization of electronic (internet and mobile) deposit banking among our customers. Utilization of internet and mobile banking has increased since the start of 2020 due to these efforts coupled with a change in consumer behavior due to the business and travel restrictions caused by the COVID-19 pandemic. The increased level of deposits has allowed for a decrease in short and long-term borrowings. Shareholders' Equity Shareholders' equity increased $6.1 million to $168.5 million at September 30, 2021 compared to September 30, 2020.  Accumulated other comprehensive loss of $2.0 million at September 30, 2021 increased from a loss of $678,000 at September 30, 2020 primarily as a result of a decrease of $936,000 in the net unrealized gain on available for sale securities. The current level of shareholders' equity equates to a book value per share of $23.84 at September 30, 2021 compared to $23.05 at September 30, 2020, and an equity to asset ratio of 8.82% at September 30, 2021 and September 30, 2020. Dividends declared for the nine months ended September 30, 2021 and 2020 were $0.96 per share.. Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates eighteen branch offices providing financial services in Lycoming, Clinton, Centre, Montour, Union, and Blair Counties, and Luzerne Bank, which operates eight branch offices providing financial services in Luzerne County, and United Insurance Solutions, LLC, which offers insurance products.  Investment and insurance products are offered through Jersey Shore State Bank's subsidiary, The M Group, Inc. D/B/A The Comprehensive Financial Group. NOTE:  This press release contains financial information determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles ("GAAP").  Management uses the non-GAAP measure of net income from core operations in its analysis of the company's performance. This measure, as used by the Company, adjusts net income determined in accordance with GAAP to exclude the effects of special items, including significant gains or losses that are unusual in nature such as net securities gains and losses. Because these certain items and their impact on the Company's performance are difficult to predict, management believes presentation of financial measures excluding the impact of such items provides useful supplemental information in evaluating the operating results of the Company's core businesses. These disclosures should not be viewed as a substitute for net income determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. This press release may contain certain "forward-looking statements" including statements concerning plans, objectives, future events or performance and assumptions and other statements, which are statements other than statements of historical fact.  The Company cautions readers that the following important factors, among others, may have affected and could in the future affect actual results and could cause actual results for subsequent periods to differ materially from those expressed in any forward-looking statement made by or on behalf of the Company herein: (i) the effect of changes in laws and regulations, including federal and state banking laws and regulations, and the associated costs of compliance with such laws and regulations either currently or in the future as applicable; (ii) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as by the Financial Accounting Standards Board, or of changes in the Company's organization, compensation and benefit plans; (iii) the effect on the Company's competitive position within its market area of the increasing consolidation within the banking and financial services industries, including the increased competition from larger regional and out-of-state banking organizations as well as non-bank providers of various financial services; (iv) the effect of changes in interest rates; (v) the effects of health emergencies, including the spread of infectious diseases or pandemics; or (vi) the effect of changes in the business cycle and downturns in the local, regional or national economies.  For a list of other factors which could affect the Company's results, see the Company's filings with the Securities and Exchange Commission, including "Item 1A.  Risk Factors," set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020. You should not place undue reliance on any forward-looking statements.  These statements speak only as of the date of this press release, even if subsequently made available by the Company on its website or otherwise.  The Company undertakes no obligation to update or revise these statements to reflect events or circumstances occurring after the date of this press release. Previous press releases and additional information can be obtained from the Company's website at www.pwod.com. Contact: Richard A. Grafmyre, Chief Executive Officer   110 Reynolds Street   Williamsport, PA 17702   570-322-1111 e-mail: pwod@pwod.com             PENNS WOODS BANCORP, INC.CONSOLIDATED BALANCE SHEET(UNAUDITED)     September 30, (In Thousands, Except Share Data)   2021   2020   % Change ASSETS:             Noninterest-bearing balances   $ 35,523       $ 34,987       1.53   % Interest-bearing balances in other financial institutions   206,124       191,285       7.76   % Federal funds sold   40,000       —       n/a Total cash and cash equivalents   281,647       226,272       24.47   %               Investment debt securities, available for sale, at fair value   166,760       149,675       11.41   % Investment equity securities, at fair value   1,263       1,291       (2.17 ) % Investment securities, trading   40       35       14.29   % Restricted investment in bank stock, at fair value   14,649       15,006       (2.38 ) % Loans held for sale   3,246       6,647       (51.17 ) % Loans   1,347,225       1,349,140       (0.14 ) % Allowance for loan losses   (14,557 )     (13,429 )     8.40   % Loans, net   1,332,668       1,335,711       (0.23 ) % Premises and equipment, net   34,434       32,886       4.71   % Accrued interest receivable   8,529       8,540       (0.13 ) % Bank-owned life insurance   33,836       33,474       1.08   % Investment in limited partnerships   5,014       2,524       98.65   % Goodwill   17,104       17,104       —   % Intangibles   524       724       (27.62 ) % Operating lease right of use asset   2,899       3,184       (8.95 ) % Deferred tax asset   4,049       3,409       18.77   % Other assets   4,129       4,297       (3.91 ) % TOTAL ASSETS   $ 1,910,791       $ 1,840,779       3.80   %               LIABILITIES:             Interest-bearing deposits   $ 1,111,144       $ 1,057,562       5.07   % Noninterest-bearing deposits   481,875       434,248       10.97   % Total deposits   1,593,019       1,491,810       6.78   %               Short-term borrowings   9,404       15,009       (37.34 ) % Long-term borrowings   126,007       153,534       (17.93 ) % Accrued interest payable   828       1,491       (44.47 ) % Operating lease liability   2,947       3,219       (8.45 ) % Other liabilities   10,105       13,287       (23.95 ) % TOTAL LIABILITIES   1,742,310       1,678,350       3.81   %               SHAREHOLDERS' EQUITY:             Preferred stock, no par value, 3,000,000 shares authorized; no shares issued   —       —       n/a Common stock, par value $5.55, 22,500,000 shares authorized; 7,545,922 and 7,527,605 shares issued; 7,065,697 and 7,047,380 shares outstanding   41,921       41,820       0.24   % Additional paid-in capital   53,508       52,268       2.37   % Retained earnings   87,146       81,127       7.42   % Accumulated other comprehensive gain (loss):             Net unrealized gain on available for sale securities   3,504       4,440       (21.08 ) % Defined benefit plan   (5,486 )     (5,118 )     7.19   % Treasury stock at cost, 480,225   (12,115 )     (12,115 )     —   % TOTAL PENNS WOODS BANCORP, INC. SHAREHOLDERS' EQUITY   168,478       162,422       3.73   % Non-controlling interest   3       7       (57.14 ) % TOTAL SHAREHOLDERS' EQUITY   168,481       162,429       3.73   % TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 1,910,791       $ 1,840,779       3.80   %                                   PENNS WOODS BANCORP, INC.CONSOLIDATED STATEMENT OF INCOME(UNAUDITED)     Three Months Ended September 30,   Nine Months Ended September 30, (In Thousands, Except Per Share Data)   2021   2020   % Change   2021   2020   % Change INTEREST AND DIVIDEND INCOME:                         Loans including fees   $ 13,382       $ 14,080       (4.96 ) %   $ 39,826       $ 43,403       (8.24 ) % Investment securities:                         Taxable   834       925       (9.84 ) %   2,491       2,958       (15.79 ) % Tax-exempt   160       170       (5.88 ) %   495       484       2.27   % Dividend and other interest income   338       212       59.43   %   903       747       20.88   % TOTAL INTEREST AND DIVIDEND INCOME   14,714       15,387       (4.37 ) %   43,715       47,592       (8.15 ) %                           INTEREST EXPENSE:                         Deposits   1,308       2,569       (49.09 ) %   4,481       8,406       (46.69 ) % Short-term borrowings   3       8       (62.50 ) %   7       37       (81.08 ) % Long-term borrowings   771       965       (20.10 ) %   2,430       2,893       (16.00 ) % TOTAL INTEREST EXPENSE   2,082       3,542       (41.22 ) %   6,918       11,336       (38.97 ) %                           NET INTEREST INCOME   12,632       11,845       6.64   %   36,797       36,256       1.49   %                           PROVISION FOR LOAN LOSSES   75       645       (88.37 ) %   940       2,040       (53.92 ) %                           NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES   12,557       11,200       12.12   %   35,857       34,216       4.80   %                           NON-INTEREST INCOME:                         Service charges   456       388       17.53   %   1,218       1,249       (2.48 ) % Debt securities gains, available for sale   48       1,013       (95.26 ) %   323       1,220       (73.52 ) % Equity securities (losses) gains   (6 )     —       n/a   (25 )     30       (183.33 ) % Securities (losses) gains, trading   (2 )     (2 )     —   %   1       (16 )     106.25   % Bank-owned life insurance   279       156       78.85   %   614       492       24.80   % Gain ...Full story available on Benzinga.com.....»»

Category: earningsSource: benzingaOct 22nd, 2021

CapStar Reports Third Quarter 2021 Results and Chattanooga Expansion

NASHVILLE, Tenn., Oct. 21, 2021 (GLOBE NEWSWIRE) -- CapStar Financial Holdings, Inc. ("CapStar") (NASDAQ:CSTR) today reported net income of $13.1 million or $0.59 per diluted share, for the quarter ended September 30, 2021, compared with net income of $12.1 million or $0.54 per diluted share, for the quarter ended June 30, 2021, and net income of $7.5 million or $0.34 per diluted share, for the quarter ended September 30, 2020. Annualized return on average assets and return on average equity for the quarter ended September 30, 2021 were 1.64 percent and 14.13 percent, respectively. For the nine months ended September 30, 2021, the Company reported net income of $36.2 million or $1.63 per diluted share, compared with $15.0 million or $0.77 per diluted share, for the same period of 2020. Year to date 2021 annualized return on average assets and return on average equity were 1.56 percent and 13.48 percent, respectively. Four Key Drivers   Targets   3Q21   2Q21   3Q20 Annualized revenue growth   > 5%   20.49 %   8.96 %   83.00 % Net interest margin   ≥ 3.60%   3.12 %   3.26 %   2.72 % Efficiency ratio   ≤ 55%   53.06 %   57.97 %   65.99 % Annualized net charge-offs to average loans   ≤ 0.25%   0.05 %   0.01 %   0.00 % Concurrently, the Company announced the hiring of a team of nine experienced financial professionals to grow market share and serve clients in Chattanooga, TN. The group includes five Commercial Relationship Managers who will deliver CapStar's banking solutions to businesses, their owners, professionals, and real estate investors; one senior credit officer; one office leader, and two support and processing associates. Brian Paris, former Financial Advisor at Pinnacle Financial Partners, will serve as CapStar's Chattanooga market president. Paris has twenty years of banking experience within the Chattanooga region, including the past eleven at CapitalMark/Pinnacle where he has been a key contributor in creating the metro area's fourth largest bank, according to FDIC deposit share data. "Third quarter marks two milestone events as we report record earnings and announce our exciting Chattanooga expansion," said Timothy K. Schools, President and Chief Executive Officer of CapStar. "Originating from twenty-four months of tremendous focus on strategic alignment and execution, our associates are delivering winning results, improved profitability, and enhanced growth. I could not be more proud of our team and nothing illustrates their efforts more than the positive trends of our four key drivers and recent recognition by Piper Sandler as one of their 2021 Sm-All Stars." "In the summer of 2019, we established four clear strategic objectives: 1) enhance profitability and earnings consistency, 2) accelerate organic growth, 3) maintain sound risk management, and 4) execute disciplined capital allocation. Complimenting the first three objectives, we are rapidly expanding our customer-centric banking model in attractive, high-growth markets through the hiring of top-tier talent. At the outset of 2020, we expanded to Knoxville where our team's loan commitments now exceed $150 million. This summer, we added one of Nashville's highest volume mortgage loan originators. Today, we are thrilled to welcome Brian Paris and his former teammates, who are among Chattanooga's banking leaders. As we speak with bankers across the state, CapStar's capabilities, size, customer responsiveness, and flexibility are attractive to high-quality talent seeking an organization where they can better serve their customers and have a greater relative impact." "As we plan for the new year, I am very encouraged by CapStar's positioning and prospects to become one of Tennessee's great banks. Tennessee's fifth largest bank by assets, CapStar is leveraging the inherent advantage of operating in one of the best states in the nation to do business and live, has strategically positioned itself in three of the Southeast's most dynamic markets where population and household income are growing faster than national averages, has one of the industry's youngest and most experienced management teams, and is executing a focused business model that produces strong financial results. Having significant excess liquidity and capital, we are focused on strategic initiatives that take advantage of market opportunities to significantly improve our return on tangible equity, earnings per share, and book value per share over time." RevenueTotal revenue, defined as net interest income plus noninterest income, increased $1.7 million to $34.6 million from the prior quarter. Net interest income totaled $23.0 million, flat compared to the second quarter of 2021. Third quarter 2021 noninterest income totaled $11.7 million, an increase of $1.8 million from the prior quarter. The increase was attributable to continued strong performance within the Company's Mortgage, SBA Lending, and Tri-Net divisions. Third quarter 2021 average earning assets increased to $2.93 billion compared to $2.85 billion at June 30, 2021. Average loans held for investment, excluding PPP balances, increased $24.6 million from the prior quarter, or 5.5 percent linked-quarter annualized. Loan growth continued to accelerate during the third quarter of 2021 with end of period loans held for investment, excluding PPP balances, increasing $42.2 million, or 9.4 percent linked-quarter annualized. Due to a significant increase in deposits over the past year, average loans as a percentage of average earning assets declined to 64.31 percent for third quarter 2021. The Company's commercial loan pipeline remains strong, exceeding $400 million, presenting the Company a tremendous opportunity to utilize current excess liquidity and capital to grow revenue and net income. The Company's net interest margin continues to be positively and negatively impacted from the effects of the recent pandemic. For the third quarter of 2021, the net interest margin decreased 14 basis points from the prior quarter to 3.12 percent resulting principally from a reduction in revenues related to PPP forgiveness. Adjusting for the influence of PPP and excess deposits accumulated over the past year, the Company estimates its third quarter 2021 net interest margin was 3.36 percent, unchanged compared to the second quarter of 2021.  The Company's average deposits totaled $2.73 billion in the third quarter of 2021, an increase of $70.0 million compared to June 30, 2021. The Company experienced an increase of $39.9 million in average interest-bearing deposits offset by a $17.9 million reduction in higher cost time deposits. While in the short-term the Company is experiencing a period of excess liquidity, a key longer-term strategic initiative is to create a stronger deposit-led culture with an emphasis on lower cost relationship-based deposits. During the quarter, the Company's lowest cost deposit category, noninterest bearing, increased $30.1 million on average from the prior quarter, or 16.55 percent linked-quarter annualized. Overall deposit costs declined 2 basis points to 0.19 percent. Noninterest income during the quarter benefitted from record SBA and Tri-Net revenues, contributing $0.5 and $0.4 million improvements, respectively, when compared to the quarter ended June 30, 2021. Mortgage revenues remain strong increasing $0.8 million compared to the quarter ended June 30, 2021 to $4.7 million for the quarter ended September 30, 2021. Noninterest Expense and Operating Efficiency Noninterest expenses decreased $0.7 million from the second quarter of 2021 to $18.4 million in the third quarter of 2021. The third quarter noninterest expense decrease benefitted from a $0.4 million reduction in data processing fees related to decreases in processing of PPP loans and the absence of $0.3 million in acquisition related expenses incurred during the second quarter. Efficiency is a key driver for the Company. The Company uses three metrics to monitor its performance relative to peers: efficiency ratio (noninterest expense as a percentage of total revenue), noninterest expense as a percentage of assets, and assets per employee. For the quarter ended September 30, 2021, the efficiency ratio was 53.06 percent, a decrease from 57.97 percent in the second quarter of 2021. Annualized noninterest expense as a percentage of average assets decreased to 2.30 percent for the quarter ended September 30, 2021 compared to 2.49 percent for the quarter ended June 30, 2021. Assets per employee decreased to $7.9 million as of September 30, 2021 compared to $8.4 million for the previous quarter. The continued favorable trend in operating efficiency metrics demonstrates the Company's commitment, ability, and success in controlling its costs in accordance with its four key strategic initiatives. Asset Quality Asset quality is a core tenant of the Company's culture. Continued sound risk management and an improving economy led to continued low net charge-offs and strong credit metrics. Annualized net charge offs to average loans for the three months ended September 30, 2021, were 0.05 percent. Past due loans as a percentage of total loans held for investment improved to 0.31 percent at September 30, 2021 compared to 0.49 percent at June 30, 2021. Within this amount, loans greater than 90 days past due totaled $2.3 million, or 0.12 percent of loans held for investment at September 30, 2021, compared to 0.13 percent at June 30, 2021. Non-performing assets to total loans and OREO were 0.20 percent at September 30, 2021, an improvement from 0.22 percent at June 30, 2021. Criticized and classified loans to total loans, which elevated during the pandemic, continued to improve and were 2.85 percent at September 30, 2021, a 108 basis point decline from June 30, 2021. Positive asset quality trends combined with strong loan growth, resulted in no provision expense during the third quarter of 2021. As a result, the allowance for loan losses plus the fair value mark on acquired loans to total loans, less PPP loans decreased 6 basis points to 1.41 percent at September 30, 2021 when compared to June 30, 2021.  Asset Quality Data:   9/30/2021     6/30/2021     3/31/2021     12/31/2020     9/30/2020   Annualized net charge-offs to average loans     0.05 %     0.01 %     0.00 %     0.02 %     0.00 % Criticized and classified loans to total loans     2.85 %     3.95 %     4.39 %     5.46 %     5.64 % Classified loans to total risk-based capital     7.16 %     7.69 %     10.51 %     11.08 %     11.43 % Loans- past due to total end of period loans     0.31 %     0.49 %     0.44 %     1.12 %     0.44 % Loans- over 89 days past due to total end of period loans     0.12 %     0.13 %     0.14 %     0.23 %     0.09 % Non-performing assets to total loans and OREO     0.20 %     0.22 %     0.30 %     0.28 %     0.16 % Allowance for loan losses plus fair value marks / Non-PPP Loans     1.41 %     1.47 %     1.60 %     1.58 %     1.62 % Allowance for loan losses to non-performing loans     657 %     571 %     446 %     483 %     787 % Income Tax Expense The Company's third quarter effective income tax rate of approximately 19.0% remained unchanged from the prior quarter ended June 30, 2021. During the third quarter, the Company revised its expected annual effective tax rate for 2021 to approximately 20.0 percent, a 1.0 percent decrease from the previous estimate. The decrease is attributable to continued benefits in the Company's tax strategy. Capital The Company continues to be strongly capitalized with tangible equity of $322.1 million at September 30, 2021. Tangible book value per share of common stock for the quarter ended September 30, 2021 increased to $14.53 compared to $14.03 and $12.92 for the quarters ended June 30, 2021 and September 30, 2020, respectively. The regulatory capital ratios in the table below are significantly above levels required to be considered "well capitalized," which is the highest possible regulatory designation. Capital ratios:   9/30/2021     6/30/2021     3/31/2021     12/31/2020     9/30/2020   Total risk-based capital     16.23 %     16.13 %     16.29 %     16.03 %     15.96 % Common equity tier 1 capital     13.95 %     13.78 %     13.79 %     13.52 %     13.39 % Leverage     10.28 %     10.17 %     9.78 %     9.60 %     9.23 % In the third quarter of 2021, the Company did not repurchase common stock under its share repurchase program. The total remaining authorization for future repurchases was $29.7 million as of September 30, 2021.  Dividend On October 21, 2021, the Board of Directors of CapStar approved a quarterly cash dividend of $0.06 per common share payable on November 24, 2021 to shareholders of record as of November 10, 2021. Conference Call and Webcast Information CapStar will host a conference call and webcast at 9:00 a.m. Central Time on Friday, October 22, 2021. During the call, management will review the third quarter results and operational highlights. Interested parties may listen to the call by dialing (844) 412-1002. The conference ID number is 2255846. A simultaneous webcast may be accessed on CapStar's website at ir.capstarbank.com by clicking on "News & Events." An archived version of the webcast will be available in the same location shortly after the live call has ended. About CapStar Financial Holdings, Inc. CapStar Financial Holdings, Inc. is a bank holding company headquartered in Nashville, Tennessee and operates primarily through its wholly owned subsidiary, CapStar Bank, a Tennessee-chartered state bank. CapStar Bank is a commercial bank that seeks to establish and maintain comprehensive relationships with its clients by delivering customized and creative banking solutions and superior client service. As of September 30, 2021, on a consolidated basis, CapStar had total assets of $3.1 billion, total loans of $1.9 billion, total deposits of $2.7 billion, and shareholders' equity of $370.3 million. Visit www.capstarbank.com for more information. NON-GAAP MEASURES This release includes financial information determined by methods other than in accordance with generally accepted accounting principles ("GAAP"). This financial information includes certain operating performance measures, which exclude merger-related and other charges that are not considered part of recurring operations. Such measures include: "Efficiency ratio – operating," "Expenses – operating," "Earnings per share – operating," "Diluted earnings per share – operating," "Tangible book value per share," "Return on common equity – operating," "Return on tangible common equity – operating," "Return on assets – operating," and "Tangible common equity to tangible assets." Management has included these non-GAAP measures because it believes these measures may provide useful supplemental information for evaluating CapStar's underlying performance trends. Further, management uses these measures in managing and evaluating CapStar's business and intends to refer to them in discussions about our operations and performance. Operating performance measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and are not necessarily comparable to non-GAAP measures that may be presented by other companies. To the extent applicable, reconciliations of these non-GAAP measures to the most directly comparable GAAP measures can be found in the ‘Non-GAAP Reconciliation Tables' included in the exhibits to this presentation. CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARYConsolidated Statements of Income (unaudited) (dollars in thousands, except share data)Third quarter 2021 Earnings Release     Three Months Ended     Nine Months Ended       September 30,     September 30,       2021     2020     2021     2020   Interest income:                         Loans, including fees   $ 22,350     $ 22,796     $ 66,936     $ 61,620   Securities:                         Taxable     1,655       1,193       4,900       3,465   Tax-exempt     344       343       1,065       975   Federal funds sold     9       —       12       —   Restricted equity securities     161       139       482       421   Interest-bearing deposits in financial institutions     171       171       405       640   Total interest income     24,690       24,642       73,800       67,121   Interest expense:                         Interest-bearing deposits     390       640       1,216       3,371   Savings and money market accounts     288       2,537       896       4,819   Time deposits     654       1,299       2,317       4,197   Federal Home Loan Bank advances     —       116       12       348   Subordinated notes     394       394       1,181       394   Total interest expense     1,726       4,986       5,622       13,129   Net interest income     22,964       19,656       68,178       53,992   Provision for loan losses     —       2,119       (415 )     11,295   Net interest income after provision for loan losses     22,964       17,537       68,593       42,697   Noninterest income:                         Deposit service charges     1,187       1,064       3,398       2,531   Interchange and debit card transaction fees     1,236       936       3,555       2,389   Mortgage banking     4,693       9,686       13,318       19,063   Tri-Net     1,939       668       4,618       2,528   Wealth management     481       382       1,412       1,162   SBA lending     911       476       1,781       525   Net gain on sale of securities     7       34       20       74   Other noninterest income     1,197       1,558       3,446       3,228   Total noninterest income     11,651       14,804       31,548       31,500   Noninterest expense:                         Salaries and employee benefits     10,980       12,949       31,210       33,256   Data processing and software     2,632       2,353       8,530       6,317   Occupancy     1,028       999       3,193       2,615   Equipment     760       864       2,640       2,295   Professional services     469       638       1,634       1,854   Regulatory fees     279       397       746       893   Acquisition related expenses     —       2,548       323       3,286   Amortization of intangibles     477       539       1,478       1,300   Other operating     1,741       1,452       5,105       4,067   Total noninterest expense     18,366       22,739       54,859       55,883   Income before income taxes     16,249       9,602       45,282       18,314   Income tax expense     3,147       2,115       9,075       3,299   Net income   $ 13,102     $ 7,487     $ 36,207     $ 15,015   Per share information:                         Basic net income per share of common stock   $ 0.59     $ 0.34     $ 1.64     $ 0.77   Diluted net income per share of common stock   $ 0.59     $ 0.34     $ 1.63     $ 0.77   Weighted average shares outstanding:                         Basic     22,164,278       21,948,579       22,114,948       19,558,281   Diluted     22,218,402       21,960,490       22,165,130       19,583,448   This information is preliminary and based on CapStar data available at the time of this earnings release. CAPSTAR FINANCIAL HOLDINGS, INC. AND SUBSIDIARYSelected Quarterly Financial Data (unaudited) (dollars in thousands, except share data)Third quarter 2021 Earnings Release     Five Quarter Comparison       9/30/2021     6/30/2021     3/31/2021     12/31/2020     9/30/2020   Income Statement Data:                               Net interest income   $ 22,964     $ 23,032     $ 22,182     $ 22,331     $ 19,656   Provision for loan losses     —       (1,065 )     650       184       2,119   Net interest income after provision for loan losses     22,964       24,097       21,532       22,147       17,537   Deposit service charges     1,187       1,109       1,102       964       1,064   Interchange and debit card transaction fees     1,236       1,227       1,092       782       936   Mortgage banking     4,693       3,910       4,716       5,971       9,686   Tri-Net     1,939       1,536       1,143       1,165       668   Wealth management     481       471       459       411       382   SBA lending     911       377       492       916       476   Net gain (loss) on sale of securities     7       (13 )     26       51       34   Other noninterest income     1,197       1,266       984       1,488       1,558   Total noninterest income     11,651       9,883       10,014       11,748       14,804   Salaries and employee benefits     10,980       10,803       9,427       11,996       12,949   Data processing and software     2,632       3,070       2,827       2,548       2,353   Occupancy     1,028       1,057       1,108       975       999   Equipment     760       980       899       900       864   Professional services    .....»»

Category: earningsSource: benzingaOct 21st, 2021

Jack Dorsey and Mark Zuckerberg were rivals long before Dorsey mocked Facebook"s metaverse plan. Theirs is just one of a dozen yearslong feuds between some of the world"s most powerful tech leaders.

With billions of dollars and world-changing technology at stake, it's only natural Silicon Valley has become a breeding ground for rivalries. Twitter CEO Jack Dorsey, left, and Facebook CEO Mark Zuckerberg. Joe Raedle/Getty Images; Mark Lennihan/AP Photo While there are many close friendships in Silicon Valley, there are also plenty of feuds. Some appear to be friendly rivalries, like Salesforce CEO Marc Benioff and Oracle founder Larry Ellison. Others are more contentious: Elon Musk and Jeff Bezos, for example, have been feuding for years. Silicon Valley is a breeding ground for rivalries. In a place where world-changing ideas are born and billions of dollars are at stake, it's only natural that rivalries develop between Silicon Valley's power players, ranging from friendly sparring to pointed critiques. While some feuds, like the one between Salesforce CEO Marc Benioff and Oracle founder Larry Ellison, appear to be born out of a close friendship and mutual respect, others - like the one between Mark Zuckerberg and Evan Spiegel - started over a spurned acquisition offer. Here are some of the longstanding feuds, friendly or otherwise, between some of the world's most powerful execs. Mark Zuckerberg and Jack Dorsey Phillip Faraone/Getty Images for WIRED25; Francois Mori/AP Twitter CEO Jack Dorsey and Zuckerberg have never seemed particularly chummy, but the rivalry between the two execs seems to have grown worse in the last few years. In 2019, Facebook came under fire over its decision not to fact-check political ads. In response, Dorsey announced that Twitter would suspend political advertising altogether, saying "political message reach should be earned, not bought."Dorsey also said at an event that October that Zuckerberg's argument that Facebook is an advocate for free speech "a major gap and flaw in the substance he was getting across," and that "there's some amount of revisionist history in all his storytelling."For his part, Zuckerberg hasn't been shy about criticizing Twitter, saying in an all hands that same month that "Twitter can't do as good of a job as we can," according to leaked audio obtained by The Verge.Two months later, Dorsey unfollowed Zuckerberg on Twitter. Since then, Dorsey has criticized Facebook's rebranded logo, proclaimed that he doesn't use any Facebook products, and hinted that he and Zuckerberg have "beef," saying that the two CEOs take "different approaches." Most recently, Dorsey mocked Zuckerberg's plan to turn into Facebook into a "metaverse company," calling the concept dystopian.  Elon Musk and Jeff Bezos Jeff Bezos and Elon Musk. REUTERS/Joshua Roberts Amazon CEO Jeff Bezos and SpaceX and Tesla CEO Elon Musk aren't competitors in any earthly pursuits, but they're bitter rivals when it comes to outer space. Bezos founded his rocket company, Blue Origin, in 2000, while Musk founded SpaceX in 2002. Two years later, the pair met for dinner, and even then, things were getting testy."I actually did my best to give good advice, which he largely ignored," Musk said after the meeting.In 2013, their rivalry heated up when SpaceX tried to get exclusive use of a NASA launch pad and Blue Origin filed a formal protest with the government (SpaceX eventually won the right to take over the pad.) Months later, the two companies got into a patent battle, and soon after, Bezos and Musk took their feud public, trading barbs on Twitter.Their rivalry has flared up from time to time since then, but things came to a head in 2021 amid multiple legal filings from Blue Origin regarding SpaceX and a flurry of public criticism from Musk.After he surpassed Bezos as the world's richest person, Musk taunted the Amazon founder by telling Forbes he planned to send "a giant statue of the digit '2' to Jeffrey B., along with a silver medal." Elon Musk and Bill Gates Pascal Le Segretain, Sean Gallup / Getty Images The strife between Gates and Musk first flared up February 2020 when Gates said during an interview with YouTuber Marques Brownlee that while Tesla has helped drive innovation and adoption of electric vehicles, he didn't buy a Tesla when making a recent vehicle purchase — he bought a Porsche Taycan. In response, Musk tweeted that his conversations with Gates have always been "underwhelming." Then, in July, Gates said in an interview on CNBC's "Squawk Box" that Musk's comments about COVID-19 were "outrageous," as Musk has frequently downplayed the severity of the virus and questioned how the US had handled its coronavirus response. Musk took to Twitter a few days later to taunt Gates, tweeting, "Billy G is not my lover" and "The rumor that Bill Gates & I are lovers is completely untrue."Gates also critiqued Musk over his space ambitions, telling Kara Swisher "I don't think rockets are the solution" and that he'd rather spend money on vaccines. He also warned against buying into the mania over cryptocurrencies, which Musk frequently promotes on Twitter."My general thought would be that, if you have less money than Elon, you should probably watch out," Gates told Bloomberg. Tim Cook and Mark Zuckerberg AP; Francois Mori/AP Cook and Zuckerberg have traded insults over the years, beginning as early as 2014, when Cook said in an interview that "when an online service is free, you're not the customer. You're the product," seemingly in reference to Facebook.In the aftermath of Facebook's Cambridge Analytica scandal, in which private Facebook user data was stolen from 50 million users, Recode's Kara Swisher asked Cook what he would do if he was in Zuckerberg's shoes. He responded: "What would I do? I wouldn't be in this situation."Zuckerberg was reportedly so incensed by Cook's comments that he asked executives to switch to Android phones.In a company blog post in 2018, Facebook confirmed the feud between the two execs: "Tim Cook has consistently criticized our business model and Mark has been equally clear he disagrees."The pair reportedly had a meeting at the Sun Valley conference in 2019, during which Zuckerberg asked Cook for advice regarding the Cambridge Analytica scandal. According to The New York Times, Cook told Zuckerberg to delete all user data it collects from outside its apps, the equivalent of rendering Facebook's business model obsolete. Zuckerberg was reportedly stunned.More recently, the two CEOs were at odds over an Apple privacy update that allows users opt out of being tracked for advertising purposes. Facebook repeatedly denounced the change, saying it could destroy part of its business.  Elon Musk and Mark Zuckerberg Susan Walsh/AP; Erin Scott/Reuters Musk and Zuckerberg have clashed since as far back as 2016 when a SpaceX rocket explosion destroyed a Facebook satellite. Zuckerberg issued a heated statement saying he was "deeply disappointed" about SpaceX's failure.In 2017, Zuckerberg criticized people who have concerns about the future of artificial intelligence — an opinion Musk has frequently voiced — calling those anxieties "really negative" and "pretty irresponsible." In response, Musk said that he's discussed AI with Zuckerberg and called his understanding of the subject "limited."One year later, Facebook became embroiled in the Cambridge Analytica scandal, and Musk publicly deleted his companies' Facebook pages, tweeting that the company gave him "the willies." After Sacha Baron Cohen spoke out in favor of increased regulation of Facebook, Musk tweeted: "#DeleteFacebook It's lame. Then, following the riot at the US Capitol in January 2021, Musk used Twitter to share memes linking the riots to Facebook. On the evening of the rampage, Musk tweeted, "This is called the domino effect," along with an image of dominoes, with the first one labeled "a website to rate women on campus," a reference to Facebook's inception at Harvard University. The last domino was about the rioters. Kevin Systrom and Jack Dorsey Getty Images; Anushree Fadnavis/Reuters Instagram founder Kevin Systrom and Twitter CEO Jack Dorsey started out as close friends, but had a falling out around the time Instagram sold to Facebook.  According to the book "No Filter: The Inside Story of Instagram" by Sarah Frier, the pair met when they were early employees at Odeo, the audio and video site created by eventual Twitter cofounders Ev Williams and Noah Glass. Dorsey expected to dislike Systrom when he joined as a summer intern in the mid-2000s, but the pair ended up bonding over photography and expensive coffee. Systrom and Dorsey stayed in touch even after Systrom got a full-time job at Google. Systrom was an early proponent of Twitter (then known as Twttr), and when he started working on Burbn, the precursor to Instagram, he reached out to Dorsey for guidance. Dorsey ended up becoming an early investor, putting in $25,000. When Burbn pivoted to Instagram, Dorsey became one of the app's biggest fans, cross-posting his Instagrams to Twitter and helping the app go viral soon after it launched. Dorsey eventually attempted to buy Instagram, but Systrom declined, saying he wanted to make Instagram too expensive to be acquired, according to Frier. The Dorsey-Systrom relationship appeared to have soured in 2012, when Dorsey found out that Instagram had signed a deal to be acquired by Facebook, Twitter's biggest rival. According to Frier, Dorsey was hurt that Systrom hadn't called him first to discuss the deal, or to negotiate one with Twitter instead.Dorsey hasn't posted to his Instagram account since April 9, 2012, when he snapped a photo of an unusually empty San Francisco city bus — according to Frier, it was taken the morning he found out Instagram had sold. While Systrom had been quiet on Twitter for the last few years, he's recently begun using the platform again, and in 2020, the pair even had a pleasant tweet exchange. Marc Benioff and Larry Ellison Kimberly White/Getty Images; Justin Sullivan/Getty Images Oracle founder Larry Ellison and Salesforce CEO Marc Benioff met when Benioff began working at Oracle when he was 23. He was a star early on, earning a "rookie of the year" award that same year and becoming Oracle's youngest VP by age 26. He spent 13 years at Oracle, during which he became a trusted lieutenant to Ellison. Benioff began working on Salesforce with Ellison's blessing, and Ellison became an investor, putting in $2 million early on. But since then, the duo has publicly feuded on multiple occasions. In 2000, Oracle launched software that directly competed with Salesforce. Benioff asked Ellison to resign from Salesforce's board, and Ellison refused (he eventually left the board, but Benioff let him keep his stock and options).Over the years, Benioff and Ellison have sparred off and on: Ellison once mocked Salesforce, calling it an "itty bitty application" that's dependent on Oracle, while Benioff has called Oracle a "false cloud." And in 2011, Ellison ordered that Benioff be removed from the speaker lineup of Oracle's OpenWorld conference, which Benioff said was because Oracle was afraid he'd give a better speech. But throughout it all, Benioff has described Ellison as his mentor. "There is no one I've learned more from than Larry Ellison," Benioff said in 2013. Larry Ellison and Bill Gates Justin Sullivan/Getty Images; Mike Cohen/Getty Images for The New York Times Gates and Ellison may have patched things up these days, but back in the late '90s and early 2000s, they had a touchy relationship, mostly defined by Ellison trying to outdo Gates. "He's utterly obsessed with trying to beat Bill Gates," former Microsoft CTO Nathan Myhrvold once told Vanity Fair. "I mean, the guy's got six billion bucks. You'd think he wouldn't be so dramatically obsessed that one guy in the Northwest is more successful. [With Larry] it's just a mania."Their animosity partly stemmed from Ellison's close friendship with Steve Jobs, a frequent opponent of Gates. But things took a more serious turn in 2000 when Microsoft was being investigated by the federal government over antitrust violations.At the time, several groups were openly supportive of Microsoft, and Ellison suspected they were being funded by Microsoft itself. He hired private investigators to in an attempt to out Microsoft and help out the feds. Eventually, Microsoft lost the suit, and Gates stepped down as Microsoft CEO.  Evan Spiegel and Mark Zuckerberg Michael Kovac/Getty Images; Francois Mori/AP Snap CEO Evan Spiegel and Mark Zuckerberg don't seem to have a friendly relationship, and it may extend as far back as 2012, when Spiegel may have tried to one-up Zuckerberg when he attempted to arrange a meeting.Since then, Snap has reportedly turned down an acquisition offer from Facebook on three separate occasions.Facebook has mimicked many of Snapchat's features over the years — both on its own app and its subsidiary, Instagram — and the CEOs have made jabs at each other in public. In 2018, after Facebook cloned yet another Snapchat feature, Stories, Spiegel said: "We would really appreciate it if they copied our data protection practices also," a dig at Facebook's various privacy scandals. Steve Jobs and Bill Gates Beck Diefenbach/Reuters; Mike Cohen/Getty Images for The New York Times In the early days of Apple and Microsoft, Steve Jobs and Bill Gates got along — Microsoft made software for the Apple II computer, and Gates was a frequent guest in Cupertino, where Apple is headquartered. But the tides started to turn in the early '80s, when Jobs flew up to Microsoft's headquarters in Washington to try to convince Gates to make software for the Macintosh computer. Gates later described it as "a weird seduction visit" and said he felt like Jobs was saying "I don't need you, but I might let you be involved."Still, they remained relatively friendly until 1985, when Microsoft launched the first version of Windows and Jobs accused him of ripping off the Macintosh. "They just ripped us off completely, because Gates has no shame," Jobs later told his biographer, Walter Isaacson, to which Gates replied: "If he believes that, he really has entered into one of his own reality distortion fields."The duo traded barbs for years, with Jobs calling Gates boring and Gates calling Jobs "weirdly flawed as a human being." Tensions remained high even after Microsoft invested in Apple to keep it afloat, with both Gates and Jobs insulting each other and their companies' products time and time again. Still, they clearly respected and admired each other, despite their animosity. When Jobs died in 2011, Gates said: "I respect Steve, we got to work together. We spurred each other on, even as competitors. None of [what he said] bothers me at all." Mark Zuckerberg and Kevin Systrom Getty Images; Francois Mori/AP Mark Zuckerberg and former Instagram CEO Kevin Systrom used to get along well — so well that Zuckerberg bought Instagram for $1 billion in 2012.But in the intervening years, the relationship between the two executives seemingly fell apart. When asked why he left the helm of the company he founded, Systrom said, "no one ever leaves a job because everything's awesome."According to an April 2019 piece from Wired's Nick Thompson and Fred Vogelstein, Systrom and cofounder Mike Krieger left because of increasing tensions with Zuckerberg. Zuckerberg reportedly became increasingly controlling, banning Systrom from doing magazine profiles without approval, taking away Facebook tools that helped Instagram grow, testing location-tracking while Systrom was out on paternity leave, and adding a new button to Instagram that Systrom detested.  Steve Jobs and Michael Dell Beck Diefenbach/Reuters; Justin Sullivan/Getty Images In 1997, Dell founder and CEO Michael Dell was asked for his opinion on Apple, which, at the time, was in dire straits. He responded that he'd "shut it down and give the money back to the shareholders."That comment irritated Steve Jobs, who told his team in response: "The world doesn't need another Dell or HP. It doesn't need another manufacturer of plain, beige, boring PCs. If that's all we're going to do, then we should really pack up now." At an Apple keynote shortly after, Jobs said Dell's comments were "rude" and told him that Apple was coming for him. Dell later softened his comments, saying that he was trying to make clear that he wasn't for hire. But Dell rankled Jobs enough that, in January 2006, Jobs sent around this memo to the entire company: "Team, it turned out that Michael Dell wasn't perfect at predicting the future. Based on today's stock market close, Apple is worth more than Dell. Stocks go up and down, and things may be different tomorrow, but I thought it was worth a moment of reflection today." Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 21st, 2021

Great Southern Bancorp, Inc. Reports Preliminary Third Quarter Earnings of $1.49 Per Diluted Common Share

Preliminary Financial Results and Other Matters for the Quarter and Nine Months Ended September 30, 2021: CECL Adoption: As previously disclosed, effective January 1, 2021, Great Southern Bancorp, Inc. (the Company) adopted the Current Expected Credit Loss (CECL) accounting standard. The Company's financial statements for periods prior to January 1, 2021, were prepared under the incurred loss accounting standard. The adoption of the CECL accounting standard during the first quarter of 2021 required us to recognize a one-time cumulative adjustment to our allowance for credit losses and a liability for potential losses related to the unfunded portion of our loans and commitments in order to fully transition from the incurred loss model to the CECL model. Significant Income and Expense Items: During the three months ended September 30, 2021, the Company recorded interest income of $1.6 million related to net deferred fee income accretion on Paycheck Protection Program (PPP) loans. Net fees are accreted over the loan term with remaining deferred fees recorded in interest income when the loans pay off by the borrower or by the Small Business Administration (SBA) when they are forgiven. During the first and second quarter of 2021, almost all of the remaining loans from the original round of PPP were repaid by the SBA in accordance with the borrower forgiveness terms of the PPP. We expect more PPP loans from the most recent round of PPP will repay in full during the fourth quarter of 2021. At September 30, 2021, remaining net deferred fees related to PPP loans totaled $2.1 million. In addition, for the three months ended September 30, 2021, based upon the Company's assumptions, estimates and CECL credit loss methodology, the Company recorded a negative provision for credit losses of $3.0 million related to its outstanding loans. This negative provision was mainly the result of declining outstanding loan balances, continued low levels of net charge-offs and an improving economic outlook. The Company also recorded a provision expense for unfunded commitments of $643,000. The after-tax effect of these net credit provision items on earnings was $0.13 per diluted share. Total Loans: Total gross loans (including the undisbursed portion of loans), excluding FDIC-assisted acquired loans and mortgage loans held for sale, decreased $210.0 million, or 4.1%, from December 31, 2020, to September 30, 2021. This decrease was primarily in other residential (multi-family) loans, commercial business loans, commercial real estate loans and consumer auto loans. This decrease was partially offset by increases in construction loans and single family real estate loans. The FDIC-assisted acquired loan portfolios decreased $19.1 million during the nine months ended September 30, 2021. Outstanding net loan receivable balances decreased $271.1 million, from $4.30 billion at December 31, 2020 to $4.03 billion at September 30, 2021. Asset Quality: Non-performing assets and potential problem loans, including those acquired in FDIC-assisted transactions, totaled $11.7 million at September 30, 2021, a decrease of $1.6 million from $13.3 million at June 30, 2021 and a decrease of $2.3 million from $14.0 million at December 31, 2020. At September 30, 2021, non-performing assets, including those acquired in FDIC-assisted transactions, were $7.9 million (0.15% of total assets), a decrease of $636,000 from $8.6 million (0.15% of total assets) at June 30, 2021 and a decrease of $171,000 from $8.1 million (0.14% of total assets) at December 31, 2020. Excluding FDIC-assisted acquired assets, non-performing assets and potential problem loans totaled $8.0 million (0.15% of total assets) at September 30, 2021, and non-performing assets were $5.2 million (0.10% of total assets). Net Interest Income: Net interest income for the third quarter of 2021 increased $755,000 (or approximately 1.7%) to $44.9 million compared to $44.2 million for the third quarter of 2020. Net interest income was $44.7 million for the second quarter of 2021. Net interest margin was 3.36% for each of the quarters ended September 30, 2021 and September 30, 2020. The positive impact on net interest margin from the additional yield accretion on acquired loan pools that was recorded during the periods was two and nine basis points for the quarters ended September 30, 2021 and September 30, 2020, respectively. Core net interest margin, which excludes the impact of the yield accretion, was 3.34% and 3.27% for the three months ended September 30, 2021 and 2020, respectively. For further discussion of the additional yield accretion of the discount on acquired loan pools, see "Net Interest Income." Capital: The capital position of the Company continues to be strong, significantly exceeding the thresholds established by regulators. On a preliminary basis, as of September 30, 2021, the Company's Tier 1 Leverage Ratio was 11.0%, Common Equity Tier 1 Capital Ratio was 13.4%, Tier 1 Capital Ratio was 14.0%, and Total Capital Ratio was 16.9%. SPRINGFIELD, Mo., Oct. 20, 2021 (GLOBE NEWSWIRE) -- Great Southern Bancorp, Inc. (NASDAQ:GSBC), the holding company for Great Southern Bank, today reported that preliminary earnings for the three months ended September 30, 2021, were $1.49 per diluted common share ($20.4 million available to common shareholders) compared to $0.96 per diluted common share ($13.5 million available to common shareholders) for the three months ended September 30, 2020. Preliminary earnings for the nine months ended September 30, 2021, were $4.32 per diluted common share ($59.3 million available to common shareholders) compared to $2.93 per diluted common share ($41.5 million available to common shareholders) for the nine months ended September 30, 2020. For the quarter ended September 30, 2021, annualized return on average common equity was 12.82%, annualized return on average assets was 1.47%, and annualized net interest margin was 3.36%, compared to 8.48%, 0.98% and 3.36%, respectively, for the quarter ended September 30, 2020. For the nine months ended September 30, 2021, annualized return on average common equity was 12.61%, return on average assets was 1.43%, and annualized net interest margin was 3.37%, compared to 8.94%, 1.05% and 3.52%, respectively, for the nine months ended September 30, 2020.     Great Southern President and CEO Joseph W. Turner commented, "We are pleased with our third quarter earnings and continued strong financial position, which reflects our associates' ongoing commitment to take care of our customers in this uncertain health and economic environment. While overall economic conditions continue to show signs of improvement, uncertainty remains regarding the timing and magnitude of the recovery. In the third quarter of 2021, we earned $20.4 million ($1.49 per diluted common share), compared to $13.5 million ($0.96 per diluted common share) for the same period in 2020. Increased earnings were driven by a negative credit loss provision for our funded loan portfolio; higher net interest income, primarily driven by reduced deposit costs and PPP loan net deferred fee income recognition; and increased non-interest income, mainly related to point-of-sale debit card and ATM fees. Importantly, our pre-provision net revenue continues to be strong. As noted above, we recognized significant deferred fee income related to repaid PPP loans in this third quarter, and we expect that we will recognize a significant portion of the remaining PPP fee income in the fourth quarter of 2021. Earnings performance ratios were solid, with an annualized return on average assets of 1.47%, annualized return on average equity of 12.82%, and efficiency ratio of 57.27%. While our net interest margin has been somewhat pressured by increased deposits and resulting changes in asset mix, net interest income was $133.7 million in the first nine months of 2021, up from $132.6 million in the same timeframe of 2020. "Thus far in 2021, loan production and activity in our markets has been quite vigorous, but loan repayments, including customers refinancing or selling stabilized projects that collateralize loans or completing the process of debt forgiveness for PPP loans, have created significant headwinds. Outstanding loan totals have decreased $271 million compared to outstanding loans at December 31, 2020, with $222 million of this decrease in our multi-family loans category. Our pipeline of loan commitments and unfunded loans remains strong and increased by about $100 million from the end of the second quarter of 2021. This type of lending environment can be a dangerous time for banks. Like credit cycles in the past, we recognize the current short-term growth challenges and won't stretch our credit structure discipline for the sake of loan growth. We manage for the long-term, and understand that we will have periodic ebbs in our loan growth." Turner added, "Credit quality metrics remained excellent during the third quarter. For the first nine months of 2021, net charge-offs were $9,000. At September 30, 2021, excluding FDIC-assisted acquired assets, non-performing assets were $5.2 million, a decrease of $325,000 from June 30, 2021. Non-performing assets to period-end assets were 0.10% at the end of the third quarter. Pandemic-related loan modifications totaled $40 million at the end of September 2021, down from $92 million at the end of June 2021 and $251 million at December 31, 2020. "With our strong capital position and in our effort to enhance long-term shareholder value, the Company repurchased approximately 307,000 shares at an average price of $53.13 during the third quarter of 2021. Year-to-date through September 30, 2021, stock repurchases totaled approximately 449,000 shares at an average price of $52.89. We currently have about 485,000 shares remaining in our existing stock repurchase authorization. Additionally, in August 2021, we completed our previously announced redemption of $75 million of subordinated notes."    COVID-19 Impact to Our Business and Response Great Southern is actively monitoring and responding to the effects of the COVID-19 pandemic, including the administration of vaccines in our local markets. As always, the health, safety and well-being of our customers, associates and communities, while maintaining uninterrupted service, are the Company's top priorities. Centers for Disease Control and Prevention (CDC) guidelines, as well as directives from federal, state and local officials, are being closely followed to make informed operational decisions. The Company continues to work diligently with its nearly 1,200 associates to enforce the most current health, hygiene and social distancing practices. Teams in nearly every operational department have been split, with part of each team working at an off-site disaster recovery facility to promote social distancing and to avoid service disruptions. To date, there have been no service disruptions or reductions in staffing. With the advent of COVID-19 vaccinations in the Company's markets, plans are being considered to allow associates working from home or other sites to return to their normal workplace beginning in the fourth quarter of 2021, dependent on health and safety conditions. As always, customers can conduct their banking business using the banking center network, online and mobile banking services, ATMs, Telephone Banking, and online account opening services. As health conditions in local markets dictate, Great Southern banking center lobbies are open following social distancing and health protocols. Great Southern continues to work with customers experiencing hardships caused by the pandemic. As a resource to customers, a COVID-19 information center continues to be available on the Company's website, www.GreatSouthernBank.com. General information about the Company's pandemic response, how to receive assistance, and how to avoid COVID-19 scams and fraud are included. Paycheck Protection Program Loans Great Southern has actively participated in the PPP through the SBA. The PPP has been met with very high demand throughout the country, resulting in a second round of funding in 2021 through an amendment to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). In the first round of the PPP, we originated approximately 1,600 PPP loans, totaling approximately $121 million. As of September 30, 2021, full forgiveness proceeds have been received from the SBA for almost all of these PPP loans. On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act authorized the reopening of the PPP for eligible first-draw and second-draw borrowers which began on January 19, 2021, and had an original expiration date of March 31, 2021. On March 30, 2021, the PPP Extension Act of 2021 was signed, extending the PPP an additional two months to May 31, 2021, along with an additional 30-day period for the SBA to process applications that were still pending as of May 31, 2021. In the second round of the PPP, we funded approximately 1,650 PPP loans, totaling approximately $58 million. As of October 11, 2021, full forgiveness proceeds have been received from the SBA for 829 of these PPP loans, totaling approximately $26 million. Great Southern receives fees from the SBA for originating PPP loans based on the amount of each loan. At September 30, 2021, remaining net deferred fees related to PPP loans totaled $2.1 million. The fees, net of origination costs, are deferred in accordance with standard accounting practices and will be accreted to interest income on loans over the contractual life of each loan. These loans generally have a contractual maturity of two years from origination date, but may be repaid or forgiven (by the SBA) sooner. If these loans are repaid or forgiven prior to their contractual maturity date, the remaining deferred fee for such loans will be accreted to interest income immediately. We expect a significant portion of these remaining net deferred fees will accrete to interest income during the remainder of 2021, with little of this income being recognized in 2022. In the three and nine months ended September 30, 2021, Great Southern recorded approximately $1.6 million and $3.9 million, respectively, of net deferred fees in interest income on PPP loans. Loan Modifications At September 30, 2021, we had remaining eight modified commercial loans with an aggregate principal balance outstanding of $38 million and 16 modified consumer and mortgage loans with an aggregate principal balance outstanding of $2 million. These balances have decreased from $233 million and $18 million, respectively, for these loan categories at December 31, 2020. The loan modifications are within the guidance provided by the CARES Act, the federal banking regulatory agencies, the Securities and Exchange Commission and the Financial Accounting Standards Board (FASB); therefore, they are not considered troubled debt restructurings. At September 30, 2021, the largest total modified loans by collateral type were in the following categories: healthcare - $12 million; hotel/motel - $11 million; retail - $8 million; office - $7 million. A portion of the loans modified at September 30, 2021, may be further modified, and new loans may be modified, within the guidance provided by the CARES Act (and subsequent legislation enacted in December 2020), the federal banking regulatory agencies, the SEC and the FASB if a more severe or lengthier deterioration in economic conditions occurs in future periods. Selected Financial Data: (In thousands, except per share data)   Three Months EndedSeptember 30,   Nine Months EndedSeptember 30,       2021     2020     2021     2020 Net interest income   $ 44,923   $ 44,168   $ 133,695   $ 132,561 Provision (credit) for credit losses on loans and unfunded commitments     (2,357 )   4,500     (4,039 )   14,371 Non-interest income     9,798     9,466     29,119     25,093 Non-interest expense     31,339     31,988     91,852     92,151 Provision for income taxes     5,375     3,692     15,655     9,607 Net income and net income available to common shareholders   $ 20,364   $ 13,454   $ 59,346   $ 41,525                           Earnings per diluted common share   $ 1.49   $ 0.96   $ 4.32   $ 2.93 NET INTEREST INCOME Net interest income for the third quarter of 2021 increased $755,000 to $44.9 million, compared to $44.2 million for the third quarter of 2020.   Net interest margin was 3.36% in both the third quarter of 2021 and the third quarter of 2020. For the three months ended September 30, 2021, net interest margin increased one basis point compared to the net interest margin of 3.35% in the three months ended June 30, 2021. In comparing the 2021 and 2020 third quarter periods, the average yield on loans decreased 11 basis points while the average rate on interest-bearing deposits declined 46 basis points. The margin compression resulted from changes in the asset mix, with average cash equivalents increasing $333 million and average investment securities increasing $4 million, while average loans decreased $266 million. Without this additional liquidity, the net interest margin would have been 23 basis points higher. In addition, the yield accretion on FDIC-assisted acquired loans was seven basis points less during the third quarter of 2021 compared to the third quarter of 2020. The average interest rate spread was 3.22% for the three months ended September 30, 2021, compared to 3.12% for the three months ended September 30, 2020 and 3.18% for the three months ended June 30, 2021. Net interest income for the nine months ended September 30, 2021 increased $1.1 million to $133.7 million compared to $132.6 million for the nine months ended September 30, 2020. Net interest margin was 3.37% in the nine months ended September 30, 2021, compared to 3.52% in the same period of 2020, a decrease of 15 basis points. The decrease in the margin between the nine months ended September 30, 2021 and the nine months ended September 30, 2020, was primarily due to the same factors as discussed above for the comparison of the current year third quarter margin to the prior year third quarter margin, with average cash equivalents increasing $286 million and average investment securities increasing $20 million. Without this additional liquidity, the net interest margin would have been 21 basis points higher in the nine months ended September 30, 2021. In addition, the yield accretion on FDIC-assisted acquired loans was nine basis points lower during the first nine months of 2021 compared to the same period in 2020. The average interest rate spread was 3.20% for the nine months ended September 30, 2021, compared to 3.24% for the nine months ended September 30, 2020. Also, the increase in interest cost from the subordinated notes issued in June 2020, net of the decrease in interest cost from the redemption of the subordinated notes issued in 2016, resulted in a decrease in net interest income of $1.4 million in the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. Additionally, the Company's net interest income included accretion of net deferred fees related to PPP loans originated in 2020 and 2021. The amount of net deferred fees recognized in interest income was $1.6 million in the three months ended September 30, 2021 compared to $1.1 million in the three months ended June 30, 2021 and $1.2 million in the three months ended March 31, 2021. The amount of net deferred fees recognized in interest income was $3.9 million and $1.0 million in the nine months ended September 30, 2021 and 2020, respectively. The amount of net deferred fees on PPP loans in the 2021 nine month period was greater than the 2020 nine month period due to loan forgiveness and repayments being received only during the three month period ended September 30, 2020 compared to the entire nine month period during 2021. In October 2018, the Company entered into an interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of the swap was $400 million with a contractual termination date in October 2025. As previously disclosed by the Company, on March 2, 2020, the Company and its swap counterparty mutually agreed to terminate this swap, effective immediately. The Company received a payment of $45.9 million, including accrued but unpaid interest, from its swap counterparty as a result of this termination. This $45.9 million, less the accrued to date interest portion and net of deferred income taxes, is reflected in the Company's stockholders' equity as Accumulated Other Comprehensive Income and is being accreted to interest income on loans monthly through the original contractual termination date of October 6, 2025. The Company recorded interest income related to the swap of $2.0 million and $2.0 million in the three months ended September 30, 2021 and 2020, respectively. The Company recorded interest income related to the swap of $6.1 million and $5.6 million in the nine months ended September 30, 2021 and 2020, respectively. The Company currently expects to have a sufficient amount of eligible variable rate loans to continue to accrete this interest income ratably in future periods. If this expectation changes and the amount of eligible variable rate loans decreases significantly, the Company may be required to recognize this interest income more rapidly. Previously, the Company's net interest income and margin have been positively impacted by significant additional yield accretion recognized in conjunction with updated estimates of the fair value of the loan pools acquired in its FDIC-assisted transactions. For each of the loan portfolios acquired, the cash flow estimates increased during the prior periods, based on payment histories and reduced credit loss expectations. This resulted in increased income that has been spread, on a level-yield basis, over the remaining expected lives of the loan pools (and, therefore, has decreased over time). Because the balance of these adjustments will be recognized generally over the remaining lives of the loan pools, they will impact future periods as well. The remaining accretable yield adjustment that will affect interest income was $606,000 at September 30, 2021. Of the remaining adjustments affecting interest income, we expect to recognize $178,000 of interest income during the remainder of 2021. As previously noted, we adopted the new accounting standard related to accounting for credit losses as of January 1, 2021. With the adoption of this standard, there is no further reclassification of discounts from non-accretable to accretable subsequent to December 31, 2020. All adjustments made prior to December 31, 2020 will continue to be accreted to interest income. The impact to income of adjustments on all portfolios acquired in FDIC-assisted transactions for the reporting periods presented is shown below:   Three Months Ended   September 30, 2021   September 30, 2020                   (In thousands, except basis points data) Impact on net interest income/net interest margin (in basis points) $ 279 2 bps   $ 1,229 9 bps   Nine Months Ended   September 30, 2021   September 30, 2020                   (In thousands, except basis points data) Impact on net interest income/net interest margin (in basis points) $ 1,398 3 bps   $ 4,632 12 bps     For the three months ended September 30, 2021, core net interest margin, which excludes the impact of the additional yield accretion, was 3.34%. This was an increase of seven basis points when compared to the core net interest margin of 3.27% for the three months ended September 30, 2020. For the nine months ended September 30, 2021, core net interest margin was also 3.34%. This was a decrease of six basis points when compared to the core net interest margin of 3.40% for the nine months ended September 30, 2020. For additional information on net interest income components, see the "Average Balances, Interest Rates and Yields" tables in this release. NON-INTEREST INCOME For the quarter ended September 30, 2021, non-interest income increased $332,000 to $9.8 million when compared to the quarter ended September 30, 2020, primarily as a result of the following items: Point-of-sale and ATM fees: Point-of-sale and ATM fees increased $657,000 compared to the prior year period. This increase was primarily due to a reduction in customer usage in the third quarter of 2020 as the COVID-19 pandemic caused many businesses to close and large portions of the U. S. population were required to stay at home for a period of time. In the quarter ended September 30, 2021, debit card and ATM usage by customers was back to normal levels, and in some cases, increased levels of activity. Overdraft and Insufficient Funds Fees: Overdraft and insufficient funds fees increased $210,000 compared to the prior year period. This increase was primarily due to reduced fees in the 2020 period. This was due to both a reduction in usage by customers and a decision near the end of the first quarter of 2020 to waive (through August 31, 2020) certain fees for customers in response to the COVID-19 pandemic. The effects of that decision were felt during the second and third quarters of 2020. Net gains on loan sales: Net gains on loan sales decreased $537,000 compared to the prior year quarter. The decrease was due to a decrease in originations of fixed-rate single-family mortgage loans during the 2021 period compared to the 2020 period. Fixed rate single-family mortgage loans originated are generally subsequently sold in the secondary market. These loan originations increased substantially when market interest rates decreased to historically low levels in 2020. As a result of the significant volume of refinance activity in recent periods, and as market interest rates have moved a bit higher in the third quarter of 2021, mortgage refinance volume has decreased and loan originations and related gains on sales of these loans have returned to levels more similar to historic averages. For the nine months ended September 30, 2021, non-interest income increased $4.0 million to $29.1 million when compared to the nine months ended September 30, 2020, primarily as a result of the following items: Net gains on loan sales: Net gains on loan sales increased $2.3 million compared to the prior year period. The increase was due to an increase in originations of fixed-rate single-family mortgage loans during the 2021 period compared to the 2020 period. As noted above, these loan originations increased substantially when market interest rates decreased to historically low levels in the latter half of 2020 and the first half of 2021. Point-of-sale and ATM fees: Point-of-sale and ATM fees increased $2.2 million compared to the prior year period. This increase was due to the same conditions as noted above. Gain (loss) on derivative interest rate products: In the 2021 period, the Company recognized a gain of $340,000 on the change in fair value of its back-to-back interest rate swaps related to commercial loans. In the 2020 period, the Company recognized a loss of $424,000 on the change in fair value of its back-to-back interest rate swaps related to commercial loans. Generally, as market interest rates increase, this creates a net increase in the fair value of these instruments. This is a non-cash item as there was no required settlement of this amount between the Company and its swap counterparties. Other income: Other income decreased $1.4 million compared to the prior year period. In the 2020 period, the Company recognized approximately $1.2 million of fee income related to newly-originated interest rate swaps in the Company's back-to-back swap program with loan customers and swap counterparties, with fewer of these transactions and related fee income generated in the current period. The Company also recognized approximately $541,000 in income related to the exit of certain tax credit partnerships during the nine months ended September 30, 2020, with no similar activity during the 2021 period. NON-INTEREST EXPENSE For the quarter ended September 30, 2021, non-interest expense decreased $649,000 to $31.3 million when compared to the quarter ended September 30, 2020, primarily as a result of the following item: Salaries and employee benefits: Salaries and employee benefits decreased $867,000 from the prior year quarter. In the 2020 period, the Company paid a special cash bonus to all employees totaling $1.1 million in response to the ongoing impacts of the COVID-19 pandemic. Such bonus was not repeated in the third quarter of 2021. For the nine months ended September 30, 2021, non-interest expense decreased $299,000 to $91.9 million when compared to the nine months ended September 30, 2020, primarily as a result of the following items: Salaries and employee benefits: Salaries and employee benefits decreased $812,000 in the nine months ended September 30, 2021 compared to the prior year period. In 2020, the Company approved two special cash bonuses to all employees totaling $2.2 million in response to the COVID-19 pandemic. Such bonuses were not repeated in the nine months ended September 30, 2021. Expense on other real estate owned and repossessions: Expense on other real estate owned and repossessions decreased $473,000 compared to the prior year period primarily due to sales of most foreclosed assets and a smaller amount of repossessed automobiles in the current period, plus higher valuation write-downs of certain foreclosed assets during the prior year period. During the 2020 period, sales and valuation write-downs of certain foreclosed assets totaled a net expense of $136,000, while sales and valuation write-downs in the 2021 period totaled a net gain of $29,000. Insurance: Insurance expense increased $626,000 compared to the prior year period. This increase was primarily due to an increase in FDIC deposit insurance premiums. In 2020, the Company had a credit with the FDIC for a portion of premiums previously paid to the deposit insurance fund. The remaining deposit insurance fund credit was utilized in 2020 in addition to $522,000 in premiums being due for the nine months ended September 30, 2020, while the premium expense was $1.1 million in the nine months ended September 30, 2021. The Company's efficiency ratio for the quarter ended September 30, 2021, was 57.27% compared to 59.64% for the same quarter in 2020. The efficiency ratio for the nine months ended September 30, 2021, was 56.42% compared to 58.45% for the same period in 2020. In the three- and nine-month periods ended September 30, 2021, the improved efficiency ratio was due to an increase in net interest income, an increase in non-interest income, and a decrease in non-interest expense. The Company's ratio of non-interest expense to average assets was 2.27% and 2.22% for the three and nine months ended September 30, 2021, respectively, compared to 2.34% and 2.33% for the three and nine months ended September 30, 2020. Average assets for the three months ended September 30, 2021, increased $62.8 million, or 1.1%, compared to the three months ended September 30, 2020, primarily due to increases in investment securities and interest bearing cash equivalents, offset by a decrease in net loans receivable. Average assets for the nine months ended September 30, 2021, increased $249.3 million, or 4.7%, compared to the nine months ended September 30, 2020, primarily due to increases in investment securities and interest bearing cash equivalents, offset by a decrease in net loans receivable. INCOME TAXES For the three months ended September 30, 2021 and 2020, the Company's effective tax rate was 20.9% and 21.5%, respectively. For the nine months ended September 30, 2021 and 2020, the Company's effective tax rate was 20.9% and 18.8%, respectively. Except for the three months ended September 30, 2020, these effective rates were at or below the statutory federal tax rate of 21%, due primarily to the utilization of certain investment tax credits and to tax-exempt investments and tax-exempt loans, which reduced the Company's effective tax rate. The Company's effective tax rate may fluctuate in future periods as it is impacted by the level and timing of the Company's utilization of tax credits, the level of tax-exempt investments and loans, the amount of taxable income in various state jurisdictions and the overall level of pre-tax income. In 2020, the Company's state income tax expenses were higher than normal in various states due to the recognition of income for tax purposes related to the gain recognized on the termination of the interest rate swap. State tax expense estimates have evolved throughout 2021 as taxable income and apportionment between states have been analyzed. The Company's effective income tax rate is currently generally expected to remain at or below the statutory federal tax rate due primarily to the factors noted above. The Company currently expects its effective tax rate (combined federal and state) will be approximately 20.0% to 21.0% in future periods. CAPITAL As of September 30, 2021, total stockholders' equity and common stockholders' equity were each $624.6 million (11.5% of total assets), equivalent to a book value of $46.73 per common share. Total stockholders' equity and common stockholders' equity at December 31, 2020, were each $629.7 million (11.4% of total assets), equivalent to a book value of $45.79 per common share. At September 30, 2021, the Company's tangible common equity to tangible assets ratio was 11.4%, compared to 11.3% at December 31, 2020. Included in stockholders' equity at September 30, 2021 and December 31, 2020, were unrealized gains (net of taxes) on the Company's available-for-sale investment securities totaling $12.0 million and $23.3 million, respectively. This decrease in unrealized gains primarily resulted from increasing market interest rates during 2021, which decreased the fair value of investment securities. Also included in stockholders' equity at September 30, 2021, were realized gains (net of taxes) on the Company's cash flow hedge (interest rate swap), which was terminated in March 2020, totaling $25.2 million. This amount, plus associated deferred taxes, is expected to be accreted to interest income over the remaining term of the original interest rate swap contract, which was to end in October 2025. At September 30, 2021, the remaining pre-tax amount to be recorded in interest income was $32.6 million. The net effect on total stockholders' equity over time will be no impact as the reduction of this realized gain will be offset by an increase in retained earnings (as the interest income flows through pre-tax income). On a preliminary basis, as of September 30, 2021, the Company's Tier 1 Leverage Ratio was 11.0%, Common Equity Tier 1 Capital Ratio was 13.4%, Tier 1 Capital Ratio was 14.0%, and Total Capital Ratio was 16.9%. On September 30, 2021, and on a preliminary basis, the Bank's Tier 1 Leverage Ratio was 11.7%, Common Equity Tier 1 Capital Ratio was 14.7%, Tier 1 Capital Ratio was 14.7%, and Total Capital Ratio was 15.9%. On August 15, 2021, the Company redeemed all of the Company's outstanding 5.25% fixed-to-floating rate subordinated notes due August 15, 2026, with an aggregate principal balance of $75 million. The total redemption price was 100% of the aggregate principal balance of the subordinated notes plus accrued and unpaid interest. The Company utilized excess cash on hand for the redemption payment. During the three months ended September 30, 2021, the Company repurchased 307,059 shares of its common stock at an average price of $53.13 and declared a regular quarterly cash dividend of $0.36 per common share, which reduced stockholders' equity. During the nine months ended September 30, 2021, the Company repurchased 449,438 shares of its common stock at an average price of $52.89 and declared regular cash dividends of $1.04 per common share.   LOANS Total gross loans (including the undisbursed portion of loans), excluding FDIC-assisted acquired loans and mortgage loans held for sale, decreased $210.0 million, or 4.1%, from $5.13 billion at December 31, 2020, to $4.92 billion at September 30, 2021. This decrease was primarily in other residential (multi-family) loans ($233 million decrease), commercial business loans ($77 million decrease), commercial real estate loans ($45 million decrease) and consumer auto loans ($31 million decrease). The decrease in commercial business loans was primarily the result of repayment of PPP loans and no new PPP loan originations after June 30, 2021. These decreases were offset by increases in construction loans ($135 million increase) and single family real estate loans ($44 million increase). The FDIC-assisted acquired loan portfolios had net decreases totaling $4.9 million and $19.1 million during the three and nine months ended September 30, 2021. Outstanding net loan receivable balances decreased $271.1 million, from $4.30 billion at December 31, 2020 to $4.03 billion at September 30, 2021. For further information about the Company's loan portfolio, please see the quarterly loan portfolio presentation available on the Company's Investor Relations website under "Presentations." Loan commitments and the unfunded portion of loans at the dates indicated were as follows (in thousands):     September 30, 2021   June30, 2021   March31, 2021   December31, 2020   December31, 2019   December31, 2018 Closed non-construction loans with unused available lines                         Secured by real estate (one- to four-family) $ 173,758 $ 173,644 $ 170,353 $ 164,480 $ 155,831 $ 150,948 Secured by real estate (not one- to four-family)   23,870   20,269   25,754   22,273   19,512   11,063 Not secured by real estate - commercial business   76,885   75,476   71,132   77,411   83,782   87,480                           Closed construction loans with unused available lines                         Secured by real estate (one-to four-family)   68,441   63,471   52,653   42,162   48,213   37,162 Secured by real estate (not one-to four-family)   866,185   847,486   812,111   823,106   798,810   906,006                           Loan commitments not closed                         Secured by real estate (one-to four-family)   62,096   66,037   93,229   85,917   69,295   24,253 Secured by real estate (not one-to four-family)   126,815   55,216   50,883   45,860   92,434   104,871 Not secured by real estate - commercial business   3,000   —   3,119   699   —   405                             $ 1,401,050 $ 1,301,599 $ 1,279,234 $ 1,261,908 $ 1,267,877 $ 1,322,188 PROVISION FOR CREDIT LOSSES AND ALLOWANCE FOR CREDIT LOSSES The Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, effective January 1, 2021. The CECL methodology replaces the incurred loss methodology with a lifetime "expected credit loss" measurement objective for loans, held-to-maturity debt securities and other receivables measured at amortized cost at the time the financial asset is originated or acquired. This standard requires the consideration of historical loss experience and current conditions adjusted for reasonable and supportable economic forecasts. Our 2020 financial statements were prepared under the incurred loss methodology standard. Upon adoption of the CECL accounting standard, we increased the balance of our allowance for credit losses related to outstanding loans by $11.6 million and created a liability for potential losses related to the unfunded portion of our loans and commitments of approximately $8.7 million. The after-tax effect reduced our retained earnings by approximately $14.2 million. The adjustment was based upon the Company's analysis of then-current conditions, assumptions and economic forecasts at January 1, 2021. Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in the national unemployment rate, commercial real estate price index, housing price index and national retail sales index. Worsening economic conditions from the COVID-19 pandemic, higher inflation or interest rates, or other factors may lead to increased losses in the portfolio and/or requirements for an increase in provision expense. Management maintains various controls in an attempt to limit future losses, such as a watch list of problem loans and potential problem loans, documented loan administration policies and loan review staff to review the quality and anticipated collectability of the portfolio. Additional procedures provide for frequent management review of the loan portfolio based on loan size, loan type, delinquencies, financial analysis, on-going correspondence with borrowers and problem loan work-outs. Management determines which loans are potentially uncollectible, or represent a greater risk of loss, and makes additional provisions to expense, if necessary, to maintain the allowance at a satisfactory level. During the quarter ended September 30, 2021, the Company recorded a negative provision expense of $3.0 million on its portfolio of outstanding loans, compared to a $4.5 million provision expense recorded for the quarter ended September 30, 2020. During the nine months ended September 30, 2021, the Company recorded a negative provision expense of $3.7 million on its portfolio of outstanding loans, compared to a $14.4 million provision expense recorded for the nine months ended September 30, 2020. Total net charge-offs (recoveries) were $(27,000) and $63,000 for the three months ended September 30, 2021 and 2020, respectively. Total net charge-offs were $9,000 and $427,000 for the nine months ended September 30, 2021 and 2020, respectively. The provision for losses on unfunded commitments for the three months ended September 30, 2021 was $643,000 compared to a negative provision expense of $339,000 for the nine months ended September 30, 2021. The level and mix of unfunded commitments resulted in a decrease in the required reserve for such potential losses in the nine month period. General market conditions and unique circumstances related to specific industries and individual projects contributed to the level of provisions and charge-offs. In 2020, due to the COVID-19 pandemic and its effects on the overall economy and unemployment, the Company increased its provision for credit losses and increased its allowance for credit losses, even though actual realized net charge-offs were very low. The Bank's allowance for credit losses as a percentage of total loans was 1.56%, 1.32% and 1.56% at September 30, 2021, December 31, 2020 and June 30, 2021, respectively. Prior to January 1, 2021, the ratio excluded the FDIC-assisted acquired loans. Management considers the allowance for credit losses adequate to cover losses inherent in the Bank's loan portfolio at September 30, 2021, based on recent reviews of the Bank's loan portfolio and current economic conditions. If challenging economic conditions were to last longer than anticipated or deteriorate further or management's assessment of the loan portfolio were to change, additional loan loss provisions could be required, thereby adversely affecting the Company's future results of operations and financial condition. ASSET QUALITY Prior to adoption of the CECL accounting standard on January 1, 2021, FDIC-assisted acquired non-performing assets, including foreclosed assets and potential problem loans, were not included in the totals or in the discussion of non-performing loans, potential problem loans and foreclosed assets. These assets were initially recorded at their estimated fair values as of their acquisition dates and accounted for in pools. The loan pools were analyzed rather than the individual loans. The performance of the loan pools acquired in each of the Company's five FDIC-assisted transactions has been better than expectations as of the acquisition dates. In the tables below, FDIC-assisted acquired assets are included in their particular collateral categories and then the total FDIC-assisted acquired assets are subtracted from the total balances. At September 30, 2021, non-performing assets, excluding all FDIC-assisted acquired assets, were $5.2 million, an increase of $1.4 million from $3.8 million at December 31, 2020, and a decrease of $325,000 from $5.5 million at June 30, 2021. Non-performing assets, excluding all FDIC-assisted acquired assets, as a percentage of total assets were 0.10% at September 30, 2021, compared to 0.07% at December 31, 2020 and 0.10% at June 30, 2021. As a result of changes in balances and composition of the loan portfolio, changes in economic and market conditions and other factors specific to a borrower's circumstances, the level of non-performing assets will fluctuate. Compared to December 31, 2020 and June 30, 2021, and excluding all FDIC-assisted acquired loans, non-performing loans increased $2.0 million and decreased $343,000, respectively, to $5.0 million at September 30, 2021, and foreclosed and repossessed assets decreased $625,000 and increased $18,000, respectively, to $152,000 at September 30, 2021. Including all FDIC-assisted acquired loans, when compared to December 31, 2020 and June 30, 2021, non-performing loans decreased $171,000 and decreased $636,000, respectively, to $7.9 million at September 30, 2021, and foreclosed and repossessed assets decreased $266,000 and increased $208,000, respectively, to $957,000 at September 30, 2021. Non-performing one- to four-family residential loans comprised $3.0 million, or 43.0%, of the total non-performing loans at September 30, 2021, a decrease of $76,000 from June 30, 2021. The majority of the non-performing FDIC-assisted acquired loans are in the one- to four-family category. Non-performing commercial real estate loans comprised $2.6 million, or 37.2%, of the total non-performing loans at September 30, 2021, a decrease of $710,000 from June 30, 2021. Non-performing consumer loans comprised $799,000, or 11.5%, of the total non-performing loans at September 30, 2021, a decrease of $70,000 from June 30, 2021. Non-performing construction and land development loans comprised $468,000, or 6.7%, of the total non-performing loans at both September 30, 2021 and June 30, 2021. Non-performing commercial business loans comprised $111,000, or 1.6%, of the total non-performing loans at September 30, 2021, an increase of $12,000 from June 30, 2021. Compared to December 31, 2020 and June 30, 2021, and excluding all FDIC-assisted acquired loans, potential problem loans decreased $1.6 million and $566,000, respectively, to $2.8 million at September 30, 2021. Due to the impact on economic conditions from COVID-19, it is possible that we could experience an increase in potential problem loans in the remainder of 2021. As noted, we experienced an increased level of loan modifications in late March through June 2020; however, total loan modifications were much lower at December 31, 2020, and decreased further at September 30, 2021. In accordance with the CARES Act and guidance from the banking regulatory agencies, we made certain short-term modifications to loan terms to help our customers navigate through the current pandemic situation. Although loan modifications were made, they did not automatically result in these loans being classified as troubled debt restructurings, potential problem loans or non-performing loans. If more severe or lengthier negative impacts of the COVID-19 pandemic occur or the effects of the SBA loan programs and other loan and stimulus programs do not enable companies and individuals to completely recover financially, this could result in additional and/or longer-term modifications, which may be deemed to be troubled debt restructurings, additional potential problem loans and/or additional non-performing loans. Further actions on our part, including additions to the allowance for credit losses, could result. Activity in the non-performing loans categories during the quarter ended September 30, 2021, was as follows:     BeginningBalance,July 1     Additionsto Non-Performing     Removedfrom Non-Performing     Transfersto PotentialProblemLoans     Transfers toForeclosedAssets andRepossessions     Charge-Offs     Payments     EndingBalance,September 30                                                             (In thousands)       One- to four-family construction $ —   $ —   $ —     $ —   $ —     $ —     $ —     $ — Subdivision construction   —     —     —       —     —       —       —       — Land development   468     —     —       —     —       —       —       468 Commercial construction   —     —     —       —     —       —       —       — One- to four-family residential   3,081     408     (347 )     —     —       (9 )     (128 )     3,005 Other residential   —     —     —       —     —       —       —       — Commercial real estate   3,308     —     —       —     (191 )     —       (519 )     2,598 Commercial business   99     20     —       —     —       —       (8 )     111 Consumer   869     60     (2 )     —     (8 )     (19 )     (101 )     799 Total non-performing loans   7,825     488     (349 )     —     (199 )     (28 )     (756 )     6,981 Less: FDIC-assisted acquired loans   2,439     —     (191 )     —     (191 )     —       (119 )     1,938                                                 Total non-performing loans net of FDIC-assisted acquired loans $ 5,386   $ 488   $ (158 )   $ —   $ (8 )   $ (28 )   $ (637 )   $ 5,043 At September 30, 2021, the non-performing one- to four-family residential category included 45 loans, two of which were added during the current quarter. The largest relationship in the category was added during the current quarter and totaled $351,000, or 11.7% of the total category. The non-performing commercial real estate category included three loans, none of which were added during the current quarter. The largest relationship in the category, which totaled $2.4 million, or 90.7% of the total category, was added during the first quarter of 2021 and is collateralized by an office building in the Chicago, Ill., area. The non-performing consumer category included 38 loans, six of which were added during the current quarter. The non-performing land development category consisted of one loan added during the first quarter of 2021, which totaled $468,000 and is collateralized by unimproved zoned vacant ground in southern Illinois. Activity in the potential problem loans category during the quarter ended September 30, 2021, was as follows:     BeginningBalance,July 1     Additions toPotentialProblem     RemovedfromPotentialProblem     Transfersto Non-Performing     Transfers toForeclosedAssets andRepossessions     Charge-Offs     Payments     EndingBalance,September 30     (In thousands)       One- to four-family construction $ —   $ —   $ —     $ —   $ —     $ —     $ —     $ — Subdivision construction   17     —     —       —     —       —       (1 )     16 Land development   —     —     —       —     —       —       —       — Commercial construction   —     —     —       —     —       —       —       — One- to four-family residential   1,805     —     (314 )     —     —       —       (30 )     1,461 Other residential   —     —     —       —     —       —       —       — Commercial real estate   2,477     —     (516 )     —     —       —       (20 )     1,941 Commercial business   —     —     —       —     —       —       —       — Consumer   396     61     —       —     (40 )     (6 )     (34 )     377 Total potential problem loans   4,695     61     (830 )     —     (40 )     (6 )     (85 )     3,795 Less: FDIC-assisted acquired loans   1,357     —     (314 )     —     —       —       (20 )     1,023                                                 Total potential problem loans net of FDIC-assisted acquired loans $ 3,338   $ 61   $ (516 )   $ —   $ (40 )   $ (6 )   $ (65 )  .....»»

Category: earningsSource: benzingaOct 20th, 2021

Transcript: Soraya Darabi

     The transcript from this week’s, MiB: Soraya Darabi, TMV, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This… Read More The post Transcript: Soraya Darabi appeared first on The Big Picture.      The transcript from this week’s, MiB: Soraya Darabi, TMV, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I have an extra special guest. Her name is Soraya Darabi. She is a venture capital and impact investor who has an absolutely fascinating background working for, first with the New York Times Social Media Group then with a startup that eventually gets purchased by OpenTable, and then becoming a venture investor that focuses on women and people of color-led startups which is not merely a way to, quote-unquote, “do good” but it’s a broad area that is wildly underserved by the venture community and therefore is very inefficient. Meaning, there’s a lot of upside in this. You can both do well and do good by investing in these areas. I found this to be absolutely fascinating and I think you will also, if you’re at all interested in entrepreneurship, social media startups, deal flow, how funds identify who they want to invest in, what it’s like to actually experience an exit as an entrepreneur, I think you’ll find this to be quite fascinating. So with no further ado, my conversation with TMV’s Soraya Darabi. VOICEOVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. My special guest this week is Soraya Darabi. She is the Co-Founder and General Partner of TMV, a venture capital firm that has had a number of that exits despite being relatively young, 65 percent of TMV’s startups are led by women or people of color. Previously, she was the cofounder of Foodspotting, an app named App of the Year by Apple and Wire that was eventually purchased by OpenTable. Soraya Darabi, welcome to Bloomberg. SORAYA DARABI; GENERAL PARTNER & FOUNDER; TMV: My goodness, Barry, thank you for having me. RITHOLTZ: I’ve been looking forward to this conversation since our previous discussion. We were on a Zoom call with a number of people discussing blockchain and crypto when it was really quite fascinating and I thought you had such an unusual and interesting background, I thought you would make a perfect guest for the show. Let’s start with your Manager of Digital Partnerships and Social Media at the “New York Times” when social media was really just ramping up. Tell us about what that was like. Tell us what you did in the late aughts at The Times. DARABI: Absolutely. I was fresh faced out of a university. I had recently graduated with mostly a journalism concentration from Georgetown and did a small stint in Condé Nast right around the time they acquired Reddit for what will soon be nothing because Reddit’s expecting to IPO at around 15 billion. And that experience at Reddit really offered me a deep understanding of convergence, what was happening to digital media properties as they partnered for the first time when nascent but scaling social media platforms. And so the “New York Times” generously offered me a role that was originally called manager of buzz marketing. I think that’s what they called social media in 2006 and then that eventually evolved into manager of digital partnerships and social media which, in essence, meant that we were aiming to be the first media property in the world to partner with companies that are household names today but back in the they were fairly unbalanced to Facebook and Twitters, of course, but also platforms that really took off for a while and then plateaued potentially. The Tumblers of the world. And it was responsibility to understand how we could effectively generate an understanding of the burgeoning demographics of this platform and how we could potentially bring income into The Times for working with them, but more importantly have a journalist that could authentically represent themselves on new media. And so, that was a really wonderful role to have directly out of University and then introduce me to folks with whom I still work today. DARABI: That’s quite interesting. So when you’re looking at a lot of these companies, you mentioned Facebook and Twitter and Tumbler, how do you know if something’s going to be a Facebook or a MySpace, so Twitter or a Tumbler, what’s going to survive or not, when you’re cutting deals with these companies on behalf of The Times, are you thinking in terms of hey, who’s going to stick around, wasn’t that much earlier that the dot-com implosion took place prior to you starting with The Times? DARABI: It’s true, although I don’t remember the dot-com implosion. So, maybe that naivete helped because all I had was enthusiasm, unbridled enthusiasm for these new companies and I operated then and now still with a beta approach to business. Testing out new platforms and trying to track the data, what’s scaling, what velocity is this platform scaling and can we hitch a ride on the rochet ship if they will so allow. But a lot of our partnerships then and now, as an investor, are predicated upon relationships. And so, as most, I think terrific investors that I listen to, who I listen to in your show, at least, will talk to you about the importance of believing and the founder and the founder’s vision and that was the case back then and remains the case today. RITHOLTZ: So, when you were at The Times, your tenure there very much overlapped the great financial crisis. You’re looking at social media, how did that manifest the world of social media when it looked like the world of finance was imploding at that time? DARABI: Well, it was a very interesting time. I remember having, quite literally, 30-second meetings with Sorkin as he would run upstairs to my floor, in the eighth floor, to talk about a deal book app that we wanted to launch and then he’d ran back down to his desk to do much more important work, I think, and — between the financial crisis to the world. So, 30-second meetings aside, it was considered to be, in some ways, a great awakening for the Web 2.0 era as the economy was bottoming out, like a recession, it also offered a really interesting opportunity for entrepreneurs, many of whom had just been laid off or we’re looking at this as a sizeable moment to begin to work on a side hustle or a life pursuit. And so, there’s — it’s unsettling, of course, any recession or any great awakening, but lemonade-lemons, when the opening door closing, there was a — there was a true opportunity as well for social media founders, founders focusing on convergence in any industry, really, many of which are predicated in New York. But again, tinkering on an idea that could ultimately become quite powerful because if you’re in the earliest stage of the riskiest asset class, big venture, there’s always going to be seed funding for a great founder with a great idea. And so, I think some of the smartest people I’d ever met in my life, I met at the onset of the aftermath of that particular era in time. RITHOLTZ: So you mentioned side hustle. Let’s talk a little bit about Foodspotting which is described as a visual geolocal guide to dishes instead of restaurants which sounds appealing to me. And it was named App of the Year by both Apple and Wired. How do you go from working at a giant organization like The Times to a startup with you and a cofounder and a handful of other coders working with you? DARABI: Well, five to six nights a week after my day job at the “New York Times,” I would go to networking events with technologists and entrepreneurs after hours. I saw that a priority to be able to partner from the earliest infancy with interesting companies for that media entity. I need to at least know who these founders were in New York and Silicon Valley. And so, without a true agenda other than keen curiosity to learn what this business were all about, I would go to New York tech meetup which Scott Heiferman of meetup.com who’s now in charge LP in my fund would create. And back then, the New York Tech Meetup was fewer than 40 people. I believe it’s been the tens of thousands now. RITHOLTZ: Wow, that’s … DARABI: In New York City alone. And so, it was there that I met some really brilliant people. And in particular, a gentleman my age who’s building a cloud-computing company that was essentially arbitraging AWS to repopulate consumer-facing cloud data services for enterprises, B2B2C play. And we all thought it would be Dropbox. The company ultimately wasn’t, but I will tell you the people with whom I worked with that startup because I left the “New York Times” to join that startup, to this day remain some of the most successful people in Silicon Valley and Alley. And actually, one of those persons is a partner at our firm now, Darshan. He was the cofounder of that particular company which is called drop.io. but I stayed there very quickly. I was there for about six months. But at that startup, I observed how a young person my age could build a business, raise VC, he was the son of a VC and so he was exceptionally attuned to the changing landscape of venture and how to position the company so that it would be attractive to the RREs of the world and then the DFJs. And I … RITHOLTZ: Define those for us. RREs and BFJs. DARABI: Sorry. Still, today, very relevant and very successful venture capital firms. And in particular, they were backing a lot of the most interesting ideas in Web 2.0 era when I joined this particular startup in 2010. Well, that startup was acquired by Facebook and I often say, no, thanks to me. But the mafia that left that particular startup continues to this day to coinvest with one another and help one another’s ideas to exceed. And it was there that I began to build the confidence, I think, that I really needed to explore my own entrepreneurial ideas or to help accelerate ideas. And Foodspotting was a company that I was advising while at that particular startup, that was really taking off. This was in the early days of when Instagram was still in beta and we observed that the most commonly posted photos on Instagram were of food. And so, by following that lead, we basically built an app as well that activity that continues to take place every single day. I still see food photos on Twitter every time I open up my stream. And decided to match that with an algorithm that showed folks wherever they were in the world, say in Greece, that might want spanakopita or if I’m in Japan, Okinawa, we help people to discover not just the Michelin-rated restaurants or the most popular local hunt in New York but rather what’s the dish that they should be ordering. And then the app was extremely good was populating beautiful photos of that particular dish and then mirroring them with accredited reviews from the Zagats of the world but also popular celebrity shots like Marcus Samuelsson in New York. And that’s why we took off because it was a cult-beloved app of its time back when there were only three geolocation apps in the iTunes apparently store. It was we and Twitter and Foursquare. So, there was a first-mover advantage. Looking back in hindsight, I think we sold that company too soon. OpenTable bought the business. A year and a half later, Priceline bought OpenTable. Both were generous liquidity events for the founders that enabled us to become angel investors. But sometimes I wish that that app still existed today because I could see it being still incredibly handy in my day-to-day life. RITHOLTZ: To say the least. So did you have to raise money for Foodspotting or did you just bootstrapped it and how did that experience compare with what that exit was like? DARABI: We did. We raised from tremendous investors like Aydin Senkut of Felicis Ventures whom I think of as being one of the best angel investors of the world. He was on the board. But we didn’t raise that much capital before the business is ultimately sold and what I learned in some of those early conversations, I would say, that may have ultimately led to LOIs and term sheets was that so much of M&As about wining and dining and as a young person, particularly for me, you and I discussed before the show, Barry, we’re both from New York, I’m not from a business-oriented family to say the least. My mom’s an academic, my father was a cab driver in New York City. And so, there are certain elements of this game, raising venture and ultimately trying to exit your company, that you don’t learn from a business book. And I think navigating that as a young person was complicated if I had to speak economically. RITHOLTZ: Quite fascinating. What is purposeful change? DARABI: Well, the world purpose, I suppose, especially in the VC game could come across as somewhat of a cliché. But we try to be as specific as possible when we allude to the impact that our investment could potentially make. And so, specifically, we invest in five verticals at our early stage New York City-based venture fund. We invest in what we call the care economy, just companies making all forms of care, elder care to pet care to health care, more accessible and equitable. We invest in financial inclusion. So this is a spin on fintech. These are companies enabling wealth creation, education, and most importantly literacy for all, that I think is really important to democratization of finance. We invest in the future of work which are companies creating better outcomes for workers and employees alike. We invest in the future of work which are companies creating better outcomes for workers and employers alike. We invest in purpose as it pertains to transportation. So, not immediately intuitive but companies creating transparency and efficiency around global supply chain and mobility. I’m going to talk about why we pick that category in a bit. And sustainability. So, tech-enabled sustainable solutions. These are companies optimizing for sustainability from process to product. With these five verticals combined, we have a subspecies which is that diverse founders and diverse employee bases and diverse cap table. It is not charity, it’s simply good for business. And so, in addition to being hyper specific about the impact in which we invest, we also make it a priority and a mandate at our firm to invest in the way the world truly look. And when we say that on our website, we link to census data. And so, we invest in man and women equally. We invest in diverse founders, almost all of the time. And we track this with data and precious to make sure that our investments reflect not just one zip code in California but rather America at large. RITHOLTZ: And you have described this as non-obvious founders. Tell us a little bit about that phrase. DARABI: Well, not obvious is a term you hear a lot when you go out to Silicon Valley. And I don’t know, I think it was coined by a well-known early PayPal employee turned billionaire turned investor who actually have a conference centered around non-obvious ideas. And I love the phrase. I love thinking about investment PC that are contrary because we have a contrary point of view, contrarian point of view, you often have outlier results because if you’re right, you’re taking the risk and your capturing the reward. When you’re investing in non-obvious founders, it should be that is the exact same outcome. And so, it almost sort of befuddled me as a person with a hard to pronounce name in Silicon Valley, why it was that we’re an industry that prides itself on investing in innovation and groundbreaking ideas and the next frontier of X, Y, and Z and yet all of those founders in which we were investing, collectively, tended to kind of look the same. They were coming from the same schools and the same types of families. And so, to me, there was nothing innovative at all about backing that Wharton, PSB, HBS guy who is second or third-generation finance. And what really excites me about venture is capturing a moment in time that’s young but also the energy is palpable around not only the idea in which the founder is building but the categories of which they’re tackling and that sounded big. I’ll be a little bit more speficic. And so, at TMV, we tried to see things before they’re even coming around the bend. For instance, we were early investors in a company called Cityblock Health which is offering best in class health care specifically for low income Americans. So they focus on the most vulnerable population which are underserved with health care and they’re offering them best in class health care access at affordable pricing because it’s predominantly covered through a payer relationship. And this company is so powerful to us for three reasons because it’s not simply offering health care to the elite. It’s democratizing access to care which I think is absolutely necessary in term out for success of any kind. We thought this was profoundly interesting because the population which they serve is also incredibly diverse. And so when you look at that investment over, say, a comparable company, I won’t name names, that offers for-profit health care, out-of-pocket, you can see why this is an opportunity that excites us as impact investors but we don’t see the diversity of the team it’s impact. We actually see that as their unfair advantage because they are accessing a population authentically that others might ignore. RITHOLTZ: Let me see if I understand this correctly. When you talk about non-obvious find — founders and spaces like this, what I’m hearing from you is you’re looking at areas where the market has been very inefficient with how it allocates capital … DARABI: Yes. RITHOLTZ: … that these areas are just overlooked and ignored, hey, if you want to go on to silicon valley and compete with everybody else and pay up for what looks like the same old startup, maybe it will successful and maybe it won’t, that’s hypercompetitive and hyper efficient, these are areas that are just overlooked and there is — this is more than just do-goodery for lack of a better word. There are genuine economic opportunities here with lots of potential upside. DARABI: Absolutely. So, my business partner and I, she and I found each other 20 years ago as undergrads at Georgetown but we went in to business after she was successful and being one of the only women in the world to take a shipping business public with her family, and we got together and we said we have a really unique access, she and I. And the first SPV that we collaborated on back in 2016 was a young business at the time, started by two women, that was focused on medical apparel predominantly for nurses. Now it’s nurses and doctors. And they were offering a solution to make medical apparel, so scrubs, more comfortable and more fashionable for nurses. I happen to have nurses and doctors in my family so doing due diligence for this business is relatively simple. I called my aunt who’s a nurse practitioner, a nurse her life, and she said, absolutely. When you’re working in a uniform at the hospital, you want something comfortable with extra pockets that makes you look and feel good. The VCs that they spoke to at the time, and they’ve been very public about this, in the beginning, anyway, were less excited because they correlated this particular business for the fashion company. But if you look back at our original memo which I saved, it says, FIGS, now public on the New York Stock Exchange is a utility business. It’s a uniform company that can verticalize beyond just medical apparel. And so, we helped value that company at 15 million back in 2016. And this year, in 2021, they went public at a $7 billion market cap. RITHOLTZ: Wow. DARABI: And so, what is particularly exciting for us going back to that conversation on non-obvious founders is that particular business, FIGS, was the first company in history to have two female co-founders go public. And when we think of success at TMV, we don’t just think about financial success and IRR and cash on cash return for our LPs, of course we think about that. But we also think who are we cheerleading and with whom do we want to go into business. I went to the story on the other side of the fence that we want to help and we measure non-obvious not just based on gender or race because I think that’s a little too precise in some ways. Sometimes, for us non-obvious, is around geography, I would say. I’m calling you from Athens, as you know, and in Greece, yesterday, I got together with a fund manager. I’m lucky enough to be an LP in her fund and she was talking about the average size of a seed round in Silicon Valley these days, hovering around 30 million. And I was scratching my head because at our fund, TMV, we don’t see that. We’re investing in Baltimore, Maryland, and in Austin, Texas and the average price for us to invest in the seed round is closer to 5 million or 6 million. And so, we actually can capture larger ownership of the pie early on and then develop a very close-knit relationship with these founders but might not be as networked in the Valley where there’s 30 VC funds to everyone that exist in Austin, Texas. RITHOLTZ: Right. DARABI: And so, yes, I think you’re right to say that it’s about inefficiencies in market but also just around — about being persistent and looking where others are not. RITHOLTZ: That’s quite intriguing. Your team is female-led. You have a portfolio of companies that’s about 65 percent women and people of color. Tell us how you go about finding these non-obvious startups? DARABI: It’s a good question. TMV celebrates its five-year anniversary this year. So the way we go about funding companies now is a bit different than the way we began five years ago. Now, it’s systematic. We collectively, as a partnership, there are many of us take over 50 calls a month with Tier 1 venture capital firms that have known us for a while like the work that we do, believe in our value-add because the partnership comprised of four more operators. So, we really roll up our sleeves to help. And when you’ve invested at this firms, enough time, they will write to you and say I found a company that’s a little too early for us, for XYZ reason, but it resonates and I think it might be for you. So we found some of our best deals that way. But other times, we found our deal flow through building our own communities. And so, when I first started visit as an EM, an emerging manager of a VC firm. And roughly 30 percent of LP capital goes to EM each year but that’s sort of an outsized percentage because when you think about the w-fix-solve (ph) addition capital, taking 1.3 billion of that pie, then you recognize the definition of emerging manager might need to change a bit. So, when I was starting as an EM, I recognize that the landscape wasn’t necessarily leveled. If you weren’t, what’s called the spinout, somebody that has spent a few years at a traditional established blue-chip firm, then it’s harder to develop and cultivate relationships with institutional LPs who will give you a shot even though the data absolutely points to there being a real opportunity in capturing lightning in a bottle if you find a right EM with the right idea in the right market conditions which is certainly what we’re in right now. And so, I decided to start a network specifically tailored around helping women fund managers, connecting one another and it began as a WhatsApp group and a weekly Google Meet that has now blown into something that requires a lot of dedicated time. And so we’re hiring an executive director for this group. They’re called Transact Global, 250 women ex-fund managers globally, from Hong Kong, to Luxembourg, to Venezuela, Canada, Nigeria, you name it. There are women fund managers in our group and we have one of the most active deal flow channels in the world. And so two of our TMV deals over the last year, a fintech combatting student debt and helping young Americans save for retirement at the same time, as an example, came from this WhatsApp deal flow channel. So, I think creating the community, being the change, so to speak, has been incredibly effective for us a proprietary deal flow mechanism. And then last but not least, I think that having some sort of media presence really has helped. And so, I’ve hosted a podcast and I’ve worked on building up what I think to be a fairly organic Twitter following over the years and we surprise ourselves by getting some really exceptional founders cold pitching us on LinkedIn and on Twitter because we make ourselves available as next gen EMs. So, that’s a sort of long-winded answer to your question. But it’s not the traditional means by any means. RITHOLTZ: To say the least. Are you — the companies you’re investing in, are they — and I’ll try and keep this simple for people who are not all that well-versed in the world of venture, is it seed stage, is it the A round, the B round? How far into their growth process do you put money in? DARABI: So it is a predominantly seed fund. We call our investments core investments. So, these are checks that average, 1 and 1.5 million. So for about 1.25 million, on average, we’re capturing 10-15% of a cap payable. And in this area, that’s called a seed round. It will probably be called a Series A 10 years ago. RITHOLTZ: Right. DARABI: And then we follow on through the Series A and it max around, I think, our pro rata at the B. So, our goal via Series B is to have, on average, 10% by the cap. And then we give ourselves a little bit of wiggle room with our modeling. We take mars and moonshot investments with smaller checks so we call these initial interest checks. And initial interest means I’m interested but your idea is still audacious, they won’t prove itself out for three or four years or to be very honest, we weren’t the first to get into this cap or you’re picking Sequoia over us, so we understand but let’s see if we can just promise you a bit of value add to edge our way into your business. RITHOLTZ: Right. DARABI: And oftentimes, when you speak as a former founder yourself with a high level of compassion and you promise with integrity that you’re going to work very hard for that company, they will increase the size of their round and they will carve out space for you. And so, we do those types of investments rarely, 10 times, in any given portfolio. But what’s interesting in looking back at some of our outliers from found one, it came from those initial interest checks. So that’s our model in a nutshell. We’re pretty transparent about it. What we like about this model is that it doesn’t make us tigers, we’re off the board by the B, so we’re still owning enough of the cap table to be a meaningful presence in the founder’s lives and in their business and it allows us to feel like we’re not spraying and praying. RITHOLTZ: Spraying and praying is an amusing term but I’m kind of intrigued by the fact that we use to call it smart money but you’re really describing it as value-added capital when a founder takes money from TMV, they’re getting more than just a check, they’re getting the involvement from entrepreneurs who have been through the process from startup to capital raise to exit, tell us a li bit about how that works its way into the deals you end up doing, who you look at, and what the sort of deal flow you see is like. DARABI: Well, years ago, I had the pleasure of meeting a world-class advertiser and I was at his incredibly fancy office down in Wall Street, his ad agency. And he described to me with pride how he basically bartered his marketing services for one percent of a unicorn. And he was sort of showing off of it about how, from very little time and effort, a few months, he walked away with a relatively large portion of a business. And I thought, yes, that’s clever. But for the founder, they gave up too much of their business too soon. RITHOLTZ: Right. DARABI: And I came up with an idea that I floated by Marina back in the day where our original for TMV Fund I began with the slide marketing as the future of venture and venture is the future of marketing. Meaning, it’s a VC fund where the position itself more like an ad agency but rather than charging for its services, it’s go-to-market services. You offer them free of charge but then you were paid in equity and you could quantify the value that you were offering to these businesses. And back then, people laughed us even though all around New York City, ad agencies were really doing incredible work and benefiting from the startups in that ecosystem. And so, we sort of changed the positioning a bit. And now, we say to our LPs and to our founders, your both clients of our firm. So, we do think of ourselves as an agency. But one set of our marketplace, you have LPs and what they want is crystal clear. The value that they derive from us is through a community and connectivity and co-investment and that’s it. It’s pretty kind of dry. Call me up once a year where you have an exceptional opportunity. Let me invest alongside you. Invite me to dinners four times a year, give me some information and a point of view that I can’t get elsewhere. Thank you for your time. And I love that. It’s a great relationship to have with incredibly smart people. It’s cut and dry but it’s so different. What founders want is something more like family. They want a VC on their board that they can turn to during critical moments. Two a.m. on a Saturday is not an uncommon time for me to get a text message from a founder saying what do I do. So what they want is more like 24/7 services for a period of time. And they want to know when that relationship should start and finish. So it’s sort of the Montessori approach to venture. We’re going to tell them what we’re going to tell them. Tell them what they’re telling them. Tell them what we told them. We say to founders with a reverse pitch deck. So we pitch them as they’re pitching us. Here’s what we promise to deliver for you for the first — each of the 24 months of your infancy and then we promise you we’ll mostly get lost. You can come back to use when your business is growing if you want to do it tender and we’ll operate an SPV for you for you or if you simply want advice, we’re never going to ignore you but our specialty, our black belt, if you will, Barry, is in those first 24 months of your business, that go-to-market. And so, we staffed up TMV to include, well, it’s punching above our weight but the cofounder of an exceptionally successful consumer marketing business, a gross marketer, a recruiter who helps one of our portfolio companies hire 40 of their earliest employees. We have a PR woman. You’ve met Viyash (ph), she’s exceptional with whom, I don’t know, how we would function sometimes because she’s constantly writing and re-editing press releases for the founders with which we work. And then Anna, our copywriter who came from IAC and Sean, our creative director, used to be the design director for Rolling Stone, and I can go on and on. So, some firms called us a platform team but we call it the go-to-market team. And then we promise a set number of hours for ever company that we invest into. RITHOLTZ: That’s … DARABI: And then the results — go ahead. RITHOLTZ: No, that’s just — I’m completely fascinated by that. But I have to ask maybe this is an obvious question or maybe it’s not, so you — you sound very much like a non-traditional venture capital firm. DARABI: Yes. RITHOLTZ: Who are your limited partners, who are your clients, and what motivates them to be involved with TMV because it sounds so different than what has been a pretty standard model in the world of venture, one that’s been tremendous successful for the top-tier firms? DARABI: Our LP set is crafted with intention. And so, 50% of our investors are institutional. This concludes institutional-sized family offices and family offices in a multibillions. We work with three major banks, Fortune 500 banks. We work with a couple of corporate Fortune 500 as investors or LPs and a couple of fund to funds. So that’s really run of the mill. But 50 percent of our investors and that’s why I’m in Athens today are family offices, global family offices, that I think are reinventing with ventures like, to look like in the future because wealth has never been greater globally. There’s a trillion dollars of assets that are passing to the hands of one generation to the next and what’s super interesting to me, as a woman, is that historically, a lot of that asset transferred was from father to son, but actually, for the first time in history, over 50 percent, so 51% of those asset inheritors are actually women. And so, as my business partner could tell because she herself is a next gen, in prior generations, women were encouraged to go into the philanthropic or nonprofit side of the family business … RITHOLTZ: Right. DARABI: And the sons were expected to take over the business or the family office and all of that is completely turned around in the last 10 years. And so, my anchor investor is actually a young woman. She’s under the age of 35. There’s a little bit of our firm that’s in the rocks because we’re not playing by the same rules that the establishment has played by. But certainly, we’re posturing ourselves to be able to grow in to a blue-chip firm which is why we want to maintain that balance, so 50 percent institutional and 50 percent, I would call it bespoke capital. And so, the LPs that are bespoke, we work at an Australian family office and Venezuelan family office and the Chilean family office and the Mexican family office and so on. For those family offices, we come to them, we invite them to events in New York City, we give them personalized introductions to our founders and we get on the phone with them. Whenever they’d like, we host Zooms. We call them the future of everything series. They can learn from us. And we get to know them as human beings and I think that there’s a reason why two thirds of our Fund I LPs converted over into Fund II because they like that level of access, it’s what the modern LP is really looking for. RITHOLTZ: Let’s talk a little bit about some of the areas that you find intriguing. What sectors are really capturing your attention these days? What are you most excited about? DARABI: Well, Barry, I’m most excited about five categories for which we’ve been investing for quite some time, but they’re really being accelerated due to the 2020 pandemic and a looming recession. And so, we’re particularly fascinated by not just health care investing as has been called in the past but rather the care economy. I’m not a huge fan of the term femtech, it always sounds like fembot to me. But care as it pertains to women alone is a multitrillion dollar opportunity. And so, when we think of the care economy, we think of health care, pet care, elder care, community care, personal care as it pertains to young people, old people, men, women, children, we bifurcate and we look for interesting opportunities that don’t exist because they’ve been undercapitalized, undervalued for so long. Case in point, we were early investors Kindbody, a reproductive health care company focused on women who want to preserve their fertility because if you look at 2010 census data, you can see that the data has been there for some time that women, in particular, were delaying marriage and childbirth and there are a lot of world-famous economists who will tell you this, the global population will decline because we’re aging and we’re not necessarily having as many children as we would have in the past plus it’s expensive. And so, we saw that as investors as a really interesting opportunity and jumped on the chance to ask Gina Bartasi who’s incredible when she came to us with a way to make fertility preservation plus expenses. So she followed the B2C playbook and she started with the mobile clinic that helps women freeze their eggs extensively. That company has gone on to raise hundreds — pardon me — and that company is now valued in the hundreds of million and for us, it was as simple as following our intuition as women fund managers, we know what our peers are thinking about because we talk to them all the time and I think the fact that we’re bringing a new perspective to venture means that we’re also bringing a new perspective to what has previously been called femtech. We invest in financial inclusion. Everyone in the world that’s investing fintech, the self-directed financial mobile apps are always going to be capitalized especially in a post Robin Hood era but we’re specifically interested in the democratization of access to financial information and we’re specifically interested in student debt and alleviating student debt in America because not only is it going to be one of the greatest challenges our generation will have to overcome, but it’s also prohibiting us from living out the American dream, $1.7 trillion of student debt in America that needs to be alleviated. And then we’re interested in the future of work, and long have been, that certainly was very much accelerated during the pandemic but we’ve been investing in the 1099 and remote work for quite some time. And so, really proud to have been the first check into a company called Bravely which is an HR chatbot that helps employees inside of a company chat a anonymously with HR representatives outside of that company, that’s 1099. That issue is like DEI, an inclusion and upward mobility and culture setting and what to do when you’re all of a sudden working for home. So that’s an example of a future of work business. And then in the tech-enabled sustainable solutions category, it’s a mouthful, let’s call that sustainability, we are proud to have been early investors of a company called Ridwell, out of Seattle Washington, focused on not just private — privatized recycling but upcycling and reconnaissance. Where are our things going when we recycle them? For me, it always been a pretty big question. And so, Ridwell allows you to re and upcycle things that are hard to get rid of out of your home like children’s eyeglasses and paints and battery, single-use plastic. And it shows you where those things are going which I think is super cool and there’s good reason why it has one of the highest NPS scores, Net Promoter Scores, of any company I’ve ever worked with. People are craving this kind of modern solution. And last but not least, we invest in transportation and part because of the unfair advantage my partner, Marina, brings to TMV as she comes from a maritime family. And so, we can pile it, transportation technology, within her own ecosystem. That’s pretty great. But also, because we’re just fascinated by the fact that 90 percent of the world commodities move on ship and the biggest contributor to emissions in the world outside of corporate is coming from transportation. SO, if we can sort of figure out this industry, we can solve a lot of the problems that our generation are inheriting. Now, these categories might sound massive and we do consider ourselves a generalist firm but we stick to five-course sectors that we truly believe in and we give ourselves room to kick out a sector or to add a new one with any given new fund. For the most part, we haven’t needed to because this remain the categories that are not only most appealing to us as investors but I think paramount to our generation. RITHOLTZ: That’s really intriguing. Give us an example of moonshot or what you called earlier, a Mars shot technology or a company that can really be a gamechanger but may not pay off for quite a while. DARABI: We’ve just backed a company that is focusing on food science. Gosh, I can’t give away too much because they haven’t truly launched in the U.S. But maybe I’ll kind of allude to it. They use crushed produce, like, crush potato skins to make plastic but biodegrades. And so, it’s a Mars shot because it’s a materials business and it’s a food science business rolled off into both the CPG business and an enterprise business. This particular material can wrap itself around industrial pellets. Even though it’s audacious, it’s not really a Mars shot when you think about the way the world is headed. Everybody wants to figure out how do we consume less plastic and recycle plastic better. And so, if there are new materials out there that will not only disintegrate but also, in some ways, feed the environment, it will be a no-brainer and then if you add to the equation the fact that it could be maybe not less expensive but of comparable pricing to the alternative, I can’t think of a company in the world that wouldn’t switch to this solution. RITHOLTZ: Right. So this is plastic that you don’t throw away. You just toss in the garden and it becomes compost? DARABI: Yes, exactly. Exactly. It should help your garden grow. So, yes, so that’s what I would call a Mars shot in some ways. But in other ways, it’s just common sense, right? RITHOLTZ: So let’s talk a little bit about your investment vehicles. You guys run, I want to make sure I get this right, two funds and three vehicles, is that right? DARABI: We have two funds. They’re both considered micro funds because they’re both under 100 million and then we operate in parallel for SPVs that are relatively evergreen and they serve as opportunistic investments to continue to double down on our winners. RITHOLTZ: SPV is special purpose investment … DARABI: Vehicles. Yes. RITHOLTZ: Right. DARABI: And the PE world, they’re called sidecars. RITHOLTZ: That’s really interesting. So how do these gets structured? Does everything look very similar when you have a fund? How quickly do you deploy the capital and typically how long you locked for or investors locked up for? DARABI: Well investors are usually in private equity are VC funds locked up for 10 years. That’s not usual. We have shown liquidity faster, certainly, for Fund I. It’s well in the black and it’s only five years old less, four and a half years old. So, how do we make money? We charge standard fees, 2 on 20 is the rubric of it, we operate by. And then lesser fees for sidecars or direct investments. So that’s kind of how we stay on business. When you think about an emerging manager starting their first fund, management fees are certainly not so we can live a lavish rock and roll life on a $10 million fund with a two percent management fee, we’re talking about 200K for the entire business to operate. RITHOLTZ: Wow. DARABI: So Marina and I, not only anchored our first fund with their own capital but we didn’t pay ourselves for four years. It’s not glamorous. I mean, there’s some friends of mine that thing the venture capital life is glam and it is if you’re on Sand Hill Road. But if you’re an EM, it’s a lot more like a startup where you’re burning the midnight oil, you are bartering favors with your friends, and you are begging the smartest people you know to take a chance on you to invite you on to their cap table. But it somehow works out because we do put in that extra effort, I think, the metrics, certainly for Fund I have shown us that we’re in this for the long haul now. RITHOLTZ: So your fund 1 and Fund 2, are there any plans of launching Fund III? DARABI: Yes. I think that given the proof points between Fund I and Fund II and a conversation that my partner and I recently had, five years out, are we in this? Do we love this? We do. OK. This is our life’s work. So you can see larger and more demonstrable sized funds but not in an outsized way, not just because we can raise more capital now but because we want to build out a partnership and the kind of culture that we always dreamed of working for back when we were employees, so we have a very diverse set of colleagues with whom we couldn’t operate and we’ll be adding to the partnership in the next two or three years which is really exciting to say. So, yes, the TMV will be around for a while. RITHOLTZ: That’s really interesting. I want to ask you the question I ask any venture capitalist that I interview. Tell us about your best and worst investments and what did you pass on that perhaps you wish you didn’t? DARABI: Gosh. The FOMO list is so long and so embarrassing. Let me start with what I passed on that I regret. Well, I don’t know she really would have invited me to invest, but certainly, I had a wonderful conversation a peer from high school, Katrina Lake, when she was in beta mode for Stitch Fix. I think she was still at HBS at the time or had just recently graduated from Harvard. When Katrina and I had coffee in Minneapolis were we went to high school and she was telling me about the Netflix for clothing that she was building and certainly I regret not really picking up on the clues that she was offering in that conversation. Stitch Fix had an incredible IPO and I’m a proud shareholder today. And similarly, when my friend for starting Cloudflare which luckily they did bring me in to pre-IPO and I’m grateful for that, but when they were starting Cloudflare, I really should have jumped on that moment or when my buddy Ryan Graves whom I still chat with pretty frequently was starting out Uber in beta with Travis and Garrett, that’s another opportunity that I definitely missed. I was in Ireland when the Series A term sheet assigned. So there’s such a long laundry list of namedropped, namedropped, missed, missed, missed. But in terms of what I’m proud of, I’d say far more. I don’t like Sophie’s Choice. I don’t like to cherry pick the certain investments to just brag about them. But we’ve talked about someone to call today, I’d rather kind of shine a light — look at my track record, right? There’s a large realized IRR that I’m very proud of. But more on the opportunity of the companies that we more recently backed that prevent damages (ph) of CRM for oncology patient that help them navigate through the most strenuous time of their life. And by doing so, get better access to health care. And we get to wrote that check a couple of months ago. But already, it’s becoming a company that I couldn’t be more excited about because if they execute the way I think Shirley and Victor will, that has the power to help so many people in a profound way, not just in the Silicon Valley cliché way of this could change the world but this could actually help people receive better care. So, yes, I’m proud of having been an early investor in the Caspers of the world. Certainly, we’re all getting better sleep. There’s no shame there. But I’m really excited now today at investing in financial inclusion in the care economy and so on. RITHOLTZ: And let’s talk a little bit about impactful companies. Is there any different when you’re making a seed stage investment in a potentially impactful company versus traditional startup investing? DARABI: Well, pre-seed and seed investing isn’t a science and it’s certainly not a science that anyone has perfected. There are people who are incredibly good at it because they have a combination of luck and access. But if you’re a disciplined investor in any asset class and I talk to my friends who run hedge funds and work for hedge funds about 10 bets that they take a day and I think that’s a lot trickier than what I do because our do due diligence process, on average, takes an entire quarter of the year. We’re not making that many investments each year. So even though it sounds sort of fruity, when you look at a Y Combinator Demo Day, Y Comb is the biggest accelerator in Silicon Valley and they produce over 300 companies, three or four times a year. When you look at the outsized valuations coming out of Y Comb, it’s easy to think that starting company is as simple as sort of downloading a company in a Box Excel and running with it. But from where we sit, we’re scorching the earth for really compelling ideas in areas that have yet to converge and we’re looking for businesses that may have never pitched the VC before. Maybe they’re not even seeking capital. Maybe it’s a company that isn’t so interested in raising a penny eventually because they don’t need to. They’re profitable from day one. Those are the companies that we find most exciting because as former operators, we know how to appeal to them and then we also know how to work with them. RITHOLTZ: That’s really interesting. Before I get to my favorite question, let me just throw you’re a curveball, tell me a little bit about Business Schooled, the podcast you hosted for quite a while. DARABI: So, Synchrony, Sync, came to me a few years ago with a very compelling and exciting opportunity to host a podcast with them that allowed me a fortunate opportunity to travel the country and I went to just under a dozen cities to meet with founders who have persevered past their startup phase. And what I loved about the concept of business school is that the cities that I hosted were really focused on founders who didn’t have access to VC capital, they put money on credit card. So I took SBA loans or asked friends and family to give them starter capital and then they made their business work through trying times and when you pass the five-year mark for any business, I’m passing it right now for TMV, there’s a moment of reflection where you can say, wow, I did it. it’s incredibly difficult to be a startup founder, more than 60 percent of companies fail and probably for good reason. And so, yes, I hosted business school, Seasons 2 and 3 and potentially there will be more seasons and I’m very proud of the fact that at one point we cracked the top 20 business podcasts and people seem to be really entertained through these conversations with insightful founders who are vulnerable with me about what it was like to build their business and I like to think they were vulnerable because I have a good amount of compassion for the experience of being founder and also because I’m a New Yorker and I just like to talk. RITHOLTZ: You’re also a founder so there’s going to be some empathy that’s genuine. You went through what they’re going through. DARABI: Exactly. Exactly. And so, what you do, Barry, is quite similar. You’re — you host an exceptionally successful business podcast and you’re also an allocator. You know that it’s interesting to do both because I think that being an investor is a lot like being a journalist. In both professions, you won’t succeed unless you are constantly curious and if you are having conversations to listen more than you speak. DARABI: Well, I’ll let you in on a little secret since it’s so late in the podcast and fewer people will be hearing this, the people I invite on the show are essentially just conversations I want to have. If other people come along and listen, that’s fantastic. But honestly, it’s for an audience of one, namely me, the reason I wanted to have you on is because I’m intrigued by the world of venture and alternatives and impact. I think it’s safe to say that a lot of people have been somewhat disappointed in the results of ESG investing and impact investing that for — it’s captured a lot more mindshare than it has captured capital although we’re seeing signs that’s starting to shift. But then the real question becomes, all right, so I’m investing less in oil companies and more in other companies that just happen to consume fossil fuels, what’s the genuine impact of my ESG investing? It feels like it’s sort of de minimis whereas what you do really feels like it has a major impact for people who are interested in having their capital make a positive difference. DARABI: Thank you for saying that. And I will return the compliment by saying that I really enjoyed getting to know you on our one key economist Zoom and I think that you’re right. I think that ESG investing, certainly in the public markets has had diminished returns historically because the definition has been so bizarre and so all over the place. RITHOLTZ: Right. DARABI: And I read incredible books from people like Antony Bugg-Levine who helps coin the term the Rockefeller Foundation, who originally coined the term you read about, mortgage, IRR and IRS plus measurement and it’s so hard to have just standardization of what it means to be an impact investor and so it can be bothered but we bother. Rather, we kind of come up with our own subjective point of view of the world and we say what does impact mean to us? Certainly, it means not investing in sin stocks but then those sin stocks have to begin somewhere, has to begin with an idea that somebody had once upon a time. And so, whether we are investing in the way the world should look from our perspective. And with that in mind, it doesn’t have to be impact by your grandpa’s VC, it can be impact from modern generation but simply things that behave differently. Some folks with their dollars. People often say, well, my ESG portfolio is underperforming. But then if you dig in to the specifics, are you investing in Tesla? It’s not a pretty good year. Did you back Beyond Meat? Had a great year. And so, when you kind of redefine the public market not by a sleeve and a bank’s version of a portfolio, but rather by company that you think are making demonstrable change in the world, then you can walk away, realizing had I only invested in these companies that are purpose driven, I would have had outsized returns and that’s what we’re trying to deliver on at TMV. That’s the promise. RITHOLTZ: Really, really very, very intriguing. I know I only have you for a few minutes so let’s jump to my favorite questions that I ask all of our guests starting with tell us what you’re streaming these days. Give us your favorite, Netflix, Amazon Prime, or any podcast that are keeping you entertained during the pandemic. DARABI: Well, my family has been binging on 100 Foot Wave on HBO Max which is the story of big wave surfer Garrett McNamara who is constantly surfing the world’s largest waves and I’m fascinated by people who have a mission that’s sort of bigger than success or fame but they’re driven by something and part of that something is curiosity and part of it is insanity. And so not only is it visually stunning to kind of watch these big wave surfers in Portugal, but it’s also a mind trip. What motivates them to get out of bed every day and potentially risk their lives doing something so dangerous and so bananas but also at the same time so brave and heroic. So, highly recommend. I am listening to too many podcasts. I listen to, I don’t know, a stream of things. I’m a Kara Swisher fan, Ezra Klein fan, so they’re both part of the “New York Times” these days. And of course, your podcast, Barry. RITHOLTZ: Well, thank you so much. Well, thank you so much. Let’s talk a little bit about who your early mentors were and who helped shape you career? DARABI: It’s going to sound ungrateful but I don’t think, in like a post lean in definition of the word, I ever truly had a mentor or a sponsor. Now, having said that, I’ve had people who really looked at for me and been incredibly gracious with their time and capital. And so, I would absolutely like to acknowledge that first and foremost. I think about how generous Adam Grant has been with his time and his investments for TMV in Fund I and Fund II and he’s a best-selling author and worked on highest-rated business school professor. So shout out to Adam, if he’s listening or Beth Comstock, the former Vice Chair of GE who has been instrumental in my career for about a decade and a half now. And she is also really leaning in to the TMV portfolio and has become a patient of Parsley Health, an early investment of ours and also an official adviser to the business. So, people like Adam and Beth certainly come to mind. But I don’t know, I just — I’m not sure mentors really exist outside of corporate America anymore and part of the reason why we started Transact Global is to kind of foster the concept of the peer mentor, people who are going through the same thing as you at the same time and allowing that hive mentality with an abundance mentality to catalyze people to kind of go further and faster. RITHOLTZ: Let’s talk about some of your favorite books and what you might reading right now. DARABI: OK, so in the biz book world, because I know your listeners as craving, I’m a big fan of “Negotiation Genius.” I took a crash course with one of the authors, Max Bazerman at the Kennedy School and it was illuminating. I mean, he’s one of the most captivating professors I’ve ever had the pleasure of hearing lecture and this book has really helped me understand the concept of the ZOPA, the Zone of Possible Agreement, and how to really negotiate well. And then for Adam whom I just referenced, of all of his incredible books, my favorite is Give and Take because I try to operate with that approach of business. Give more than you take and maybe in the short term, you’ll feel depleted but in the long term, karma pays off. But mostly, Barry, I read fiction. I think the most interesting people in the world or at least the most entertaining at dinner parties are all avoid readers of fiction and history. So I recently reread, for instance, all of my favorite short stories from college, from Dostoyevsky’s “A Gentle Creature” to “Drown” Junot Diaz. “Passing” by Nella Larsen, “The Diamond as Big as the Ritz” by Fitzgerald. Those are some of my very favorite stories of all time. And my retirement dream is to write a book of short stories. RITHOLTZ: Really, really quite intriguing. Are they all available in a single collection or these just, going back to your favorites and just plowing through them for fun? DARABI: Those are just going back to my favorites. I try to re-read “Passing” every few years which is somehow seems to be more and more relevant as I get older and Junot Diaz has become so incredibly famous when I first read “Drown” about 20 years ago which is an original collection of short stories that broadened my perspective of why it’s important to think about a broader definition of America, I guess. And, yes, no, that’s just — that was just sort of off the top of my head as the offering of a few stories that I really love, no collection. RITHOLTZ: That’s a good collection. And we’re down to our final two questions. What sort of advice would you give to a recent college grad who was interested in a career in either venture capital or entrepreneurship? DARABI: Venture capital or entrepreneurship. Well, I would say, learn as early as possible how to trust your gut. So, this could mean a myriad of things. As an entrepreneur, it could mean under the halo effect of an institution, university or high school or maybe having a comfortable day job, tinker with ideas, get feedback on that idea, don’t be afraid of looking or sounding dumb and build that peer network that I described. People who are rooting you on and are also insatiably curious about wonky things. And I would say that for venture capital, similar play on the same theme, but whether it’s putting small amounts of money into new concept, blockchain investing, or whether it’s meeting with entrepreneurs and saying maybe I only have $3,000 save up but I believe in you enough to bet amongst friends in Brooklyn on your concept if you’ll have me as an investor. So, play with your own money because what it’s really teaching you in return is how to follow instincts and to base pattern recognition off your own judgement. And if you do that early on, overtime, these all become datapoints that you can point to and these are lessons that you can glean while not taking the risk of portfolio management. So, I guess the real advice to your listeners is more action, please. RITHOLTZ: Really very, very intriguing. And our final question, what do you know about the world of venture investing today that you wish you knew 15 or 20 years ago when you first getting started? DARABI: Twenty years ago, I was a bit of a Pollyanna and I thought every wonderful idea that simply is built by smart people and has timed the market correctly will work out. And I will say that I’m slightly more jaded today because of the capital structure that is systematically allowing the biggest firms in the world to kind of eat up a generous portion of, let’s call it the LP pie, which leaves less capital available to the young upstart VC firms, and of course I’m biased because I run one, that are taking outsized risks on those non-obvious ideas that we referenced. And so, what I wish for the future is that institutional capital kind of reprioritizes what it’s looking for. And in addition to having a bottom line of reliable and demonstrable return on any given investment, there are new standards put into play saying we want to make sure that a portion of our portfolio goes to diverse managers. Because in turn, we recognize that they are three times more likely to invest in diverse founders or we believe in impact investing can be broader than the ESG definitely of a decade ago, so we’re coming up with our own way to measure on sustainability or what impact means to us. And if they go through those exercises which I know is hard because, certainly, I’m not trying to add work to anyone’s plate, I do think that the results will more than make up for it. RITHOLTZ: Quite intriguing. Thank you, Soraya, for being so generous with your time. We have been speaking with Soraya Darabi who is the Co-Founder and General Partner at TMV Investments. If you enjoy this conversation, well, be sure and check out any of the prior 376 conversations we’ve had before. You can find those at iTunes or Spotify, wherever you buy your favorite podcast. We love your comments, feedback, and suggestions. Write to us at MIB podcast@bloomberg.net. You can sign up for my daily reads at ritholtz.com. Check out my weekly column at bloomberg.com/opinion. Follow me on Twitter @ritholtz. I would be remiss if I did not thank the crack team that helps me put these conversations together each week. Tim Harrow is my audio engineer. Paris Walt (ph) is my producer. Atika Valbrun is our project manager, Michael Batnick is my head of research. I’m Barry Ritholtz, you’ve been listening to Masters in Business on Bloomberg Radio.   ~~~     The post Transcript: Soraya Darabi appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureOct 20th, 2021

Equity Bancshares, Inc. Results Include Strong Organic Growth While Expanding Kansas Franchise

WICHITA, Kan., Oct. 19, 2021 (GLOBE NEWSWIRE) -- Equity Bancshares, Inc. (NASDAQ:EQBK), ("Equity", "the Company", "we", "us", "our"), the Wichita-based holding company of Equity Bank, reported net income of $11.8 million and $0.80 earnings per diluted share for the quarter ended September 30, 2021. Equity's results occurred as the Company completed its acquisition of American State Bancshares, Inc. on October 1, 2021. "As the founder of Equity Bank, our results this quarter are particularly satisfying, as we celebrate continued loan growth, excellent earnings and our first cash stock dividend while simultaneously closing the largest acquisition in our history. I am grateful to our loyal employees and stockholders as we continue to grow and improve Equity Bank," said Brad S. Elliott, Chairman and CEO of Equity. "I'm pleased with the growth of the Equity Bank brand and the hard work and collaboration of our team members throughout our regions, including our bank employees, lenders, and operations professionals who placed the customer first and executed with open doors, expertise, and availability," said Mr. Elliott. "We've successfully integrated American State Bank & Trust Company into our platform while continuing to provide momentum, support and expertise to our customers throughout our franchise." Equity customers successfully had $175.7 million of Paycheck Protection Program ("PPP") loans forgiven during the quarter, resulting in the recognition of fee income totaling $7.7 million in the three-month period ended September 30, 2021. At September 30, 2021, the total unrecognized fee income associated with PPP loans was $3.0 million. "Our entrepreneurial culture drives the efficiency of our merger process, assists in building a solid community banking network that is responsive to a diverse customer base and excels at adding core deposits and new households in a changing environment. Our mission as a community bank is to continue to prioritize local customers, local service, and bankers willing to go above and beyond. As we continue to grow, expand and deliver, our focus will drive value for our shareholders," said Mr. Elliott. Notable Items: Diluted earnings per share of $0.80, adjusted to reflect core operating results, was $0.96 per diluted share. The adjustments to earnings were comprised of the exclusion of merger expenses of $4.0 million, non-accrual interest income of $1.4 million, bank-owned life insurance death benefit of $486 thousand and additional reserving for repurchase obligations associated with the Company's Federal Deposit Insurance Corporation ("FDIC") assisted transaction of $771 thousand. Linked quarter service fee revenue, including deposit services, mortgage banking, trust and wealth and insurance services increased to $6.7 million from $6.4 million, or 3.7%. The Company authorized a second stock repurchase program in the third quarter of 2020 totaling 800,000 shares. During the quarter ended September 30, 2021, the Company repurchased 57,239 shares at a weighted average cost of $30.64 per share, totaling $1.8 million. At the end of the quarter, capacity of 123,448 shares remained under the current repurchase program. The Board authorized the repurchase of up to an additional 1,000,000 shares of Equity's outstanding common stock, beginning October 29, 2021, and concluding October 28, 2022, subject to non-objection by the Company's primary regulators. The Company announced and paid its first common stock dividend of $0.08 per share to shareholders of record as of September 30, 2021. Equity's Balance Sheet Highlights: During the quarter total loans decreased from $2.82 billion to $2.69 billion, including a reduction in PPP assets of $175.7 million. Excluding the impact of PPP, organic growth linked quarter was $41.8 million, or 7.1% annualized. Total deposits of $3.66 billion at September 30, 2021, as compared to $3.69 billion at June 30, 2021. Checking, savings and money market accounts were $3.08 billion at September 30, 2021, relative to $3.03 billion at June 30, 2021. As compared to December 31, 2020, the Bank has increased non-interest-bearing deposits by $192.8 million, or 24.4%. As excess liquidity continues to impact the operating environment at quarter end, securities and interest-earning cash and cash equivalents comprise 31.4% of average earnings assets, up from 28.0% at the end of the linked quarter and 25.0% at the end of the comparable quarter in the previous year. Financial Results for the Quarter Ended September 30, 2021 Net income allocable to common stockholders was $11.8 million, or $0.80 per diluted share, for the three months ended September 30, 2021, as compared to $15.2 million, or $1.03 per diluted share, for the three months ended June 30, 2021, a decrease of $3.4 million. This third quarter decrease was attributable to an increase in non-interest expense of $4.9 million, an increase in provision for credit losses of $2.7 million and a decrease of $1.3 million in non-interest income, partially offset by an increase in net interest income $4.3 million and a decrease in provision for income taxes of $1.1 million. Net Interest Income Net interest income was $39.0 million for the three months ended September 30, 2021, as compared to $34.6 million for the three months ended June 30, 2021, an increase of $4.3 million, or 12.6%. The increase in net interest income was primarily driven by an increase in loan fees, due to the forgiveness of PPP assets, of $2.0 million for the quarter ended September 30, 2021, compared to the quarter ended June 30, 2021. The yield on interest-earning assets increased 32-basis points to 4.20% during the quarter ended September 30, 2021, as compared to 3.88% for the quarter ended June 30, 2021. The cost of interest-bearing deposits declined by 3-basis points to 0.28% for the three months ended September 30, 2021, from 0.31% in the previous quarter. Provision for Credit Losses During the three months ended September 30, 2021, there was a provision of $1.1 million in the allowance for credit losses recognized through the provision for credit losses as compared to a net release of $1.7 million of provision for credit losses for the three months ended June 30, 2021. The comparative increase was primarily driven by an increase in reserves on specifically assessed assets which was partially offset by improving trends in the Company's loss experience and moderating economic impacts. For the three months ended September 30, 2021, we had net charge-offs of $129 thousand as compared to $567 thousand for the three months ended June 30, 2021. Non-Interest Income Total non-interest income was $7.8 million for the three months ended September 30, 2021, as compared to $9.1 million for the three months ended June 30, 2021, or a decline of 14.0% quarter over quarter. Other non-interest income was $546 thousand, a decrease of $1.5 million, or 73.6%, from the quarter ended June 30, 2021. The decrease in other non-interest income was primarily due to the accounting for potential repurchase obligations associated with assets previously purchased through a FDIC assisted transaction. In the second quarter, the Company trued up the guarantee on a number of assets resulting in income recognition of $917 thousand. In the third quarter, two unrelated assets were identified to have experienced deterioration requiring the recognition of a reserve, resulting in $771 thousand in expense. The net change in these inputs account for the change in the line item. During the quarter, service fee revenue, including deposit services, mortgage banking, trust and wealth management, credit cards and insurance increased to $6.7 million from $6.4 million during the second quarter. The growth was driven by increasing transaction activity and insurance commissions and fees. Non-Interest Expense Total non-interest expense for the quarter ended September 30, 2021, was $30.7 million as compared to $25.8 million for the quarter ended June 30, 2021. The $4.9 million change is primarily attributed to increases of $3.6 million in merger expenses, $819 thousand in salaries and employee benefits, driven by a comparative reduction in the deferral of cost associated with loan originations, and $372 thousand loss on debt extinguishment, related to the repayment of fixed-rate term advances with Federal Home Loan Bank that were acquired through a prior merger. Asset Quality As of September 30, 2021, Equity's allowance for credit losses to total loans was 2.0%, as compared to 1.8% at June 30, 2021. Nonperforming assets were $74.3 million as of September 30, 2021, or 1.7% of total assets, compared to $66.7 million at June 30, 2021, or 1.6% of total assets. Total classified assets, including loans rated special mention or worse, other real estate owned and other repossessed assets were $112.4 million, or 24.3% of regulatory capital, up from $103.5 million, or 23.2% of regulatory capital as of June 30, 2021. During the quarter non-performing assets increased by $7.5 million due to the transition of one significant relationship to non-accrual. The Company provided $1.1 million to the allowance for credit losses, comprised of an increase in specific reserves, primarily driven by the migration of this asset to non-accrual, partially offset by improving historical loss performance and the continued moderation of economic conditions following the height of the pandemic. Regulatory Capital The Company's ratio of common equity tier 1 capital to risk-weighted assets was 12.4%, the total capital to risk-weighted assets was 16.6% and the total leverage ratio was 9.0% at September 30, 2021. At December 31, 2020, the Company's common equity tier 1 capital to risk-weighted assets ratio was 12.8%, the total capital to risk-weighted assets ratio was 17.4% and the total leverage ratio was 9.3%. The Company's subsidiary, Equity Bank, had a ratio of common equity tier 1 capital to risk-weighted assets of 14.5%, a ratio of total capital to risk-weighted assets of 15.8% and a total leverage ratio of 10.1% at September 30, 2021. At December 31, 2020, Equity Bank's ratio of common equity tier 1 capital to risk-weighted assets was 14.5%, the ratio of total capital to risk-weighted assets was 15.7% and the total leverage ratio was 10.1%. Non-GAAP Financial Measures In addition to evaluating the Company's results of operations in accordance with accounting principles generally accepted in the United States of America ("GAAP"), management periodically supplements this evaluation with an analysis of certain non-GAAP financial measures that are intended to provide the reader with additional perspectives on operating results, financial condition and performance trends, while facilitating comparisons with the performance of other financial institutions. Non-GAAP financial measures are not a substitute for GAAP measures, rather, they should be read and used in conjunction with the Company's GAAP financial information. The efficiency ratio is used as a common measure by banks as a comparable metric to understand the Company's expense structure relative to its total revenue; in other words, for every dollar of total revenue recognized, how much of that dollar is expended. To improve the comparability of the ratio to our peers, non-core items are excluded. To improve transparency and acknowledging that banks are not consistent in their definition of the efficiency ratio, we include our calculation of this non-GAAP measure. Return on average assets before income tax provision, provision for loan losses and goodwill impairment is a measure that the Company uses to understand fundamental operating performance before these expenses. Used as a ratio relative to average assets, we believe it demonstrates the "core" performance and can be viewed as an alternative measure of how efficiently the Company services its asset base. Used as a ratio relative to average equity, it can function as an alternative measure of the Company's earnings performance in relationship to its equity. Tangible common equity and related measures are non-GAAP financial measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These financial measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Return on average tangible common equity is used by management and readers of our financial statements to understand how efficiently the Company is deploying its common equity. Companies that are able to demonstrate more efficient use of common equity are more likely to be viewed favorably by current and prospective investors. The Company believes that disclosing these non-GAAP financial measures is both useful internally and is expected by our investors and analysts in order to understand the overall performance of the Company. Other companies may calculate and define their non-GAAP financial measures and supplemental data differently. A reconciliation of GAAP financial measures to non-GAAP measures and other performance ratios, as adjusted, are included in Table 8 in the following press release tables. Conference Call and Webcast Equity Chairman and Chief Executive Officer, Brad Elliott, and Executive Vice President and Chief Financial Officer, Eric Newell, will hold a conference call and webcast to discuss the 2021 third quarter results on Wednesday, October 20, 2021, at 10:00 a.m. eastern time, 9:00 a.m. central time. Investors, news media and other participants should register for the call or audio webcast at investor.equitybank.com. On Wednesday, October 20, 2021, participants may also dial into the call toll-free at (844) 534-7311 from anywhere in the U.S. or (574) 990-1419 internationally, using conference ID no. 7698604. Participants are encouraged to dial into the call or access the webcast approximately 10 minutes prior to the start time. Presentation slides to pair with the call or webcast will be posted one hour prior to the call at investor.equitybank.com. A replay of the call and webcast will be available two hours following the close of the call until October 27, 2021, accessible at (855) 859-2056 with conference ID no. 7698604 at investor.equitybank.com. About Equity Bancshares, Inc. Equity Bancshares, Inc. is the holding company for Equity Bank, offering a full range of financial solutions, including commercial loans, consumer banking, mortgage loans, trust and wealth management services and treasury management services, while delivering the high-quality, relationship-based customer service of a community bank. Equity's common stock is traded on the NASDAQ Global Select Market under the symbol "EQBK." Learn more at www.equitybank.com. Special Note Concerning Forward-Looking Statements This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect the current views of Equity's management with respect to, among other things, future events and Equity's financial performance. These statements are often, but not always, made through the use of words or phrases such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "project," "forecast," "goal," "target," "would" and "outlook," or the negative variations of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about Equity's industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond Equity's control. Accordingly, Equity cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although Equity believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from Equity's expectations include COVID-19 related impacts; competition from other financial institutions and bank holding companies; the effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board; changes in the demand for loans; fluctuations in value of collateral and loan reserves; inflation, interest rate, market and monetary fluctuations; changes in consumer spending, borrowing and savings habits; and acquisitions and integration of acquired businesses; and similar variables. The foregoing list of factors is not exhaustive. For discussion of these and other risks that may cause actual results to differ from expectations, please refer to "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in Equity's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 9, 2021, and any updates to those risk factors set forth in Equity's subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Equity's underlying assumptions prove to be incorrect, actual results may differ materially from what Equity anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Equity does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, such as COVID-19, and it is not possible for us to predict those events or how they may affect us. In addition, Equity cannot assess the impact of each factor on Equity's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Equity or persons acting on Equity's behalf may issue. Investor Contact: Chris NavratilSVP, FinanceEquity Bancshares, Inc.(316) 612-6014cnavratil@equitybank.com         Media Contact: John J. HanleySVP, Senior Director of MarketingEquity Bancshares, Inc.(913) 583-8004jhanley@equitybank.com Unaudited Financial Tables Table 1. Consolidated Statements of Income Table 2. Quarterly Consolidated Statements of Income Table 3. Consolidated Balance Sheets Table 4. Selected Financial Highlights Table 5. Year-To-Date Net Interest Income Analysis Table 6. Quarter-To-Date Net Interest Income Analysis Table 7. Quarter-Over-Quarter Net Interest Income Analysis Table 8. Non-GAAP Financial Measures TABLE 1. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)(Dollars in thousands, except per share data)     Three months endedSeptember 30,     Nine months endedSeptember 30,       2021     2020     2021     2020   Interest and dividend income                                 Loans, including fees   $ 37,581     $ 32,278     $ 102,392     $ 99,281   Securities, taxable     3,920       3,476       11,242       12,113   Securities, nontaxable     655       923       2,096       2,769   Federal funds sold and other     290       405       846       1,409   Total interest and dividend income     42,446       37,082       116,576       115,572   Interest expense                                 Deposits     1,881       3,064       6,316       13,827   Federal funds purchased and retail repurchase agreements     24       25       72       80   Federal Home Loan Bank advances     10       471       155       2,198   Federal Reserve Bank discount window     —       —       —       6   Bank stock loan     —       —       —       415   Subordinated debt     1,556       1,415       4,669       1,953   Total interest expense     3,471       4,975       11,212       18,479                                     Net interest income     38,975       32,107       105,364       97,093   Provision (reversal) for credit losses     1,058       815       (6,355 )     23,255   Net interest income after provision (reversal) for credit losses     37,917       31,292       111,719       73,838   Non-interest income                                 Service charges and fees     2,360       1,706       6,125       5,097   Debit card income     2,574       2,491       7,603       6,735   Mortgage banking     801       877       2,584       2,298   Increase in value of bank-owned life insurance     1,169       489       2,446       1,452   Net gain on acquisition     —       —       585       —   Net gains (losses) from securities transactions     381     —       398       12   Other     546       922       3,902       1,929   Total non-interest income     7,831       6,485       23,643       17,523   Non-interest expense                                 Salaries and employee benefits     13,588       13,877       39,079       40,076   Net occupancy and equipment     2,475       2,224       7,170       6,578   Data processing     3,257       2,817       9,394       8,243   Professional fees     1,076       877       3,148       3,187   Advertising and business development     760       598       2,241       1,697   Telecommunications     439       486       1,531       1,363   FDIC insurance     465       360       1,305       1,291   Courier and postage     344       366       1,040       1,103   Free nationwide ATM cost     519       439       1,504       1,186   Amortization of core deposit intangibles     1,030       1,030       3,094       2,806   Loan expense     207       107       626       628   Other real estate owned     (342 )     133       (805 )     710   Loss on debt extinguishment     372       —       372       —   Merger expenses     4,015       —       4,627       —   Goodwill impairment     —       104,831       —       104,831   Other     2,484       2,690       7,050       6,831   Total non-interest expense     30,689       130,835       81,376       180,530   Income (loss) before income tax     15,059       (93,058 )     53,986       (89,169 ) Provision for income taxes     3,286       (2,653 )     11,972       (1,711 ) Net income (loss) and net income (loss) allocable to common stockholders   $ 11,773     $ (90,405 )   $ 42,014     $ (87,458 ) Basic earnings (loss) per share   $ 0.82     $ (6.01 )   $ 2.92     $ (5.75 ) Diluted earnings (loss) per share   $ 0.80     $ (6.01 )   $ 2.86     $ (5.75 ) Weighted average common shares     14,384,302       15,040,407       14,397,146       15,211,901   Weighted average diluted common shares     14,669,312       15,040,407       14,688,092       15,211,901   TABLE 2. QUARTERLY CONSOLIDATED STATEMENTS OF INCOME (Unaudited)(Dollars in thousands, except per share data)     As of and for the three months ended       September 30,2021     June 30,2021     March 31,2021     December 31,2020     September 30,2020   Interest and dividend income                                         Loans, including fees   $ 37,581     $ 33,810     $ 31,001     $ 35,383     $ 32,278   Securities, taxable     3,920       3,523       3,799       3,408       3,476   Securities, nontaxable     655       717       724       913       923   Federal funds sold and other     290       268       288       285       405   Total interest and dividend income     42,446       38,318       35,812       39,989       37,082   Interest expense                                         Deposits     1,881       2,025       2,410       2,755       3,064   Federal funds purchased and retail repurchase agreements     24       26       22       25       25   Federal Home Loan Bank advances     10       80       65       94       471   Subordinated debt     1,556       1,557       1,556       1,556       1,415   Total interest expense     3,471       3,688       4,053       4,430       4,975                                             Net interest income     38,975       34,630       31,759       35,559       32,107   Provision (reversal) for credit losses     1,058       (1,657 )     (5,756 )     1,000       815   Net interest income after provision (reversal) for credit losses     37,917       36,287       37,515       34,559       31,292   Non-interest income                                         Service charges and fees     2,360       2,169       1,596       1,759       1,706   Debit card income     2,574       2,679       2,350       2,401       2,491   Mortgage banking     801       848       935       855       877   Increase in value of bank-owned life insurance     1,169       676       601       489       489   Net gain on acquisition     —       663       (78 )     2,145       —   Net gains (losses) from securities transactions     381       —       17       (1 )     —   Other     546       2,065       1,291       852       922   Total non-interest income     7,831       9,100       6,712       8,500       6,485   Non-interest expense                                         Salaries and employee benefits     13,588       12,769       12,722       14,053       13,877   Net occupancy and equipment     2,475       2,327       2,368       2,206       2,224   Data processing     3,257       3,474       2,663       2,748       2,817   Professional fees     1,076       999       1,073       1,095       877   Advertising and business development     760       799       682       801       598   Telecommunications     439       512       580       510       486   FDIC insurance     465       425       415       797       360   Courier and postage     344       327       369       338       366   Free nationwide ATM cost     519       513       472       423       439   Amortization of core deposit intangibles     1,030       1,030       1,034       1,044       1,030   Loan expense     207       181       238       161       107   Other real estate owned     (342 )     (468 )     5       1,600       133   Loss on debt extinguishment     372       —       —       —       —   Merger expenses     4,015       460       152       299       —   Goodwill impairment     —       —       —       —       104,831   Other     2,484       2,458       2,108       2,385       2,690   Total non-interest expense     30,689       25,806       24,881       28,460       130,835   Income (loss) before income tax     15,059       19,581       19,346       14,599       (93,058 ) Provision for income taxes (benefit)     3,286       4,415       4,271       2,111       (2,653 ) Net income (loss) and net income (loss) allocable to common stockholders   $ 11,773     $ 15,166     $ 15,075     $ 12,488     $ (90,405 ) Basic earnings (loss) per share   $ 0.82     $ 1.06     $ 1.04     $ 0.85     $ (6.01 ) Diluted earnings (loss) per share   $ 0.80     $ 1.03     $ 1.02     $ 0.84     $ (6.01 ) Weighted average common shares     14,384,302       14,356,958       14,464,291       14,760,810       15,040,407   Weighted average diluted common shares     14,669,312       14,674,838       14,734,083       14,934,058       15,040,407   TABLE 3. CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands)     September 30,2021     June 30,2021     March 31,2021     December 31,2020     September 30,2020   ASSETS                                         Cash and due from banks   $ 141,645     $ 138,869     $ 136,190     $ 280,150     $ 65,534   Federal funds sold     673       452       498       548       305   Cash and cash equivalents     142,318       139,321       136,688       280,698       65,839   Interest-bearing time deposits in other banks     —       —       249       249       499   Available-for-sale securities     1,157,423       1,041,613       998,100       871,827       798,576   Loans held for sale     4,108       6,183       8,609       12,394       9,053   Loans, net of allowance for credit losses(1)     2,633,148       2,763,227       2,740,215       2,557,987       2,691,626   Other real estate owned, net     10,267       10,861       10,559       11,733       8,727   Premises and equipment, net     90,727       90,876       90,322       89,412       86,087   Bank-owned life insurance     103,431       103,321       102,645       77,044       76,555   Federal Reserve Bank and Federal Home Loan Bank stock     14,540       18,454       15,174       16,415       32,545   Interest receivable     15,519       15,064       16,655       15,831       18,110   Goodwill     31,601       31,601       31,601       31,601       31,601   Core deposit intangibles, net     12,963       13,993       15,023       16,057       17,101   Other     47,223       33,702      .....»»

Category: earningsSource: benzingaOct 20th, 2021

These are the ten top stock holdings of Israel Englander

Israel Englander is one of the top hedge fund managers. He founded Millennium Management in 1989 with just $35 million, and now, the hedge fund firm manages over $50 billion, according to Forbes. Englander’s hedge fund uses a multi-manager platform, meaning it invests more money in those that perform well and gets rid of traders […] Israel Englander is one of the top hedge fund managers. He founded Millennium Management in 1989 with just $35 million, and now, the hedge fund firm manages over $50 billion, according to Forbes. Englander’s hedge fund uses a multi-manager platform, meaning it invests more money in those that perform well and gets rid of traders whose performance doesn’t meet his expectations. He has an undergraduate degree from NYU. Later, he started working on his MBA but left early to trade on AMEX. Let’s take a look at the top stock holdings of Israel Englander. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Top Stock Holdings Of Israel Englander We have referred to Millennium Management's latest 13F filing to come up with the top stock holdings of Israel Englander. For our list, we have only considered Millennium Management's stock holdings. Here are the top stock holdings of Israel Englander: UnitedHealth Group Founded in 1977, this company offers healthcare coverage, software and data consultancy services. Englander owns 844,710 shares of UnitedHealth Group Inc (NYSE:UNH), having a market value of more than $338 million and accounting for 0.21% of his portfolio. Englander first acquired UnitedHealth shares in Q3 2014 and has recently increased his stake in the company. UnitedHealth shares are up over 21% YTD and more than 1% in the last three months. Salesforce Founded in 1999, salesforce.com, inc. (NYSE:CRM) designs and develops cloud-based enterprise software for CRM (customer relationship management). Englander owns almost 1.4 million shares of Salesforce, having a market value of more than $338 million and accounting for 0.21% of his portfolio. Englander first acquired Salesforce shares in Q3 2008 and has recently increased his stake in the company. Salesforce shares are up over 30% YTD and more than 21% in the last three months. Walmart Founded in 1945, this company sells an assortment of merchandise at everyday low prices. Englander owns more than 2.6 million shares of Walmart Inc (NYSE:WMT), having a market value of more than $375 million and accounting for 0.23% of his portfolio. Englander first acquired Walmart shares in Q4 2006 and has recently increased his stake in the company. Walmart shares are down by over 2% YTD and almost 1% in the last three months. Honeywell International Founded in 1906, Honeywell International Inc (NASDAQ:HON) is an industrial software company that provides industry-specific solutions to automotive and aerospace companies. Englander owns almost 1.8 million shares of Honeywell International, having a market value of more than $388 million and accounting for 0.24% of his portfolio. Englander first acquired Honeywell International shares in Q4 2006 and has recently boosted his stake in the company. Honeywell International shares are up by over 3% YTD but are down more than 4% in the last three months. IHS Markit Founded in 1959, IHS Markit Ltd (NYSE:INFO) offers data, analytics and solutions to those in the business, finance and government sectors. Englander owns more than 4.5 million shares of IHS Markit, having a market value of more than $508 million and accounting for 0.31% of his portfolio. Englander first acquired IHS Markit shares in Q4 2016 and has recently increased his stake in the company. IHS Markit shares are up by over 37% YTD and more than 8% in the last three months. Facebook Founded in 2004, Facebook, Inc. (NASDAQ:FB) is mainly a social networking company that offers apps enabling people to connect with others. Englander owns more than 1.6 million shares of Facebook, having a market value of more than $571 million and accounting for 0.35% of his portfolio. Englander first acquired Facebook shares in Q2 2012 and has recently slashed his stake in the company. Facebook shares are up by over 18% YTD but are down more than 5% in the last three months. Alibaba Group Holding Founded in 1999, this company offers online and mobile marketplaces in retail and wholesale trade. Englander owns almost 3.4 million shares of Alibaba Group Holding Ltd (NYSE:BABA), having a market value of more than $766 million and accounting for 0.47% of his portfolio. Englander first acquired Alibaba shares in Q3 2014 and has recently reduced his stake in the company. Alibaba shares are down by over 27% YTD and more than 20% in the last three months. Linde Incorporated in 2017, this company deals in the production and distribution of industrial gases. Englander owns almost 2.7 million shares of Linde PLC (NYSE:LIN), having a market value of more than $770 million and accounting for 0.47% of his portfolio. Englander first acquired Linde shares in Q4 2015 and has recently increased his stake in the company. Linde shares are up by over 16% YTD and more than 6% in the last three months. Apple Founded in 1994, Apple Inc (NASDAQ:AAPL) designs, makes and sells smartphones, wearables, computers and other accessories. Englander owns almost 7 million shares of Apple, having a market value of more than $955 million and accounting for 0.59% of his portfolio. Englander first acquired Apple shares in Q4 2006 and has recently cut his stake in the company. Apple shares are up by over 8% YTD but are down more than 1% in the last three months. Amazon.com Founded in 1994, this company deals in e-commerce, artificial intelligence, digital streaming and cloud computing. Englander owns 338,263 shares of Amazon.com, Inc. (NASDAQ:AMZN), having a market value of more than $1.163 billion and accounting for 0.71% of his portfolio. Englander first acquired Amazon shares in Q3 2012 and has recently trimmed his stake in the company. Amazon shares are up by over 1% YTD but are down more than 7% in the last three months. (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkOct 18th, 2021

First-Ever Proptech Franchise Opportunity Creates Ancillary Revenue Stream Through Predictive Behavior Platform

There are thousands of real estate data platforms available to practitioners that assist agents and brokers in simplifying workflows, improving transparency, and attracting and retaining new business. Until now, however, there has not been a consumer-facing platform that accomplishes all of the above, and more, while also providing a franchise opportunity that allows business owners […] The post First-Ever Proptech Franchise Opportunity Creates Ancillary Revenue Stream Through Predictive Behavior Platform appeared first on RISMedia. There are thousands of real estate data platforms available to practitioners that assist agents and brokers in simplifying workflows, improving transparency, and attracting and retaining new business. Until now, however, there has not been a consumer-facing platform that accomplishes all of the above, and more, while also providing a franchise opportunity that allows business owners to reap the financial rewards of the consumers and agents leveraging the platform. “If someone would have said ‘I’m going to give you the exclusive rights to Dotloop or ShowingTime or Skyslope, and every agent in this area that uses any of those platforms is going to pay you a percentage every single month, that’s basically what we’re offering to the industry,” says MooveGuru CEO and Founder Scott Oakley of the company’s newly launched platform, YourHomeHub—the first proptech franchise available in real estate, according to the company. “Never has a broker or mortgage entity ever been able to be involved on an ownership level and we decided to change that,” says Oakley. “Scott Oakley and his MooveGuru team’s proptech franchise is an innovative offering that has identified and created a system providing real estate organizations opportunities to generate new long-term revenue streams from ancillary services, helping to augment their existing business model,” says RISMedia Founder, President and CEO John Featherston. “This is another example of innovation coming from within our own industry’s ranks!” With YourHomeHub, the first portal that allows homeowners to manage both the financial details and physical elements of their home, consumers can monitor extensive information about their home and local market conditions, store important documents, generate accurate estimates for home repairs and find a local contractor for over 1,000 different home service categories. What’s more, this powerful homeowner resource can be provided by a real estate professional or loan officer, as a gift to their customers at no cost to them. As part of the package, real estate professionals also receive exclusive marketing opportunities to their spheres of influence, preventing competitors from engaging with their most-coveted contacts from the dashboard. “Our brokerage firm has been using MooveGuru since it launched,” says Greg Martin, president and managing broker of Atlanta-based ERA Sunrise Realty, who is currently leveraging the YourHomeHub franchise model. “The value it has provided to our agent’s client relationships has been substantial, just one more reason that our firm has achieved the highest level of customer satisfaction three years in a row among any ERA real estate brokerage,” he says. “We see the additional product features and value-added services of YourHomeHub as expanding the client experience even further.” A Consumer-Facing Product The new platform provides consumers with several data points and resources they can leverage in their home-buying and selling process, including: Home Values: Home values with up-to-date market comparisons alongside homeowners’ mortgage Repairs: No obligation renovation calculators for the most common home updates and repairs Savings: Savings on common home-related expenses from local and national service providers Moving: White glove service helps with utility connections plus savings on movers and truck rentals Generating Leads Automatically Via a Predictive-Behavior Platform While consumers see the value in the platform’s transparent data, which helps inform their home-buying and selling decisions, the other side of the value proposition lands on real estate agents who now have access to a lead generation platform that leverages predictive modeling to identify buying and selling “triggers” that merit immediate follow-up so the agent can convert more business. The average agent has 397 sphere-of-influence contacts in their system, according to the 68 back-end systems MooveGuru pulls from, including Keller Williams’ Command, Realogy’s Dash and MoxiWorks. But agents are losing significant business by not  identifying which of these contacts actually plans to buy or sell real estate in the short-term. “We are able to upload all of those sphere-of-influence contacts and give them access to YourHomeHub,” says Oakley, adding that YourHomeHub then informs agents when their contacts click on one of 28 different buying and selling triggers within the hub. These can be anything from clicking on a blog about real estate to searching for the day’s average mortgage interest rates. “You’re really only going to click on ‘What are today’s mortgage rates?’ if one, you’re interested in refinancing your home or two, buying or selling. So that’s a selling sign,” says Oakley. “The challenge agents have is that they have 397 contacts but the average agent only does seven transactions. But statistically, 37 of [those contacts] are going to buy or sell a home this year.” Once the platform identifies these opportunities, YourHomeHub immediately contacts the agent to let them know someone in their sphere of influence has clicked on a buying or selling trigger. From there, the agent can take action. “Real estate agents generally do a poor job maintaining contact with their past clients. They get busy focusing on servicing current buyers and sellers so it’s understandable. YourHomeHub keeps our agents ‘front and center’ so that our clients won’t easily forget who provided them with great real estate service,” says Martin. “The added bonus is that if the client performs any one of several built-in buying or selling triggers, such as watching the blog on preparing your house to sell, our agent is immediately notified that their client is considering a move,” adds Martin. “Currently, there is no good automated way to know what a past client is planning and this should increase our ability to continue our great relationship with them, which will benefit our agents with additional business from people who already like them.” While MooveGuru does offer a free version of the product, it only identifies that a consumer has clicked on a trigger but does not clarify who did so and which trigger was selected. YourHomeHub’s paid service offers robust, actionable data. Increasing Cash Flow by Adopting Technology That Works for You “The average real estate brokerage makes like $150 per real estate transaction,” Oakley quips. “[They] can’t afford to not have ancillary revenue.” The YourHomeHub franchise opportunity provides more than lead generation and consumer engagement. It’s a chance for brokers, lenders, title officers, MLSs and more to leverage technology that’s going to increase their wealth two-fold, through an ancillary revenue stream and the additional earnings garnered via increased closed transactions. “We flipped the franchise model on its head,” says Oakley. “MooveGuru will be the revenue collector, accounting, customer support, product development, technology, corporate trainer—we will be everything. All the franchise has to do is market and sell this to agents. And then we actually pay the franchisee.” According to Oakley, the money from agents choosing to leverage the platform is collected via credit card by MooveGuru, which then pays the franchisee every month. Oakley says the platform is garnering a lot of interest from its broker and lender relationships. “Three of our first franchisees all own multiple businesses in the real estate space and are looking for another ancillary revenue stream. YourHomeHub offers this for brokerages and as a non-dues revenue source for MLSs. The potential is enormous.” “We’ve already had 14 franchises purchased,” says Oakley of the product’s immediate success. While MooveGuru and HomeKeepr are nationwide, YourHomeHub is available to MooveGuru partners, approved for franchising in 37 states right now. “We expect the remaining dozen or so within the next three months,” he adds. “Commissions are being squeezed and are under tremendous competitive and potentially even legislative pressure. Brokers are scrambling to find additional revenue streams including ancillary services,” says Martin. “For us, monetizing the YourHomeHub franchise revenues is one way to bring in more income to complement our title business and mortgage MSA so that we can continue to pay our agents aggressive commission splits, yet maintain the high level of support and tools that we’ve always provided.” YourHomeHub will officially be launching in mid-November. To learn more about a YourHomeHub franchise and available territories, please email franchise@yourhomehub.com or visit yourhomehub.com. Liz Dominguez is RISMedia’s senior online editor. Email her your real estate news ideas to lizd@rismedia.com. The post First-Ever Proptech Franchise Opportunity Creates Ancillary Revenue Stream Through Predictive Behavior Platform appeared first on RISMedia......»»

Category: realestateSource: rismediaOct 14th, 2021

White River Bancshares Co. Earns $1.93 Million, or $1.99 Per Diluted Share, in Third Quarter 2021; Results Highlighted By Double Digit Loan and Deposit Growth Year-Over-Year; Book Value Increases to $81.47 Per Common Share

FAYETTEVILLE, Ark., Oct. 14, 2021 (GLOBE NEWSWIRE) -- White River Bancshares Company (OTCQX:WRIV), (the "Company") the holding company for Signature Bank of Arkansas (the "Bank"), today reported net income increased 67.4% to $1.93 million, or $1.99 per diluted share, in the third quarter of 2021, compared to $1.15 million, or $1.19 per diluted share, in the third quarter of 2020. In the prior quarter, the Company earned a record $2.08 million, or $2.14 per diluted share. In the first nine months of 2021, net income more than doubled to $5.56 million, or $5.73 per diluted share, compared to $2.56 million, or $2.64 per diluted share, in the first nine months of 2020. All financial results are unaudited. "We achieved the highest third quarter earnings in the company's history, fueled by strong revenue generation, double digit loan and deposit growth year-over-year and an expanding net interest margin," said Gary Head, President and Chief Executive Officer. "Northwest Arkansas is one of the fastest growing markets in the United States, and we are taking advantage of this growth by capturing market share and expanding our balance sheet while looking for new opportunities." "Another highlight of the quarter was the Board's decision to pay an annual cash dividend of $0.50 per share," Head continued. "The dividend is a testament to the strength of our core banking activities and financial performance of our franchise. We are pleased that our earnings growth provides us the opportunity to both begin this dividend program and support future growth at the Bank." "Deposit balances remained at record levels at the end of September, with new customer relationships contributing to strong quarterly deposit growth," said Scott Sandlin, Chief Strategy Officer. "Part of our success in gathering new low-cost deposits has been our enhanced marketing initiatives that emphasize full banking relationships. Our banking teams have done an excellent job of offering deposit products to compliment every lending relationship, as noninterest bearing deposits are up 56.4% year-over-year." "During both rounds of Federal funding, we were active with helping our customers receive PPP loans from the SBA," said Jeff Maland, Chief Risk Officer. "Over the course of the two rounds of PPP lending, we funded 433 PPP loans totaling $29.0 million to both existing and new customers. At quarter-end, only 90 PPP loans totaling $6.2 million remained on the books, as a majority of these loans were forgiven during the prior quarter. We have also done an excellent job of replacing PPP loans with new loan originations, with heavy demand for new home loans, and construction and land development loans." Third Quarter 2021 Financial Highlights: Third quarter net income increased 67.4% to $1.93 million, or $1.99 per diluted share, compared to $1.15 million, or $1.19 per diluted share, in the third quarter of 2020. Annualized return on average assets was 0.95%, compared to 0.61% in the third quarter a year ago. Annualized return on average equity was 9.80%, compared to 6.34% in the third quarter a year ago. There was no provision for loan losses in the third quarter or second quarter of 2021. This compares to a $300,000 provision in the third quarter of 2020. Net loans increased 12.5% to $661.7 million at September 30, 2021, compared to $588.4 million at September 30, 2020. Total deposits increased 16.9% to $739.7 million at September 30, 2021, compared to $632.5 million a year ago. Noninterest bearing deposits increased 56.4% to $263.5 million at September 30, 2021, compared to $168.5 million a year ago. Nonperforming assets totaled $149,000, or 0.02% of total assets at September 30, 2021, compared to $400,000, or 0.05% of total assets, at September 30, 2020. Book value per common share increased to $81.47 at September 30, 2021, from $75.17 a year ago. Total risk-based capital ratio was 12.84% and the Tier 1 leverage ratio was 10.89% for the Bank at September 30, 2021. Income Statement "The changes we have made in investments and funding mix has reduced our dependency on internet CD's and FHLB advances. We are now primarily funding loan growth with low-cost deposits, which helped our net interest margin expand 31 basis points during the quarter," said Brant Ward, Chief Operating Officer. The Company's NIM improved to 3.64% in the third quarter of 2021, compared to 3.33% in the third quarter of 2020, and expanded eight basis points compared to 3.56% in the prior quarter. In the first nine months of 2021, the net interest margin improved 13 basis points to 3.67%, compared to 3.54% in the first nine months of 2020. Third quarter net interest income increased 17.7% to $7.1 million, compared to $6.0 million in the third quarter of 2020. Total interest income increased 3.4% to $8.1 million in the third quarter of 2021, from $7.9 million in the third quarter of 2020. Total interest expense decreased by 42.7% to $1.1 million in the third quarter of 2021, from $1.9 million during the third quarter of 2020. In the first nine months of 2021, net interest income increased 13.5% to $20.9 million, compared to $18.4 million in the first nine months of 2020. Noninterest income increased 36.7% to $1.7 million in the third quarter of 2021, compared to $1.2 million in the third quarter a year ago. The Company benefitted from higher wealth management fee income, steady service charges and deposit fees and substantially higher secondary market fee income compared to the third quarter in the prior year. In the first nine months of the year, noninterest income increased 45.2% to $5.1 million, compared to $3.5 million in the first nine months of 2020. Noninterest expense increased to $6.2 million in the third quarter of 2021, compared to $5.4 million in the third quarter of 2020. Higher commissions due to increased revenues in our lines of business along with ancillary costs related to our core conversion and new branch contributed to the increase during the third quarter of 2021. Balance Sheet Total assets increased by 15.1% to $866.1 million at September 30, 2021, from $752.6 million at September 30, 2020, and increased 6.8% compared to $810.7 million at June 30, 2021. Cash and cash equivalents increased to $77.5 million at September 30, 2021 from $49.6 million a year ago. Investment securities increased to $84.7 million at September 30, 2021 from $70.4 million a year ago, as the Company actively moved cash balances into better yielding investment securities during the quarter. Loans, net of allowance for loan losses, increased 12.5% to $661.7 million at September 30, 2021, compared to $588.4 million a year ago, and increased 2.8% compared to $643.6 million three months earlier. Through the close of the first round of the PPP program on August 8, 2020, the Bank had funded approximately 274 PPP loans totaling $20.7 million to both existing and new customers. Through the close of the second round of the PPP program on May 31, 2021, the Bank had funded approximately 159 PPP loans totaling $8.3 million. As of September 30, 2021, no PPP loans from round one, and $6.2 million in PPP loans from round two, remained on the books. Deposit balances remained at record levels, with new customer relationships contributing to strong quarterly deposit growth. Total deposits increased 16.9% to $739.7 million at September 30, 2021, compared to $632.5 million a year ago and increased 7.8% compared to $685.9 million at June 30, 2021, with noninterest bearing deposits increasing 56.4% to $263.5 million at September 30, 2021, compared to $168.5 million a year ago. FHLB advances totaled $16.1 million at September 30, 2021 from $17.2 million at September 30, 2020. Total stockholders' equity increased 8.3% to $78.9 million at September 30, 2021, from $72.8 million at September 30, 2020 and increased 1.9% when compared to $77.4 million at June 30, 2021. Book value per common share increased to $81.47 at September 30, 2021 from $75.17 at September 30, 2020, and $79.91 at June 30, 2021. Credit Quality "We continue to be encouraged by the overall asset quality of our loan portfolio, including minimal nonperforming assets as of quarter end," said Maland. "Additionally, we no longer have any loans on deferral at September 30, 2021 from the payment forbearance agreements we had made with some customers experiencing financial hardship at the early onset of the pandemic."   Due to excellent credit quality and a strong allowance for loan losses, the Company reported no provision for loan losses in both the third quarter of 2021 and the second quarter of 2021. This compares to a $300,000 provision for loan losses during the third quarter of 2020.   Nonperforming loans totaled $149,000 at September 30, 2021. This compared to no nonperforming loans at June 30, 2021, and $200,000 in nonperforming loans at September 30, 2020. Nonperforming assets were $149,000 at September 30, 2021, compared to no nonperforming assets at June 30, 2021, and $400,000 in nonperforming assets at September 30, 2020. Total nonperforming assets were 0.02% of total assets at September 30, 2021, 0.00% at June 30, 2021, and 0.05% at September 30, 2020. The allowance for loan losses was $8.6 million, or 1.28% of total loans, at September 30, 2021, when excluding the $6.2 million of PPP loans, which are 100% guaranteed by the SBA. This compared to $8.4 million, or 1.39% of total loans, at September 30, 2020. Net loan charge-offs were $81,000 in the third quarter of 2021, compared to net loan recoveries of $3,000 in the second quarter of 2021, and net loan charge-offs of $169,000 in the third quarter of 2020. Capital The Bank's capital ratios continued to exceed regulatory "well-capitalized" requirements, with a Tier 1 leverage ratio estimate of 10.89%, Common equity Tier 1 capital ratio of 11.69%, Tier 1 risk-based capital ratio of 11.69% and Total capital ratio of 12.84%, at September 30, 2021. About White River Bancshares Company White River Bancshares Company is the single bank holding company for Signature Bank of Arkansas. Both are headquartered in Fayetteville, Arkansas. The Bank has locations in Fayetteville, Springdale, Bentonville, Rogers and Brinkley, Arkansas. Founded in 2005, Signature Bank of Arkansas provides a full line of financial services to small businesses, families and farms. White River Bancshares Company (OTCQX: WRIV), trades on the OTCQX® Best Market.   About the Region White River Bancshares Company is located in thriving Northwest Arkansas in the Fayetteville-Springdale-Rogers MSA. The region is home to the corporate headquarters for Walmart Stores Inc, Sam's Club, Tyson Foods, Simmons Foods, and J.B. Hunt Transport. Hundreds of other market-leading companies including Procter & Gamble, Johnson & Johnson, Coca-Cola and Rubbermaid maintain offices in the region in order to maintain their relationships with the locally-based Fortune 500 companies. Northwest Arkansas is also home to the state's flagship public educational institution, The University of Arkansas and its Sam M. Walton College of Business. The region has seen significant growth in its medical and arts infrastructures with the continued expansion of Washington Regional Medical System, Northwest Medical System, Mercy Health System of Northwest Arkansas and Arkansas Children's Hospital Northwest. Crystal Bridges Museum of American Art and the Walton Arts Center have led the expansion of the arts. Northwest Arkansas has been repeatedly recognized in recent years as one of the best places to live in the country and remains one of the nation's fastest-growing regions. Forward Looking Statements This press release contains statements about future events. These forward-looking statements, which are based on certain assumptions of management of the Company and the Bank and describe our future plans, strategies and expectations, can generally be identified by use of forward-looking terminology such as "may," "will," "believe," "plan," "expect," "intend," "anticipate," "estimate," "project," or similar expressions or the negative of those terms. Our ability to predict results of future events and the actual effect of future plans or strategies are inherently uncertain and actual results may differ materially from those predicted in such forward-looking statements. Factors that could have a material adverse effect on our operations and future prospects or that could affect the outcome of such forward-looking statements include, but are not limited to, changes in interest rates; the economic health of the local real estate market; general economic conditions; credit deterioration in our loan portfolio that would cause us to increase our allowance for loan losses; legislative or regulatory changes; technological developments; monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality or composition of our loan and securities portfolios; demand for loan products in our market areas; deposit flows and costs of capital; competition; retention and recruitment of qualified personnel; demand for financial services in our market areas; and changes in accounting principles, policies, and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. The Company does not undertake and specifically declines any obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.                                               Contact: Scott Sandlin, Chief Strategy Officer   479-684-3754 WHITE RIVER BANCSHARES COMPANY   CONSOLIDATED BALANCE SHEETS   September 30, 2021, June 30, 2021 and September 30, 2020                     UNAUDITED   September 30, 2021     June 30, 2021   September 30, 2020                   ASSETS                     Cash and due from banks $ 77,451,337     $ 40,761,741     $ 49,636,364     Federal funds sold     68,441       140,154       -                       Total cash and cash equivalents   77,519,778       40,901,895       49,636,364                       Investment securities   84,719,875       87,703,034       70,375,655     Loans held for sale   7,300,173       4,754,632       10,689,131     Loans, net of allowance for loan losses   661,748,201       643,628,102       588,429,575     Premises and equipment, net   25,202,545       24,531,056       24,030,438     Foreclosed assets held for sale   100       100       200,100     Accrued interest receivable   2,336,515       2,171,138       2,581,457     Deferred income taxes   1,899,258       1,863,572       1,480,231     Other investments     2,899,285       2,896,985       2,888,585     Other assets       2,507,609       2,288,891       2,296,588                             $ 866,133,339     $ 810,739,405     $ 752,608,124                       LIABILITIES AND STOCKHOLDERS' EQUITY                     Deposits:                 Demand deposits - non-interest bearing $ 263,531,523     $ 211,286,665     $ 168,518,880       - interest bearing   254,579,040       250,458,669       179,409,301     Savings deposits     23,631,159       22,772,238       16,688,392     Time deposits - under $250M   104,817,483       109,170,757       151,198,785         - $250M and over   93,112,785       92,205,366       116,721,324                       Total deposits   739,671,990       685,893,695       632,536,682                       Federal Home Loan Bank advances   16,095,431       16,843,983       17,161,929     Notes payable       10,791,724       10,785,412       10,766,607     Accrued interest payable   352,228       227,688       689,096     Other liabilities     20,348,822      .....»»

Category: earningsSource: benzingaOct 14th, 2021

33 startup companies that are currently hiring remote workers

From meal delivery service Daily Harvest to video-sharing platform Cameo, more companies are offering positions with remote work flexibility. In amidst of The Great Resignation, 33 companies are rising as the top startups to work for remotely Jessie Casson/Getty Images More people are looking for jobs with flexibility to work from home amid the 'Great Resignation.' LinkedIn recently released its 2021 Top Startups list featuring businesses that are hiring remotely. From Daily Harvet to Cameo, here are 33 companies hiring with remote work availability. Looking for a new gig? You're not alone. 55% of us are planning to find a new job this year, according to a recent Bankrate survey, and the phenomenon even has a name: The Great Resignation. One big reason why many employees are looking to make a change is the need for flexibility - both in terms of hours and working location. Remote jobs typically offer both in spades, and who doesn't love being able to put on a load of laundry between conference calls? LinkedIn just released its 2021 Top Startups list, ranking companies that are providing the benefits and perks employees want most now."In addition to remote and hybrid models, many of the companies are supporting their workers with WFH stipends, increased mental health benefits, virtual trainings, and upskilling opportunities to help people succeed in this new normal," said LinkedIn Senior Editor at Large Jessi Hempel. The majority of the startups listed are embracing remote and hybrid roles. Of the 50 startups, 33 are actively hiring remote roles, and some companies have quite a few jobs available. One of them is Gemini, a next-generation cryptocurrency platform currently hiring more than 325 remote roles. "We see hiring remote employees as an opportunity not only to expand our talent pool but also to expand diversity of background in the crypto industry as a whole," said Gemini's Director of Talent Acquisition Jonathan Tamblyn. "By hiring for skills, knowledge, and potential first rather than geography, we are able to hire employees that represent the populations we want to empower through crypto - particularly women and minorities - who have traditionally been underrepresented in the industry."Another company is Gong, a revenue intelligence platform based in Palo Alto, California, that has more than 425 remote roles open now. "Hiring remotely has enabled our team composition to reflect the diversity of our customers and hire in communities where talented residents want more opportunities to shine professionally," said Sandi Kochhar, chief people officer at Gong. Here's a look at all of the companies from the recent LinkedIn Top Startups list that are hiring remote positions. Good luck! You got this! BetterBetter is a fintech company located in New York City aiming to improve the home buying and financing process. Remote jobs available include mortgage underwriter, senior UX writer, and creative designer.GlossierGlossier is a makeup and skincare company based in New York City that was started by beauty editors and is primarily direct-to-consumer but has a growing physical footprint. Remote jobs include lead front end engineer and creative operations project manager.BrexBrex is aiming to be the "all-in-one" finance option for businesses - offering high-limit credit cards, business accounts, a rewards program, expense tracking, and more. Small office hubs are located in San Francisco, New York City, Salt Lake City, and Vancouver, B.C. Remote jobs include art director and manager of social and community support.AttentiveAttentive is a personalized text messaging platform built for innovative e-commerce brands based in New York City. Remote jobs include mid-market sales manager and web marketing manager.OutreachOutreach is an integrated business-to-business platform helping companies drive sales based in Seattle. Remote jobs include corporate counsel, and product and senior email deliverability specialists. GongGong is a revenue intelligence platform based in Palo Alto, with more than 425 active remote roles. Remote jobs include senior user researcher and in-house counsel. MikMakBased in New York City, MikMak is a digital platform for consumer product companies that enables multi-retailer checkout by shoppers and insights solutions to help brands better understand customer behavior. Remote jobs include VP of sales operations and director of product marketing.GravyLocated in Alpharetta, Georgia, Gravy is a "virtual retention" startup helping subscription-based businesses retain their customers through remedying failed payments. Remote jobs include account manager and sales development representative. Daily HarvestDaily Harvest is a plant-based meal delivery service providing a range of smoothies, flatbreads, desserts, snacks, and more through a subscription-based model. (You may have seen their mouthwatering ads on Instagram recently!) The company is based in New York City. Remote jobs include software engineering manager and senior strategic analytics associate. CameoBased in Chicago, Cameo is a video-sharing platform where celebrities and public figures send personalized video messages to fans. Remote jobs include QA automation engineer and lifecycle marketing lead. TherabodyA tech wellness company in Los Angeles, Therabody is best known for the "Theragun," a popular massage-therapy device intended to reduce muscle tension and accelerate recovery. Remote jobs include a quality manager and a copywriter. RampRamp is a corporate credit card company based in New York City that helps business owners save money via expense management, savings opportunities, receipt matching, and other services. Remote jobs include demand generation lead and product and regulatory counsel. GitLabGitLab, a DevOps platform, helps companies deliver software faster and more efficiently from its headquarters in San Francisco. Remote jobs include backend engineering manager, pipeline execution, and senior technical content editor. MedableBased in Palo Alto, Medable is a global platform aiming to get effective therapies to patients quickly, minimizing the need for in-person clinical visits. Remote jobs include HR systems manager and android developer.Guild Education Based out of Denver, Colorado, Guild Education works with employers to help them provide strategic education and upskilling programs for employees. Remote jobs include vice president of operations and technical marketing operations manager. DriftDrift is a conversational marketing platform based in Boston that is designed to enhance the digital buying experience, including features like an AI-powered chatbot and customizable live chat widgets. Remote jobs include onboarding manager and manager of conversation design.RoHeadquartered in New York City, Ro is a health care company that provides virtual primary care services by connecting telehealth, diagnostics, and pharmacy delivery. Remote jobs include associate director of member experience, systems and platforms, and associate manager of offline marketing.BlockFi BlockFi is a financial services company where clients can buy, sell and earn cryptocurrency, based in Jersey City, New Jersey. Remote jobs include manager of retention and loyalty marketing and director of program management. Scale AIScale Al, which is based in San Francisco, is a platform that helps machine learning teams process their data faster and accurately and helps companies supercharge their artificial intelligence efforts. Remote jobs include an IT operations manager.Hawke MediaHawke Media is a marketing consultancy working to grow brands of all sizes, industries, and business models in Santa Monica, California. Remote jobs include content editor, social media, and influencer marketing manager. Boom SupersonicBased in Denver, Boom Supersonic is developing a high-speed airliner built to transport passengers at twice the speed of traditional planes. Remote jobs include senior creative director and recruiter. DutchieFrom Bend, Oregon, dutchie is a technology platform that enables cannabis dispensaries to set up e-commerce operations. Remote jobs include strategic finance associate and manager of database reliability.Lyra HealthLyra Health is an online mental health counseling platform based out of Burlingame, California, that provides therapy and mental health services. Remote jobs include event marketing coordinator and product design manager.GetawayGetaway is a hospitality company in Brooklyn that offers modern cabin rentals that are two hours from major urban centers. Remote jobs include reservations manager and head of growth. Catalyst SoftwareBased out of New York City, Catalyst Software helps sales and customer teams connect the various tools they use into a centralized data-driven view of how a client is doing. Remote jobs include engineering manager on the customer success intelligence team and sales development representative. RubrikRubrik is a cloud-based platform based in Palo Alto that helps companies with data management. Remote jobs include professional services consultants. GeminiGemini is a cryptocurrency exchange in New York City, that enables users to buy, sell and store digital assets. The more than 325 remote jobs available include engineering manager for credit cards, associate director of technical accounting, and senior software engineer. ClickUpClickUp's app combines task management, goal setting, calendars, to-do lists, and an inbox so that teams can be more productive. Headquartered in San Diego, remote jobs include program coaches and professional services consultants. SUPERHUMANSuperhuman, out of San Francisco, wants you to have a better, faster email experience, and they are "re-imagining the inbox" to make it more efficient. Remote jobs include senior mobile engineer and product marketing manager.InnovaccerBased in San Francisco, Innovaccer curates the world's health care information to make it more accessible and useful for providers and organizations. Remote jobs include platform data architect and senior director of healthcare AI.FlowcodeFlowcode allows users to create customized, advanced Quick Response (QR) codes that never expire, making it easier for companies to directly connect their customers to digital resources. Based in New York City, the company is hiring for a remote product analyst.JerryBased in Palo Alto, Jerry helps car owners save money on vehicle insurance. Remote jobs include associate editor and writer/editor.OneTrustHeadquartered in Atlanta and London, OneTrust helps companies manage privacy, security, and governance requirements through its compliance software. Remote jobs include UI architects.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 14th, 2021

How Industry Leadership Has Changed in the Wake of the Pandemic

Industry leadership has always changed in response to world events. Many who led by command and control have given way to leading by influence. Some leaders have replaced top-down coercion with integrity and dedication to an organization rather than to holding power within it. Leadership was already evolving, more rapidly in some industries than in […] Industry leadership has always changed in response to world events. Many who led by command and control have given way to leading by influence. Some leaders have replaced top-down coercion with integrity and dedication to an organization rather than to holding power within it. Leadership was already evolving, more rapidly in some industries than in others. The pandemic, however, stopped everything cold. An unprecedented reckoning, its onset was a great equalizer among companies and their leaders. The sea change caused corporate leaders to forge new partnerships and consider alternative ways of working. It also sparked a reckoning with their companies’ stances on social issues like diversity. Long-term strategic plans went out the window. Even the strongest leaders crumbled if they weren’t agile enough to pivot quickly. The companies that are weathering the COVID storm are also transforming how they do business for the long term. Here are some of the ways industry leaders are changing the game in the wake of the pandemic. Leaders Are Prioritizing the Power of Connection Face time with company leadership has always been important to employees. It’s particularly critical when those employees are anxious about their jobs, their health, and their futures. Absent leadership can cause chaos and panic among the ranks. Popping into the employee holiday party to press the proverbial flesh with a few employees simply will not suffice. Now, there may no longer even be such a party, and many employees will remain working remotely. Nonetheless, leaders need to engage with them frequently, no matter where they are. Fortunately, 21st-century technology makes that connection possible. A virtual conference platform allows leaders to interact face-to-face with anyone, no matter where they are. And this technology goes well beyond engaging employees. It allows everyone in an industry’s community to interact, including customers, suppliers, partners, investors, and more. If the pandemic has revealed anything, it’s that virtual connection is a vital component of your communication strategy. Putting faces with leaders’ names, even if virtually, restores confidence and trust in a company. The ability to connect using technology means leaders can’t hide behind the curtain any longer. They need to use the power of connection to lead, or they will fall behind. Leaders Are Focusing on Internal Processes and Systems There is a tendency for companies to seek inorganic ways to grow rapidly through mergers, acquisitions, and strategic partnerships. With so many companies struggling to survive right now, these opportunities may be low-hanging fruit ripe for the picking. Smart leaders, however, will avoid the temptation. The pandemic laid bare the lack of self-sufficiency and weak supply chains that companies rely on. Now leaders are looking internally rather than externally for growth and strength. Investing in operational capabilities is how industries will scale their businesses in a post-pandemic world. Safety, human resources, supply chains, internal programs and processes, communications infrastructure, technology, and quality improvement will generate growth. Growth from within will increase revenue faster than increasing the external costs of doing business. Companies can reach, attract, and retain more customers once they prioritize internal efficiencies. Industry dealmakers whose expertise and talent are in mergers and acquisitions might find themselves ill-suited for post-pandemic leadership roles. Those who fully understand the nature and inner workings of their companies will excel. It’s a little like a government focusing on domestic rather than foreign policy. In other words, focusing on internal systems and processes will likely bear the best results. Leaders who make this switch will build companies with strong cores. Should anything like a global pandemic happen again, those companies will be prepared. Industry leaders who fail to learn from the lessons of this one may already be gone. Leaders Are Recognizing That Kindness Matters Never has the world been more in need of kindness than at this moment. Leading with kindness in the wake of the pandemic is not a sign of weakness, but of strength. Even the toughest leaders must show a more human side or risk failure. The stress faced by employees whose work-life balance has been eroded is unprecedented. There is no equilibrium between professional and personal lives. The tension between the two calls for leaders to try a little kindness. A recent Gallup poll asked employees if they believed their employer cared about their overall well-being. Only 45% of respondents checked “strongly agree” to the subject. If leaders are counting on employee performance to make their company successful, they must improve that number markedly. Improving employees’ sense of well-being won’t be easy for leaders confronted with a perpetual state of crisis. The good news is that kindness really takes little effort, but a little of it goes a very long way. Furthermore, leading by example rather than words will cause kindness to ripple throughout the organization. Leaders who can recognize the signs of emotional distress and burnout in themselves should also recognize it in their employees. Leading with empathy will increase comfort, trust, and loyalty among your team. That’s where battles are fought and won in business and in life. Leaders Are Building Community Industries are communities comprising everyone who has a relationship with them. This includes everyone from employees and investors to vendors, customers, and even social media followers. A leader’s goal is to nurture their community, and that can be challenging when the world is becoming increasingly small. Leaders can no longer pick and choose which sectors of their community they lead and leave the rest to someone else. The community is the sum of its parts, all of which need to be led collectively. That means understanding who’s in the community and opening the lines of communication with all of them. Leaders who manage to bring everyone into the tent will be effectively communicating a “we’re-all-in-this-together” mentality. That inherent empathy can lift every member, which in turn will rally the entire community. Fail to lift one part, and the tent collapses on everyone. It has always been true that leaders can’t show fear. However, in the wake of the pandemic, they must show compassion, resilience, confidence, and strength in the face of uncertainty. Leaders who can speak to the truth, whether that truth is positive or negative, will build trust. That trust is the key to tearing down walls, dispelling feelings of isolation, and creating more room in the tent. Updated on Oct 12, 2021, 4:24 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkOct 12th, 2021

America"s Funding Challenges Ahead

America's Funding Challenges Ahead Authored by Alasdair Macleod via GoldMoney.com, This article looks at the Fed’s funding challenges in the US’s new fiscal year, which commenced on 1 October. There are three categories of buyer for US Federal debt: the financial and non-financial private sector, foreigners, and the Fed. The banks in the financial sector have limited capacity to expand bank credit, and American consumers are being encouraged to spend, not save. Except for a few governments, foreigners are already reducing their proportion of outstanding federal debt. That leaves the Fed. But the Fed recently committed to taper quantitative easing, and it cannot be seen to directly monetise government debt. That is one aspect of the problem. Another is the impending rise in interest rates, related to non-transient, runaway price inflation. Funding any term debt in a rising interest rate environment is going to be considerably more difficult than when the underlying trend is for falling yields. There is the additional risk that foreigners overloaded with dollars and dollar-denominated financial assets are more likely to become sellers.Not only are foreigners overloaded with dollars and financial assets, but with bond yields rising and stock prices falling, foreigners for whom over-exposure to dollars is a speculative position going wrong will undoubtedly liquidate dollar assets and dollars. If not buying their own national currencies, they will stockpile commodities and energy for production, and precious metals as currency hedges instead. The Fed will be faced with a bad choice: protect financial asset values and not the dollar or protect the dollar irrespective of the consequences for financial asset values. And the Federal Government’s deficit must be funded. The likely compromise of these conflicting objectives leads to the risk of failing to achieve any of them. Other major central banks face a similar quandary. Funding ballooning government deficits is about to get considerably more difficult everywhere. Introduction Our headline chart in Figure 1 shows the excess liquidity in the US economy that is being absorbed by the Fed through reverse repos (RRPs). With a reverse repo, the Fed lends collateral (in this case US Treasuries overnight from its balance sheet) to eligible counterparties in exchange for overnight funds, which are withdrawn from public circulation. As of last night (6 October), total RRPs stood at $1,451bn, being the excess liquidity in the financial system with interest rates set by the RRP rate of 0.05%. Simply put, if the Fed did not offer to take this liquidity out of public circulation, overnight dollar money market rates would probably become negative. The chart runs from 31 December 2019 to cover the period including the Fed’s reduction of its funds rate to the zero bound and the commencement of quantitative easing to the tune of $120bn every month —they were announced on 19th and 23rd March 2020 respectively. Other than the brief spike in RRPs at that time which was a wobble to be expected as the market adjusted to the zero bound, RRPs remained broadly at zero for a full year, only beginning a sustained increase last March. Much of the excess liquidity absorbed by RRPs arises from government spending not immediately offset by bond sales. Figure 2 shows how this is reflected in the government’s general account at the Fed. The US Treasury’s balance at the Fed represents money not in public circulation. It is therefore latent monetary inflation, which is released into the economy as it is spent. Since March 2021, the balance on this account fell by about $800bn, while reverse repos have risen by about $1,400bn, still leaving a significant balance of liquidity to be absorbed arising from other factors, the most significant of which is likely to be seepage into the wider economy from quantitative easing (over two trillion so far and still counting). The US Treasury has draw down on its general account because had it accumulated balances from bond funding in excess of its spending ahead of the initial covid lockdown. And its debt ceiling was getting closer, which is currently being renegotiated. But this is only part of the story, with the Federal deficit running at about $3 trillion in the fiscal year just ended. That is a huge amount of government “fiscal stimulus”, and clearly, the private sector is having difficulty absorbing it all. The scale of this deficit, debt ceilings aside, is set to increase under the Biden administration. If the US economy is already drowning in dollars, it is likely to worsen. Assuming the debt ceiling negotiations raise the Treasury borrowing limit, the baseline deficit for the new fiscal year must be another $3 trillion. Optimists in the government’s camp have looked for economic recovery to increase tax revenues to reduce this deficit enough together with selective tax increases to allow the government to invest additional capital funds in the crumbling national infrastructure. A more realistic assessment is that unexpected supply disruption of nearly all goods and rising production costs are eating into the recovery, which is now faltering. And it is raising costs for the government in its mandated spending even above the most recent assumptions. It is increasingly difficult to see how the budget deficit will not increase above that $3 trillion baseline. This article looks at the funding issues in the new fiscal year following the expected resolution of the debt ceiling issue. The principal problems are its scale, how it will be funded, and the impact of price inflation and its effect on interest rates. Assessing the scale of the funding problem There are three distinct sources for this funding: the Fed, foreign investors, and the private sector, which includes financial and non-financial businesses. Figure 3 shows how the ownership of Treasury stock in these categories has progressed over the last ten years and the sum of these funding sources up to the mid-point of the last US fiscal year (31 March 2021). Over that time total Treasury debt more than doubled to nearly $30 trillion. The funding of further debt expansion from these levels is likely to be a significant challenge. Initially, the Fed can release funds by reducing the level of overnight RRPs, some of which will become absorbed directly, or indirectly, in Treasury funding. But after that financing will become more problematic. Since 2011, the Fed’s holdings of US Treasury debt have increased from 11% to 19% of the growing total, reflecting QE particularly since March 2020. At the same time the proportion of total Treasury debt owned by foreign investors has fallen from 32% to 24% today, and now that they are highly exposed to dollars, they could be reluctant to increase their share again, despite continuing trade deficits. Private sector investors, whose share of the total at 57% is virtually unchanged from ten years ago, can only expand their ownership by increasing their savings and through the expansion of bank credit. But with bank balance sheets lacking room for further credit expansion and consumers inclined to spend rather than save, it is difficult to envisage this ratio increasing sufficiently as well. Clearly, the Fed has been instrumental in filling the funding gap. But the Fed has now said it intends to taper its bond purchases. Unless foreign investors step in, the Fed will be unable to taper. Excess liquidity currently reflected in outstanding RRPs can be expected to be mostly absorbed by expanding T-bill and short-maturity T-bond funding, which might buy three- or four-months’ funding time and not permit much longer-term bond issuance. But after that, the Fed may be unable to taper QE. Foreign funding problems While we cannot be privy to the bimonthly meetings of central bankers at the Bank for International Settlements and at other forums, we can be certain that there is a higher level of monetary policy cooperation between the major central banks than is generally admitted publicly. On matters such as interest rate policy it is important that there is a degree of cooperation, otherwise there could be instability on the foreign exchanges. And to support the dollar’s debasement, policy agreements between important foreign central banks may need to be considered. This is because the dollar’s role as the reserve currency gives the US Government and its banks not just an advantage of seigniorage over the American people, but over foreign holders of dollars as well. Dollar M1 money supply is currently $19.7 trillion, approximately 50% of global M1 money stock.[i] Therefore, its seigniorage and the world-wide Cantillon effect from increasing public circulation is of great advantage to the US Government, not only over its own people but in transferring wealth from foreign nations as well. This is particularly to the disadvantage of any other national government which, following sounder monetary policies, does not expand its own currency stock at a similar rate while being forced to use dollars for international transactions. Ensuring currency debasement globally is therefore a compelling reason behind monetary cooperation between governments. By agreeing on permanent currency swap lines with five major central banks (the ECB, the Bank of Japan, the Bank of England, the Bank of Canada, and the Swiss National Bank) they are drawn into supporting a global inflationary arrangement which ensures the stock of dollars can be expanded without consequences on the foreign exchanges. Ahead of its massive monetary expansion on 19 March 2020, to keep other central banks onside temporary swap arrangements were extended to nine other central banks, ensuring their compliance as well.[ii] But notable by their absence were the central banks whose governments are members and associates of the Shanghai Cooperation Organisation, which will have found that their dollar holdings and financial assets (mainly US Treasuries) have been devalued without consultation or recompense. It is therefore not surprising that foreign governments other than those with permanent swap lines are increasingly reluctant to add to their holdings of dollars and US Treasuries. By selectively excluding major nations such as China from swap line arrangements, by default the Fed is pursuing a political agenda with respect to its currency. International acceptability of the dollar is being undermined thereby when the US Treasury is becoming increasingly desperate for inward capital flows to fund its budget deficits. Even including allied governments, all foreigners are now reducing their exposure to US dollar bank deposits, by 12.9% between 1 January 2020 and end-July 2021, and to US T-Bills and certificates by 20.7% over the same period. The only reason for holding onto longer-term assets is in expectation of speculative gains. The situation for longer-term Treasury bonds is not encouraging. The US Treasury’s “major foreign holders” list of holders of longer-maturity Treasury securities, shows the list to be dominated by Japan and China, between them owning 31.5% of all foreign owned Treasuries. Japan’s cooperative relationship with the Fed was confirmed by Japan increasing her holdings of US Treasuries, but only by 1.3% in the year to July 2021, while China and Hong Kong, which between them hold a similar amount to Japan, reduced theirs by 3%.[iii] The ability of the US Treasury to find foreign buyers other than for relatively smaller amounts from offshore financial centres and oil producing nations therefore appears to be potentially limited. We should also note that total financial assets and dollar cash held by foreigners already amounts to $32.78 trillion, roughly one and a half times US GDP — dangerously high by any measure. This total and its breakdown is shown in Table 1. If foreign residents are to increase their holdings in US Treasuries, it is most easily achieved by foreign central banks on the permanent swap line list drawing them down and further subscribing to invest in T-Bills and similar short-term securities. As well as being obviously inflationary, that recourse has practical limitations without reciprocal action by the Fed. But a far greater danger to Federal government funding comes from dollar liquidation of existing debt and equity holdings, especially if interest rates begin to rise, bearing in mind that for any foreign holder of dollars without a strategic reason for holding a foreign currency, all such exposure, even holding dollars and dollar-denominated assets, is speculative in nature. The question then arises as to what foreigners will buy when they sell their dollars. Governments without a strategic imperative may prefer at the margin to adjust their foreign reserves in favour of the other major currencies and gold. But out of the total liabilities shown in Table 1 official institutions only hold $4.284 trillion long- and short-term Treasuries, which includes China and Hong Kong’s holdings, out of the $7.2 trillion total shown in Figure 2 earlier in this article. The $3 trillion balance is owned by private sector foreign investors. Excluding China and Hong Kong’s $1.3 trillion, US Treasury debt held by foreign governments is under 10% of all foreign holdings of dollar securities and cash. What is held by foreign private sector actors therefore matters considerably more, bearing in mind that it can all be classified as speculative, being a foreign currency imparting accounting risk to balance sheets and investment portfolios. If interest rates rise because of price inflation not proving to be transient, it will lead to significant investment losses and therefore selling of the dollar, triggering a widespread repatriation of global funds. A global increase in bond yields and falling equity values will also force sales of foreign securities by US investors. But with US investors being less exposed to foreign currencies in correspondent banks and with a significantly lower level of foreign investment exposure, the net capital flows would be to the disadvantage of the dollar. Some of the proceeds from dollar liquidation by foreigners are likely to lead to commodity stockpiling and at the margin some of it will hedge into precious metals, driving their prices higher. The long-term suppression of precious metal prices would to come to an end. Domestic problems for the Fed Clearly, the resumption of government deficit funding will no longer be supported by foreign purchases of US Treasuries at a time when trade deficits remain stubbornly high. This throws the funding emphasis onto the Fed and domestic purchasers of government debt. But as stated above, the private sector will need to reduce its consumption to increase its savings. Alternatively, banks which have limited capacity to do so will have to expand credit to purchase Treasury bonds, which is not only inflationary, but diverts credit expansion from the private sector. Consumers are charging in the opposite direction from increasing savings, drawing them down in favour of increased consumption. This is partly due to them returning to their pre-covid relationship between consumption and savings, and partly due to a shift against cash liquidity in favour of goods increasingly driven by expectations of higher prices. With their fingers firmly crossed, the latter is believed by central bankers and politicians to be a temporary phenomenon, the consequence of imbalances in the economy due to logistics failures. But the longer it persists, the more this view will turn out to be wishful thinking. Increasing prices for energy and essential goods, which are notoriously under-recorded in the broader CPI statistics, are emerging as the major concern. So far, few observers appear to accept that they are the inevitable consequence of earlier currency debasement. There is a growing risk that when consumers realise that rising prices are not just a short-term and temporary phenomenon, they will increasingly buy the goods they may need in the future instead of buying them when they are needed. This alters the relation between cash liquidity-to-hand and goods, increasing the prices of goods measured in the declining currency. And so long as consumers expect prices to continue to rise, it is a process that is bound to accelerate until it is widely understood by the currency’s users that in exchange for goods, they must dispose of it entirely. If that point is reached, the currency will have failed completely. It is this process that undermines the credibility of a fiat currency. Before it develops into a total rout, it can only be countered by an increase in interest rates sufficient to stop it, as well as by strictly limiting growth in the stock of currency. And even then, some form of convertibility into gold may be required to restore public trust. This, the only cure for fiat currency instability, is too radical for the establishment to contemplate, and is a crisis that increases until it is properly addressed. The rise in interest rates exposes all the malinvestments that have grown and persisted while interest rates were suppressed from the 1980s onwards, finally ending at the zero bound. The shock of widespread business failures due to rising interest rates will impact early in the currency’s decline when it becomes obvious that initial increases in interest rates will be followed by yet more. Importantly, the supply of essential goods is then further compromised by business failures instead of being alleviated by improving logistics. And consumer demand shifts even more in favour of the essentials in life and away from luxury and inessential spending. The poor are especially disadvantaged thereby and the middle classes begin to struggle. The private sector’s growing economic woes further undermine government finances. Unemployment increases and tax revenues collapse, adding to the budget deficit and therefore to the government’s funding requirements. Mandatory costs increase more than budgeted. Interest charges, currently about $400bn, add yet more to the deficit. Today, in all the major currencies control over interest rates by central banks is being challenged. Like the Fed, other major central banks are also insisting that rising prices are temporary, while markets are beginning to suspect the reality is otherwise. All empirical evidence and theories of money and credit scream at us that statist control over interest rates is being eroded and lost to market-driven outcomes. The consequences for markets and government funding costs There is growing evidence that accelerating monetary expansion in recent years is feeding into a purchasing power crisis for major currencies. Covid and logistics disruptions, coupled with lack of inventories due to the widespread practice of just-in-time manufacturing processes have undoubtedly made the situation considerably worse. But in the history of accelerating inflations, there have always been unexpected economic developments. Shifting consumer priorities expose hitherto unforeseen weaknesses, so it would be a mistake to disassociate these problems from currency debasements. It is leading to a situation which confuses statist economists, who tend to think one-dimensionally about the relationships between prices and economic prospects. For them, rising prices are only a symptom of increasing demand. And so long as expansion of demand remains under control and is consistent with full employment, it is their policy objective. They do not appear to understand rising prices in a failing economy. But classical economics and on the ground conditions militate otherwise. Inflation is monetary in origin, and it is the destruction of the currency’s purchasing power that is evidenced in rising prices. And when the public sees prices of needed goods rising at an increased pace, they begin to rid themselves of the currency. And far from stimulating production and consumption, high rates of monetary inflation act as an economic burden. Monetary policy now faces the dual challenge of rising prices and rising interest rates as the economy slumps. When central banks would expect to reduce interest rates, they will now be forced to increase them. When deficit spending is deployed to stimulate the economy, it must now be curtailed. Just when they matter most, bond yields will rise along their yield curves from the short end, and equity market values will be undermined by changing yield relationships. Falling financial asset values become a consequence of earlier monetary inflation undermining a currency’s purchasing power. The Fed, the Bank of England, the Bank of Japan, and the ECB have all acted together to accommodate government budget deficits, to be funded as cheaply as possible by suppressing interest rates. That they have acted together has so far concealed the consequences from bond markets, whose participants only compare one government bond market with another instead of valuing bond risks on their own merits. And through regulation, banks have been made to view investment in government bonds as being risk-free for counterparty purposes. All this is about to change with the turn in the interest rate trend. Monetary policy will have two basic options to weigh; between supporting the currency’s purchasing power by increasing interest rates, or to support financial markets by suppressing them. If the latter is deemed more important than the currency, it will most likely require more quantitative easing by the Fed, not less. Expressed another way, either central banks will pursue the current policy of maintaining domestic confidence and the wealth effect of elevated financial asset values and let the currency go hang. Alternatively, they can aim to support their currencies, and be prepared to preside over a collapse in financial asset values and accept the knock-on consequences. It is a dirty choice, with either policy option likely to fail in its objective. The end of the neo-Keynesian statist road, which started out lauding the merits of deficit spending is in sight. Mathematical economics and the state theory of money are about to be shown for what they are — intellectualised wishful thinking. As the most distributed currency, the dollar is likely to lead the way for all the others, slavishly followed by the Bank of England, the Bank of Japan, and the ECB. And all their high-spending governments, addicted to debt, will face unexpected funding difficulties. Tyler Durden Mon, 10/11/2021 - 17:40.....»»

Category: personnelSource: nytOct 11th, 2021

Inside the Battle for the Hearts and Minds of Tomorrow’s Business Leaders

Tima Bansal begins every new course with a cautionary statistic for her business school students. A 2008 study found that MBA candidates enter business school with more community-oriented values, but graduate with more selfish ones. “They come in caring about the world, and they leave caring more about themselves. Why?” she says. Bansal, a professor… Tima Bansal begins every new course with a cautionary statistic for her business school students. A 2008 study found that MBA candidates enter business school with more community-oriented values, but graduate with more selfish ones. “They come in caring about the world, and they leave caring more about themselves. Why?” she says. Bansal, a professor at Ivey Business School in London, Ontario, thinks she knows the answer. “At the heart of every single course that we teach is this orientation toward profit or leadership or themselves,” says Bansal, one of a growing number of academics who want to change that. MBA programs, they say, can no longer justify teaching future business leaders to maximize profits at the expense of the planet. The way Bansal and others see it, the world would be a better place if more businesses played an active role in tackling social and environmental challenges, from climate change to global poverty. And if the leadership ranks of major companies don’t adjust the way they do business, they warn, their fixation on making money and rewarding shareholders will exacerbate inequality and climate disasters. [time-brightcove not-tgx=”true”] “We have a crisis on our hands, and business schools need to act,” Bansal says. “We have a crisis on our hands, and business schools need to act.”The world’s major corporations stand at a crossroads. Many Boomer and Generation X executives have grudgingly come to the realization in recent years that they can no longer straddle the fence or remain silent on thorny social and political issues. To attract and retain the best and brightest Millennial and Gen Z employees, companies are facing pressure to express their opinions and take action on critical matters, including racial injustice, climate change and income inequality. A majority of college students (68%) say companies should take public stances on social issues. Another 16% said they wouldn’t work for a company that did not, according to a recent Axios/Generation Lab poll. Another survey, by Washington State University’s Carson College of Business, found that 70% of Gen Z employees want to work for a company whose values align with their own, and 83% want to work for a company that has a positive impact on the world. Courtesy Tima BansalTima Bansal, a professor at the Ivey Business School in London, Ontario. That demand is reflected in the young people seeking business graduate degrees. At Boston University’s Questrom School of Business, the number of students in the Social Impact MBA program has nearly doubled in the last decade, growing from 79 in 2011 to 155 in 2021. Since leaders at the University of Vermont ripped up the 1970s-era MBA format and redesigned it around sustainability—the term used to describe businesses that are environmentally and socially conscious—the program has grown from 20 students in 2014 to 47 in 2021. They’re considering expanding the program to 70 or 80 students after receiving a record number of applications last year. Companies are also facing pressure from consumers who increasingly want to buy eco-friendly, ethical products from businesses that share their values. Nearly 80% of consumers say it’s important that brands are sustainable and environmentally responsible, according to a 2020 study by IBM and the National Retail Federation, which polled consumers in 28 countries. A majority (57%) of those consumers say they’re willing to change their shopping habits in order to reduce the negative impact on the environment. For the first time this semester, Presidio Graduate School in San Francisco offered MBA students an eight-week elective course on promoting anti-racism in the workforce, adding to courses on leading inclusive organizations, prioritizing social justice in supply chains and exploring renewable energy systems. Liz Leiba—an adjunct professor teaching the course, which covers the advantages and challenges of building a diverse workplace and how to identify discrimination and bias—thinks it should be required for all students. “Diversity sometimes has been an afterthought,” she says. “Marketing is not an afterthought. Sales is not an afterthought.” Read more: What Happened When Facebook Shut Down the Team That Put People Ahead of Profits The movement amounts to a fight for the hearts and minds of tomorrow’s business leaders by changing how MBA students are educated. “Can we possibly justify teaching students to go out and profit their investors by depleting society and the rest of the planet?’ It’s just not a viable ethical position,” says Tom Lyon, faculty director of the Erb Institute for Global Sustainable Enterprise at the University of Michigan’s Ross School of Business. But change has been slow. Universities are large, traditional institutions that tend to stick with what they know, and many major business schools have not overhauled tried-and-true programs, instead offering one-off courses on sustainability or ethics. “We can’t do business as usual. We have to do new business.”Maggie Winslow, the academic dean at Presidio, which aims to include sustainability and social justice in every business course, says when she offered to help the dean of another business school start a sustainability curriculum, she was told “that’s just a fad.” Lyon has struggled to get concepts such as sustainability and corporate political responsibility fully integrated into the core curriculum and notes that there hasn’t been a critical mass of students or donors demanding that change. “It’s like the MBA core is the inner sanctum of the religion of business schools. And every area feels like, ‘I have my sacred concepts I must teach, and I cannot make room for these sort of nice, but superfluous ideas,’” Lyon says. And many of the business schools that have been leading the charge on this front are not among the country’s top-ranked MBA programs, suggesting that the most competitive business schools are hesitant to disrupt a time-tested curriculum. But as the world experiences the devastating effects of climate change and the country confronts centuries of racial injustice, many professors argue that change has never been more urgent. “It’s an all-hands-on-deck kind of moment,” Lyon says. “We’re close to a point of turning the planet into a place that is much less inhabitable than it’s been for the last millennium.” ‘A 50-year-old paradigm’ Dartmouth founded the first graduate school of management in 1900 with the Tuck School of Business, and Harvard launched the world’s first MBA program in 1908. The MBA has since grown to be the most popular postgraduate degree in the country, making up 24% of all master’s degrees earned in the 2018-19 school year, according to the National Center for Education Statistics. But the world has changed dramatically since the MBA first became a rite of passage for business leaders, raising questions about whether courses in marketing, microeconomics and finance are a sufficient foundation for business leadership. MBA applications surged as the pandemic caused economic challenges and mass unemployment, but business schools had been contending with several years of declining applications before that. “Business schools are still operating out of a 50-year-old paradigm. And I think that’s the fundamental problem,” Lyon says. “All the businessman had to do was just maximize profits, play within the rules, and everything was fine. And the problem is, our rules need to be changed. The system isn’t really working anymore.” Climate change is expected to cost the global economy as much as $23 trillion by 2050, according to a 2021 report by the insurance company Swiss Re. And a reckoning over racial injustice has intensified calls for corporations to do more to promote equity and and diversity. Courtesy Alyssa Gutner-DavisAlyssa Gutner-Davis, a student at Boston University’s Questrom School of Business. “My impression was if you go to business school, you’re only focused on the economics.”Alyssa Gutner-Davis, a second-year student at Questrom, says if you had told her in college that she’d one day go to business school, she would have laughed. “My impression was if you go to business school, you’re only focused on the economics and do the economics pencil out, and there’s no room for thinking through any other considerations,” says Gutner-Davis, 31. But she enrolled in Questrom’s Social Impact MBA program—which includes courses on impact investing, discrimination in the workplace and environmentally sustainable supply chains— because she wanted to understand business basics in order to pursue her interests in environmental justice and clean energy. The demand is coming from corporations too. In June, the accounting firm PricewaterhouseCoopers announced it would invest $12 billion over five years to create 100,000 new jobs, many with an environmental, social, and governance (ESG) focus. Read more: Wildfires Are Getting Worse, So Why Is the U.S. Still Using Wood to Build Homes? “Student demand is increasing. You can see employers are seeking graduates with these skills and knowledge. There’s demand from society for business schools to positively contribute to tackling some of these grand societal challenges,” says Caroline Flammer, co-faculty director of Questrom’s social impact program. She teaches a course called Social Impact: Business, Society, and the Natural Environment, which she thinks should be required for any MBA student. “In my view, the Social Impact MBA program should be the MBA program.” “Student demand is increasing. You can see employers are seeking graduates with these skills and knowledge.” At Michigan, Lyon teaches a course on the economics of sustainability to undergraduates and a course on energy markets and energy politics to graduate students. He’s working on building a task force on corporate political responsibility, aiming to confront the way companies too often “focus on their own short term profits at the expense of the larger society.” He would like to see the concepts of ethics, sustainability and political responsibility fully integrated throughout all MBA courses, not just tacked on as a single course. Dan WatkinsCaroline Flammer of Boston University’s Questrom School of Business. That’s how Sanjay Sharma, dean of the University of Vermont’s Grossman School of Business, redesigned the school’s MBA program, with sustainability embedded in every subject. Students learn about impact investing, carbon pricing and analyzing social and environmental risks. They explore all case studies through a lens of environmental and social justice impacts. Sustainability has been part of the core curriculum at Ivey, in Ontario, since 2003. When Bansal first began integrating business sustainability into strategy, finance and marketing courses—teaching students to take a long-term view and to consider social and environmental impacts in business decisions—she confronted the perception that environmental issues didn’t belong in business education. Now, she hears from students who say they “desperately need more” of these classes. She thinks MBA programs need to do a better job of preparing students to solve today’s global challenges. “You have to have corporations that build products that solve not just their own profits, but products that actually make the world better,” she says. “That requires a different type of thinking.” ‘Business moves faster than academia’ Sharma knows that MBA programs like his, built entirely around sustainability, are still niche. Top-ranked business schools with powerful brands don’t seem eager to upend successful programs that are still attracting thousands of applicants willing to spend as much as $200,000 for their degrees and producing highly employable graduates. “Business moves faster than academia,” Sharma says. but he thinks all business schools will be forced to adapt eventually. “If organizations demand it and if society demands it, then it’ll start happening faster.” He and his peers are confronting a lingering stigma that courses on sustainability or social justice are nice, but not essential. “I wish I could say the vast majority of Ross students were beating down the doors for ethics and sustainability. And, you know, they’re not,” Lyon says. “The real drivers are student demand and donors. So if students start saying, ‘We have to have this material,’ schools will change.” For university leaders, there’s nothing simple about revamping decades-old curricula or persuading tenured faculty to change their courses. But the global realities of climate instability and resource shortages could force their hand. “If you only plan to be in business for five years, maybe you don’t want to think about it. But if you want to be in business for 50 years, then we all have to think about this,” says Winslow, the Presidio dean. “We can’t do business as usual. We have to do new business.”.....»»

Category: topSource: timeOct 8th, 2021

Black and Hispanic mothers face dangerous hurdles during pregnancy - the CEO of a $1 billion startup is on a mission to change that

In the latest Equity Talk, the billion-dollar startup founder Kate Ryder said she wanted to reimagine healthcare. Samantha Lee/Insider Maven CEO and founder Kate Ryder built a healthcare startup valued at over $1 billion. Maven In an Equity Talk, Maven CEO Kate Ryder shared a vision for a more equitable women's health system. Maven recently secured $110 million in funding, bringing the company's valuation to $1 billion. Ryder is focused on expanding health services for women of color and women who receive Medicaid. See more stories on Insider's business page. In 2012, Kate Ryder closed the book on a journalism career and joined the world of venture capital. The then-30-year-old started thinking about the problems she could solve through startups. Talking with her friends brought up a big one. Like many women, Ryder's friends shouldered the brunt of child-rearing responsibilities before, during, and after their 9-to-5s. Navigating the healthcare system, they said, was a nightmare. So in 2014, Ryder founded Maven, a virtual health clinic for women and families that's now valued at over $1 billion. Her mission was and is to make the healthcare system easier for women and families to navigate. Things changed in 2020 after she saw COVID-19's outsize influence on Black and brown women and the civil-rights reckoning of the summer. These events changed Ryder's perspective on her calling. What was a company for families more broadly would need to more closely center the experiences of marginalized ones. "George Floyd's murder opened up my eyes to things that I didn't know," she said. "I want to help create a more equitable world through healthcare." To be sure, the company has always strived to be inclusive. Maven provides parents (including queer and single parents) with fertility, pregnancy, adoption, parenting, and pediatric services. It's also funded by a powerful group of women investors.But now, Ryder is honing her focus on creating better healthcare solutions for mothers and parents from marginalized communities. The company is building products and services for parents who utilize Medicaid. The healthcare system is especially difficult for women of color to navigate: Medical research from the Centers for Disease Control and Prevention found they often must advocate for themselves more than white women to receive adequate treatment, as Serena Williams' near-death birthing experience made clear for many. Maven pairs every user with a patient advocate who helps connect them with the right providers, schedule appointments, and find additional resources. It also lists providers who have experience with certain communities to better tailor the health journey to the patient."I want to change the health of the world, one woman and one family at a time, and really provide more access to care," she told Insider. "My goal is to fill the gaps in care with a reimagined care model for women and families." In an Equity Talk, Insider's new series featuring executives discussing their work to advance social justice, Ryder shared her vision for the company and how she was strengthening diversity, equity, and inclusion (DEI) for customers and employees.This interview has been edited for length and clarity. In August, you raised over $110 million, bringing the total amount of funding to over $200 million. What are you focused on building right now? One of the big things we're going to be focusing on is further personalization across all the journeys our members go through. There's a first-time mom's journey and a third-time mom's journey. There's the IVF journey versus the surrogacy journey. We're also deeply concerned about health equity.There's the journey of the single mom who works an hourly job. How do we make sure our model and technology is compatible with the pain points and needs she has? We put the chief medical officer for the home, whoever that is, at the center of our platform. Internally, we're going to continue to focus on advancing diversity, equity, and inclusion. How are you advancing DEI internally at Maven?One thing we're really proud of is we offer unlimited vacation, flexible working options, and 14 weeks of paid parental leave. I think it's really important when you're looking at DEI to actually be very principled in your approach. What are the principles? What are the problems you're trying to solve for? And then build that into your KPIs and policies. We treat DEI like any other business goal, just like revenue or sales. So that ensures we're creating positive change. We wanted to ensure that a mom, a parent, has enough bonding time with their child in those first crucial months. I also want to create an environment where there's room to be your whole self, and that includes if you're a parent. That has to be modeled from the top. My son will show up in Zoom calls. I'll talk about my kids in meetings. We have lactation rooms in our office. I want to create that space for employees to be their whole selves. You mentioned you treat DEI goals like you do marketing goals or hiring goals. Can you show me how you do that? We publish our workforce statistics on our website. So it's very transparent to everybody what the racial and gender makeup of our employees is. I think you can't make things better unless you're actually honest about your data. So you can see that on our website.Last June, after George Floyd was murdered, and there was a lot of conversation around how to solve the problems of racism at your own companies, we built these DEI groups. One group is focused on improving the company's hiring process. One is focused on the product representation, meaning do we have diverse representation in our product? We're improving our company that way.But DEI goes beyond race and gender. One group we realized we did not represent well enough was people with disabilities. And so we put more of that in our product visuals and goals. We're trying to go beyond just checking a box. It's a business priority in and of itself.As a leader, how were you changed by George Floyd's murder and the summer of 2020? A few years ago, during the height of the #MeToo movement, there was a point where some of my male friends said, "Wow, I didn't realize when you walk home at night, you might worry about all these things." I think with George Floyd, I was having those kinds of realizations. So I think it was a good wake-up call for everybody to really look at our representation across society and at our own companies and think, "How can we do better?" Because it's not acceptable where we are today. What's your next big diversity or inclusion project you're focused on over the next year?We're launching products for our first Medicaid customers next year. I think in this healthcare environment, where COVID-19 has laid bare around the racial disparities in care, but to really walk the walk around health equity, you have to serve the population that accounts for almost half the births that are on Medicaid plans. So from a product standpoint, we're genuinely going after diversity and inclusion. So you're really pushing health equity and making it central to your business model. Yeah. We're doing it not only because it's really critical to our mission, but it's like half of the population. So from a market standpoint, too, you're just missing a lot if you don't do that.I think we've learned a ton because we've always had diverse providers in our community, and we've always done cultural care matching. So we have a lot of learnings that we're leveraging as we continue to build out this product. I really think creating an equitable health system starts with bringing diverse experiences, backgrounds, and perspectives together.In your opinion, what role does a CEO play in society? It's changing a lot. I think that in the past, it was, of course, a CEO's job was to maximize shareholder value. I think that given that, you know, there hasn't been as much leadership at the government level, I think people are looking for more meaning and guidance by the leaders that they see in their day-to-day lives, including in the workplace.I think CEOs of companies are stepping up to fill some of these voids. So, for instance, with George Floyd's murder, I don't think 20 years ago you would have seen companies donate to charities or make investments as a reaction. But we made that choice to do so because we felt it was really important. Everyone at Maven wants a better world right now, so how do we do our part? We have to compete in the marketplace and be an operationally excellent business not only because that's how you win and how you scale, but it allows us to do a lot of these DEI initiatives and apply that same operational rigor to them so we can actually move the needle on some of these issues. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 6th, 2021

What Capitalism’s Would-Be Reformers Can Learn From a Burger Joint Magnate

Just 5% of businesses in the U.S. are owned by Black entrepreneurs like Nicholas M. Perkins, even as Black people comprise 13% of the U.S. population. Nicholas M. Perkins is driven by many things, chief among them a desire to deepen his impact and a nostalgia for the taste of a good burger. Growing up in Fayetteville, NC, a teenage Perkins attended baseball camp in Alabama and savoured pit stops at Fuddruckers along the way. He loved the burgers, the buns baked and meat ground on premises, and he heaped on the pico de gallo from the toppings bar. Today, after a complicated series of deals just closed in August, the 40-year-old Perkins owns the chain; his company acquired 14 Fuddruckers outright and he serves as franchisor for the rest. [time-brightcove not-tgx=”true”] Just 5% of businesses in the U.S. are owned by Black entrepreneurs like Perkins, even as Black people comprise 13% of the U.S. population. The reasons for this include a lack of access to capital and family financial resources to allow entrepreneurs to take on risk. That makes Perkins’ story a noteworthy model of entrepreneurial success, especially in a moment when corporations and individuals have pledged major support for Black-owned businesses and are looking to foster more of them. But, beyond that, his playbook offers examples of how companies can actually give back to society, in contrast to corporate press releases about “stakeholder capitalism” that often are little more than platitudes. A conversation with Perkins makes clear that Black businesses and their focus on social entrepreneurship predates the latter becoming trendy, especially during the pandemic. The history and essence of Black entrepreneurship is that enterprises are often born out of necessity, according to Perkins, and designed to uplift not just their proprietor but the surrounding community. He plans a similar approach in turning around the Fuddruckers brand, promoting a vegan and environmentally friendly menu and making it easier for women and people of color to buy franchises. The entity running the restaurants is Black Titan Franchise Systems LLC, named after a book Perkins read in college, Black Titan: A.G. Gaston and the Making of a Black Millionaire. Gaston, a prominent African-American businessman in the South, innovated enterprises from bank lending to burial insurance for his community. “He singlehandedly established a Black middle class in the Civil Rights years,” Perkins said. “He used business and entrepreneurship to become a social entrepreneur, to help people who were facing adverse socio-economic conditions and discrimination.” Raised by a single mother and his grandmother (she lived in public housing), Perkins launched his first business in food services simply as a path out of his circumstances. “I learned very early on that business and entrepreneurship could give you the opportunity to control your own freedom,” he said. The art and anatomy of the deal It took more than a year, and Perkins’ purchase of the burger franchise required a small army. One early source of support was Loida Lewis, the widow of Reginald Lewis. Lewis’ company, TLC Beatrice, became the first Black-owned company to top $1 billion in annual sales in 1987. His book, Why Should White Guys Have All the Fun? was published posthumously, co-authored by Blair S. Walker, another Perkins adviser. Perkins never intended to buy Fuddruckers. Sixteen years ago, he set up the food-service business and landed several contracts with historically Black colleges and universities. Things were going well: he rose to prominence, donated $1 million to his undergraduate alma mater Fayetteville State University, and taught at his business-school alma mater Howard University. In 2019, Perkins felt an urgent need to diversify beyond these contracts because he wasn’t sure how much more he might grow and thought he should make an acquisition. During a routine Google search, he learned that Houston-based Luby’s, a cafeteria operator and the franchisor of Fuddruckers, was up for sale. He reached out to Luby’s CEO Chris Pappas (who, separately, runs full-service restaurants like Pappadeaux Seafood Kitchen and Pappasito’s Cantina). Perkins learned that about 150 companies were interested in Luby’s assets. Originally, Perkins wanted to buy all of Luby’s. But the process proved onerous due to the size of the latter’s real-estate holdings. Restaurants have been spending much of the pandemic rethinking their cavernous footprints, and obtaining financing remains difficult. Perkins says he cannot discuss terms of the deal but says it was a mix of debt and equity, with all of the latter put up by the newly formed Black Titan. Black Enterprise magazine estimates the purchase at $18.5 million; that figure is for the brand alone, not the franchises purchased previously. In a tweet, Howard University hailed Perkins as “the first African American with 100% ownership of a national burger franchise.” Since the summer announcement, Perkins has received a steady stream of media attention, from the Houston Chronicle to Nation’s Restaurant News. “I’ve had contracts the size of the Fuddruckers business in the past, but they don’t come with the same visibility as this particular opportunity,” said Perkins. “What it means is shining a light on what African-American entrepreneurs can do when given the opportunities.” What lies ahead for Fuddruckers Before the fast-casual options of Panera and Chipotle, before the burger boom of Five Guys and Bareburger, there was Fuddruckers. Perkins’ work to turn the brand around is cut out for him. Yelp reviews of remaining Fuddruckers are all over the map, such as this from a customer in Commerce, GA: “I was disappointed. I love Fuddruckers! But not this location… And wow did the prices go up? WTF? $30 For 2 burgers and drinks and 1 order of fries? With no toppings bar???!” Indeed, Covid did force Fuddruckers to rethink the custom toppings bar; some locations give customers sanitizer and gloves, or a pre-packaged version, while others have nixed the offering entirely. Perkins says he plans to introduce a broader plant-based menu, experiment with limited-time offerings, and introduce a loyalty program. “We have a dedicated and loyal base, but Gen Z doesn’t have that benefit. You have to market to them differently,” he said. “We have to reimagine Fuddruckers.” Increasing diversity among franchise owners is another goal; franchisees currently have to pay a fee of $35,000 to open a Fuddruckers outlet, along with a capital investment of several hundreds of thousands of dollars. Perkins notes that the trend toward smaller restaurant spaces that emerged during the pandemic might lower the costs for franchisees to get up and running. He also notes that businesses owned and operated by people of color tend to hire other people of color. Mentoring has been a constant in Perkins’ climb, he says. When he teaches at Howard, for example, he makes time to connect with students beyond the classroom. Notably, he did not wait to get to the top of the ladder before giving back. A bachelor CEO Now splitting his time between Charlotte and Houston, Perkins says he’s on the road for about two weeks each month. Some press mentions his bachelor status, and I ask if people are trying to set him up post-acquisition. He laughs. “I struggle with this a bit,” he said. “Yes, it is a choice. I have sacrificed that aspect of my life.” Then he gets quiet and serious. Reminding me that he has never met his father, Perkins says, “I am a gunslinger when it comes to my risk tolerance level. If I had a wife and kids, it would temper my risk tolerance. I don’t have the courage to test that.” Certainly, he reminds me, he could provide for them, but that’s not the same. “Being an absentee parent is not something I would want to do.” His thoughts, still, are consumed by family. He’s been thinking about his late grandmother a lot lately. She introduced him to Southern cooking, soul food, and hospitality. He named Laurene’s Cafeteria, which he runs in Charlotte, after her. “I don’t trust a lot of people. That’s why I focus on business as much as I do. Entrepreneurship is freedom and it’s something I can control,” he said. “My grandmother…that was the truest and most genuine relationship I ever had. I wonder if she were alive, how would she feel about what I was able to do?”.....»»

Category: topSource: timeOct 5th, 2021

Pulling Back The Curtain On Private Equity

Excerpted from The Myth of Private Equity: An Inside Look at Wall Street’s Transformative Investments by Jeffrey C. Hooke. Copyright (c) 2021 Jeffrey Hooke. Used by arrangement with Columbia Business School Publishing. All rights reserved. Q2 2021 hedge fund letters, conferences and more When a publisher receives a book proposal, it is not unusual for the publisher […] Excerpted from The Myth of Private Equity: An Inside Look at Wall Street’s Transformative Investments by Jeffrey C. Hooke. Copyright (c) 2021 Jeffrey Hooke. Used by arrangement with Columbia Business School Publishing. All rights reserved. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2021 hedge fund letters, conferences and more When a publisher receives a book proposal, it is not unusual for the publisher to ask outside authors, experts, and academics to review the proposal and to make comments on the book’s content and marketability. This book outlines the mediocre performance of leveraged buyout funds, as well as the funds’ continuing ability to cloud this fact. One reviewer for a prospective publisher of the book had this to say: Mr. Hooke can’t be right about the leveraged buyout industry. If he were, the participants in this part of the capital markets would be suffering from a mass hallucination! This reviewer’s opinion is simply wrong. The buyout phenomenon, which has taken hold of numerous educated and experienced businesspeople, is not a hallucination. Rather, it is a manifestation of the irrationality that grips Wall Street from time to time. The Private Equity Industry Is Not The Same As It Was Before The buyout business is not what it was twenty years ago, and it is living off a reputation for high returns that is now undeserved. This conclusion contradicts accepted Wall Street wisdom—but as one bond trader said about commonly held beliefs in financial markets, “It’s the accepted wisdom, until it isn’t.” Such became the case with the abrupt endings to the mortgage-backed-securities and dot-com stock crazes. For now, despite any number of statistical studies that show buyout funds do not perform as advertised, the industry still has positive buzz. Over the last eighteen months, for example, six new $10 billion-plus funds have opened, and 2020 was the best year ever for buyout fundraising. Last year, Calpers, the $400 billion California pension plan that is the bell cow for hundreds of institutions, announced that it will increase its allocation to private equity funds to get a better yield. Yet the plan’s total-value-to paid-in ratio for private equity investments over thirty-five years is only a modest 1.5x, which puts the plan’s PE portfolio in neutral territory compared to stocks. How has the industry’s mystique gone unchallenged for these many years, enjoying a lifespan that is two to three times longer than other investment fads? In part, the secrecy of the industry and the complexity of its data have blocked the most intrepid doubting Thomas from confirming suspicions. The mortgage-backed-securities and dot-com investments were publicly traded, and, over time, skeptics were able to point repeatedly at adverse information to build up credibility. In contrast, the rates of return, fees, and diversification attributes of the buyout asset class are shrouded in a numbers fog. An investigation surrounding the last fifteen years’ of performance remains dependent on what the industry says its unsold companies are worth, even as the high proportion of unsold investments—56 percent at last count—suggests that few portfolio firms have willing buyers at reasonable prices. Otherwise, the funds would have sold the investments and moved on. A Self-Perpetuating Feedback Loop Meanwhile, a self-perpetuating feedback loop allows the industry to operate in a parallel universe where the laws of financial physics do not apply. To illustrate, buyout managers sell their product as a way to beat the stock market; however, for the last fifteen years, the average fund underperformed the S&P 500. The managers say the product has less risk than the stock market and low correlation to it, but both assertions are refuted by the proven impact of leverage on corporate value movements. The established relationship between debt and equity is based on sixty years of classical finance theory and is endorsed by Nobel laureates such as William Sharpe, Harry Markowitz, and Merton Miller. Special accounting rules, approved by the appropriate authorities, permit PE managers to mark-to-market their own portfolios with minimal oversight and empower institutional investors to ignore expensive carried interest fees. Compounding this oddity is that the carried interest can kick in even when a fund underperforms the stock market. “Don’t ask, don’t tell” becomes the institutional refrain with respect to such elevated fees. A lack of regulatory standards provides the funds with the latitude to choose among multiple yardsticks for performance assessment and top-quartile ranking. The reliance on easily manipulated internal-rate-of-return (IRR) measurements, instead of the more neutral total-value-to-paid-in ratio, distorts actual economic returns at a time when investors need accuracy. The industry’s principal customers—state and municipal pension plans, university endowments, fund-of-funds, and nonprofit foundations—have administrators who commit their employers to private equity for career preservation, since the logical investment choice—a low-cost public stock index fund—obviates the need for their own jobs. Regulatory agencies, such as the IRS, SEC, and Department of Labor are noticeably absent. And thus, the feedback loop that perpetuates the business is complete. The longevity of the feedback loop rests on a key underpinning, according to one observer: “Everyone makes money except the beneficiaries (of the institutional investors), so the system lives on.” Private equity managers, investment consultants, and institutional executives make good livings at the expense of state and municipal retirees, university students, fund-of-funds clients, and foundation grantees, so no one wants to blow the whistle. Updated on Oct 1, 2021, 2:39 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkOct 1st, 2021