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Inquirer Daily News

Archive: March, 2012

POSTED: Wednesday, March 28, 2012, 11:40 AM

Customers Bancorp Inc., the Wyomissing, Berks County-based bank started by Jay S. Sidhu after he left Sovereign Bancorp, plans to raise $115 million in a public stock offering, Sidhu told the Securities and Exchange Commission in this filing.

Sidhu built Customers into a $2 billion-plus-asset bank, focusing on small-business owners, nonprofits and consumers, from offices in the Philadelphia, Reading, and Princeton areas and in New York's northern suburbs.

Sidhu started Customers First with a 2009 investment in the former New Century Bank, a troubled Phoenixville lender run by Kenneth Mumma, publisher Steve Forbes' brother-in-law. Mumma served as a consultant to the bank until last year.

POSTED: Wednesday, March 28, 2012, 11:35 AM

Richard Vague cohosted and helped underwrite the Atlantic Economy Summit in Washington back on March 14. Ex-Fed chairman Paul Volcker generated rivers of video and roads of print for the event just by commenting on the news of the day - the Goldman Sachs resignation letter as an example of why we need his own bank-breakup Volcker Rule.

The conference united Volcker with Fed critics Peter Schiff and Alan Meltzer, Obama aides Laura D'Andrea Tyson and Gene Sperling, and other influential wonks. For Vague the conference's greatest value was in the "little gems" of revelations - over just how deep the US deficit is (really deep), the expense of Obama's Medicaid expansion (really ghigh), the extent of American's private indebtedness (really large), and how much economic growth could help wipe these problems out (some). 

"We got a lot of feedback that 'you never see this in D.C.,'" Vague told me last week. "Our goal was very modest, to unite people from across the Spectrum. Not just neo-Keynsians, and not just all-Tea Party." 

POSTED: Wednesday, March 28, 2012, 10:48 AM

US Sen. Tom Carper, D-Del., says he's "disappointed" that the Senate voted last night to delay debate on postal-reform legislation designed to save the Postal Service from running out of money by changing the way postal retirement and health spending is collected and giving postal bosses more freedom to close unprofitable facilities.

Instead the Senate will continue arguing, for now, about Sen. Bob Melendez, D-NJ's legislation to repeal oil and gas tax breaks.

But Carper says he's heartened that both Demcorats and Republicans in the Senate have spoen in favor of the bill, "and I look forward to the Senate considering this legislation" after it gets back from its April recess.  

POSTED: Wednesday, March 28, 2012, 10:39 AM

A new Delaware state loan program has sweetened expansion plans for a cargo tracking software and device company owned by a Texas buyout firm.

TotalTrax has moved its headquarters to a larger facility in Newport, Del., from nearby New Castle, with help from a $445,000, 3-year loan package. Three-quarters of the financing was supplied by Lancaster-based Fulton Bank, at 4.99%. The other $111,250 was supplied by the state-run Delaware Economic Development Office's new Delaware Small Business Credit Initiative, at 2%.

TotalTrax, owned by Dallas-based Pharos Capital Group, will employ around 50  at the site, up from 35 in the former New Castle facility, with future expansion in the works, state spokeswoman Nikki Lavoie told me. Gov. Jack Markell and Sen. Tom Carper, D-Del, are expected for a "grand opening" Friday with TotalTrax chief executive Mike Kinnard.

POSTED: Wednesday, March 28, 2012, 10:17 AM

As many as 20 U.S. cities could ask for court protection and reorganization under Chapter 9 of the federal bankruptcy code this year, including Providence, Rhode Island, which is seeking to escape paying all the public-worker pension costs its politicians have promised but failed to fund over the years, according to participants at Bond Buyer's Philadelphia-based conference on "Distressed Municipalities" this week. Bloomberg story here.

Meanwhile the state takeover of Harrisburg's decrepit finances shows signs of unraveling. Dauphin County Judge Todd Hoover has told the city's creditors they can hire their own receiver to run the city incinerator, which has defauled on its loans -- raising questions about the ability of state-appointed receiver David Unkovic to solve the city's chronic financial incapacity using the city takeover law Gov. Corbett and Dauphin County legislators rushed through the General Assembly last year.

The state would have been better off letting the city file for Chapter 9, says Mark Schwartz, lawyer for the City Council that tried to resist the state takeover so it could boost taxes and trim fees to bond investors instead of having to sell city assets as the state proposes. Bond Buyer story here.

POSTED: Wednesday, March 28, 2012, 4:30 PM

Aberdeen Asset Management, the Scotland-based investment group whose US office and stock- and bond-picking group is based in Center City, is the latest investment company to put together a junk bond fund for investors who hope high-yield returns, lately in the high-single-digits, will remain more attractive than stock profits or short-term rates.

Keith Bachman, a veteran Philadelphia fund manager who joined Aberdeen three years ago, is rolling out a new US version of Aberdeen's European-registered, $180 million-asset Global II U.S. Dollar High-Yield Bond Fund, for 401-k plan retirement investors, among others. The new Aberdeen U.S. High Yield Bond Fund, seeded with $10 million, is Bachman's attempt to limit risks and boost profits from sub-investment-grade bonds.

"We think growth in this sector will be extraordinary," Bachman, a veteran Philadelphia bond researcher and buyer, told me in Aberdeen's Mellon Center office. 

Aren't junk bonds risky for retirement investors? "We're very concerned with downside control," he told me. The $1 trillion-plus high-yield marketplace includes a lot of issues Aberdeen High Yield won't buy. It will buy limited portfolios of busted convertibles, investment-grade securities, European and Asian high-yield, and short-sold American issues, and some private placement loans. 

That said, here's examples of what the fund's European cognate has bought:

POSTED: Tuesday, March 27, 2012, 1:55 PM

Thomas Katona, a veteran insurance-software consultant who started professional-liability insurance agency Apogee Insurance Group in 2003 and sold it to Warren Buffett's Berkshire Hathaway five years later, has left his post as president of Apogee to start Agentic Insurance LLC, which will focus on the "complex risk" end of the market, insuring engineers, architects, and non-physician health professionals in Pennsylvania and the New York and Washington areas, Katona told me.

Apogee is in Wayne, Agnetic in King of Prussia. Katona is joined in the new venture by Michael C. Peck, who was Apogee's Senior Account Manager. Katona says Agentic  will focus on "complex risk." He said Apogee doubled in volume and eventually employed 25 during the years he ran it for Berkshire. 

POSTED: Tuesday, March 27, 2012, 12:46 PM

Howard Butcher 4th, professional investor and son of an old Philadelphia business family (he was part of the last generation to run Butcher & Singer when that was an independent Center City brokerage and investment bank, not the current steakhouse), has joined the board of Boise, Idaho-based Alternate Energy Holdings Inc., which is trying to finance a nuclear power plant using technology first developed by Westinghouse in Pittsburgh.

At first sight, AEHI looks pretty inauspicious. The stock trades at 6 cents a share. Boss Donald Gillispie, a onetime Westinghouse nuclear executive, faces a Securities and Exchange Commisison civil complaint (more recently here) that he and a girlfriend who worked at the company paid themselves money they failed to report to shareholders. The company is fighting the complaint.

To the company's supporters, as played out in local-newspaper accounts and Internet chat rooms, it's not a penny stock under a shadow; it's an underdog champion of capitalism, offering the promise of cheap power.

About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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