Burlington-based MidCarolina Financial Corp., parent company of MidCarolina Bank, on Friday reported net income of $721,000, or 13 cents per share, during the second quarter. That’s up a little more than 1 percent from earnings of $713,000, or 12 cents per share, during the same period a year ago.
Total assets rose to $561 million from $549 million last year. Nonperforming assets rose to 2.65 percent of total assets, up from 1.27 percent during the second quarter a year ago.
“The second quarter of 2010 showed quarterly earnings improvement over the past several quarters. We are pleased with that trend, as well as our strong capital position and efficiency trends,” said Charles T no fax payday loan. Canaday Jr., president and CEO of MidCarolina. “We have focused on these areas given the ongoing financial and economic uncertainties, both in our local markets and beyond.”
Canaday noted that some housing and commercial real estate borrowers continue to have difficulty servicing their debt. The company increased its allowance for loan losses to $8.5 million in the second quarter, up 32 percent from $6.5 million during the year prior.
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The University of Texas said it won’t join the Pacific-10 Conference, dealing a blow to efforts to grow conference influence and revenue.
Texas said Monday it will say in the Big 12 Conference, USA Today reported.
The news appears to dampen expectations of a seismic shift in the college sports landscape. After Nebraska officially left the Big 12 last week, the Texas Longhorns, Oklahoma, Oklahoma State, Texas Tech and Texas A&M were expected to finalize plans to join the Pac-10 and create a 16-team conference.
The University of Colorado last week said it will join the Pac-10, leaving the Big 12 Conference.
The Pacific-10 seeks to grow revenues in an increasingly cutthroat world of big-time college sports bad credit payday advance.
Although a winner with its teams on the field, the conference is a laggard in revenues. The Pac-10 reported $96 million in revenue last year. That trails all but one of the major collegiate conferences, despite having prominent schools like the University of California, Los Angeles; University of Southern California; Cal and Stanford, which have traditions of football and basketball success.
Recently the Pac-10 hired Creative Artists Agency to advise on expansion and on upcoming broadcast negotiations. The conference’s agreements with ESPN and Fox expire after the 2011-12 school year.
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Colorado legislators on Thursday changed a bill cracking down on payday lenders to allow the businesses to make more money from their loans, but opponents said that the amendment did not do enough to keep a large number of those shops from closing their doors.
House Bill 1351, sponsored by Rep. Mark Ferrandino, D-Denver, would limit the amount of interest that payday lenders can make off of loans. It was approved on a 7-4 vote by the House Judiciary Committee, with Democrats backing it and Republicans opposing it, and is headed next for debate on the House floor.
Under current law, payday lenders can charge a finance charge of $20 per $100 on the first $300 loaned and $7.50 per hundred dollars after that until the loan has reached its maximum $500 limit. The average payday loan in 2008 was $391, with an average annual interest rate of 317 percent, according to the nonpartisan Colorado Legislative Council.
HB 1351 originally proposed capping the annual percentage rate on each loan at 36 percent. However, Ferrandino amended the bill Thursday to increase that number to 45 percent APR and added a provision allowing a loan-origination fee of $10 per $100 lent for the first loan made to a person in any 12-month period.
The changes came after payday lenders, who made more than $566 million in loans in 2008, complained that the reduction in profits they would be able to make would shut down many of their businesses and put thousands of people out of work during an economic downturn. A number of Democrats have spoken against the potential effects of the bill as well.
Under current law, Ferrandino argued, lenders can make $75 off of a two-week loan, while his new bill would reduce that amount to $58.63, much higher than the $6.90 they could have made under the original HB 1351. The goal of his bill, he said, is to stop lenders from making large amounts off of future loans that keep borrowers in a perpetual cycle of debt.
"If people are using this responsibly for short-term loans, they‚re making close to what they're making before," Ferrandino said.
However, Rep. Steve King, R-Grand Junction, said that without that income on future loans, lenders will lose large amounts of money and be forced to shut their doors.
"We‚re talking about $1.75 on a $100 loan," King said of the change from 36 percent to 45 percent annual interest that lenders can charge. "It's still going to kill jobs. It's still going to cause businesses to go out of business."
The bill also would require the question to be referred to voters on the November ballot before the law were to take effect.
When radio was invented in the late nineteenth century by the likes of Marconi, Edison, and Tesla, government and industry faced a conundrum. Who would own the limited band of electromagnetic frequencies that made this new invention possible?
By the 1920s the decision was made that the public would own the airwaves, with the government leasing frequencies to companies that were required to follow certain rules. A century later this system isn’t perfect, but it does bring us every day everything from text messages to Youtube, to the latest hits from Lady Gaga.
Society now faces a similar ownership predicament with who owns human genes — another kind of spectrum that always existed, but was unsuspected until we discovered it. This time, however, the story is different. Instead of a public ownership model granting licenses, the U.S. Patent Office has spent the last twenty years awarding patents to companies, universities and others who discover genes — with over 20% of human genes already claimed.
Controversial for decades, the validity of issuing these patents has erupted again in a case brought last year by the American Civil Liberties Union against Myriad Genetics (MYGN), which holds patents on two genes that in a mutated form can cause a person to be high risk for breast cancer. According to the ACLU and a long list of plaintiffs that includes research and patient advocacy groups, the U.S. Patent Office (also listed as a defendant) was wrong to issue these patents — and by extension all genetic patents.
"Genes are naturally occurring entities, like air or gravity," says ACLU attorney Chris Hansen, "and therefore under the law they are ineligible for patenting."
The ACLU also claims that Myriad’s patents block access to the genes by researchers and patients who want a second opinion on breast cancer results, but are barred by the exclusivity of the Myriad patent. They criticize Myriad’s access prices, which can range as high as $3,000.
Myriad General Counsel Richard Marsh counters that Myriad and researchers working at the University of Utah — which co-own the patents, and are co-defendants in the suit — did discover something that exists outside of nature. By extracting the genes from the human body, the company claimed, and the U.S. Patent Office agreed, that it had created an isolated sequence that is patentable, whereas the sequence as it occurs inside a person is not — a contention being directly challenged by ACLU.
Marsh also insists that researchers and patients have benefited from Myriad patenting the BRCA I and BRCA II genes and certain mutations within these genes that are linked to breast and ovarian cancer. He also defended the company’s pricing, saying that it is the essence of patent protection — that Myriad can charge what it likes on something it has created, until the patent lapses and the gene enters the public domain.
More critically, Myriad and others in the pharmaceutical industry claim that without patent protections, no one would invest in developing products based on genetic markers for disease. "Without patents, who is going to do the work and spend the money to make this product accessible to people?" asks Marsh cheapest personal loan rates.
Both sides are now waiting for federal Judge Robert Sweet to rule on whether or not the case will go to trial in the U.S. District Court of the Southern District of New York. Last month Sweet refused to dismiss the case in a motion filed by Myriad, suggesting that he may want to hear the case, although no one knows for sure.
"If not now, it will have to be dealt with later, because there are core issues at stake that impact the entire pharmaceutical industry," says Robert Cook-Deegan, Director of the Center for Genome Ethics, Law & Policy at Duke University.
Which brings us back to the invention of the radio and the electromagnetic spectrum — and potential solutions that demand some imagination and creativity beyond the tried and true pharma track of slapping patents on everything in sight.
One idea would be to turn genetic discoveries — many of which are initially found using taxpayer funds — into publicly owned entities that could be licensed to companies like frequencies on the radio dial. Licensees would be required to follow certain rules such as allowing researchers and patients access to DNA sequences, and requiring that pricing be in line with costs.
A variation of this model has been used for decades to govern the extraction of natural resources such as oil and gold from public lands. Businesses bid on and receive licenses that allow them to extract these resources (and to earn back investments) for a period of time if they follow certain rules.
Yet another idea comes from a 2004 global agricultural pact — The International Treaty on Plant Genetic Resources for Food and Agriculture — ratified by the United States and other nations that allows patent holders to own a genetic discovery for modifying plants, but not to block others from licensing and using it. Last month, an advisory committee at the Department of Health and Human services issued recommendations that patents on genetic diagnostic tests also be modified to allow greater access by researchers and patients.
Ultimately, the tussle over who owns genes may be decided not by government agencies, lawyers, or judges, but by advancements in science. Already the notion that one gene marker can best determine a person’s risk for a common disease is becoming outmoded. The latest science suggests that risk factors for maladies such as diabetes are increased by the interaction of dozens — or even hundreds — of genes and other molecular structures in the body. A legal system that does not retain flexibility in incorporating this rapidly moving science will cause confusion down the line.
Finding clarity in the issue of who owns our DNA will take time, and will be far more complex than, say, a simple frequency on a radio carrying a song by Lady Gaga. Yet it’s crucial in this new age of genomics and molecular biology that we are as clever about how we implement new discoveries as the discoveries themselves.
Google Inc. has again tinkered with its new Buzz social networking service in the face of continued privacy concerns.
The company (NASDAQ:GOOG) said on a blog Saturday that it will stop automaticly subscribing users to follow the postings of their close Gmail contacts. Now it will only suggest users follow people from their Gmail contacts and leave it up them to do so.
Privacy advocates criticized Google for this automatic following feature, saying it spread the names and contact information of people around without their permission.
This is the second time in Buzz's first week that Google has had to adjust the service in the face of negative postings on Twitter, blogs and on the Buzz service itself business card. On Thursday, the company made it easier for users to keep photos and other information from public view.
"We quickly realized that we didn't get everything quite right," product manager Todd Jackson wrote on Saturday's blog posting. "We're very sorry for the concern we've caused and have been working hard ever since to improve things based on your feedback. We'll continue to do so."
Thirteen of Arizona’s 21 billion-dollar public companies saw their stock prices move up during the fourth quarter.
Seven of the companies posted double-digit gains, with Clear Channel Outdoor leading the pack at 58 percent, according to the Phoenix Business Journal’s analysis of prices from Sept. 30 through 30 through Dec. 18.
Penny stock Mesa Air Group mirrored that performance with a 58 percent decline to lead the group of eight companies with a drop in price per share over the quarter.
Over the same period the Dow Jones Industrial Average gained 6.4 percent and the Nasdaq Composite moved up 4.2 percent.
The Arizona group did better when price changed is measured over all of 2009, but all but four of the stocks still lag from the end of 2007. Click here for the 2009 wrapup and here for a two-year look at local stocks.
Estate planner Richard Behrendt helped his client make $5 million loans to each of his children this year, avoiding gift taxes of 45 percent and saving the kids as much as $837,000 apiece in interest.
Rates for so-called intra-family loans have declined as much as 53 percent since 2008. “The timing of it was clearly tied to the rock bottom of these rates,” said Behrendt, who works for Robert W. Baird & Co., based in Milwaukee, Wisconsin.
The loans may be the perfect holiday gift to help relatives this year, according to Carol Kroch, head of wealth and financial planning at Wilmington, Delaware-based Wilmington Trust. For wealthy taxpayers, they can be used for estate planning purposes, since gains earned will be free of estate and gift taxes.
That’s because low interest rates and depressed asset values mean there’s a greater possibility that investments purchased with an intra-family loan, such as stock, will appreciate more than the loan’s cost, Kroch said.
The rate for an intra-family loan made in January 2010 for less than three years is 0.57 percent. The rate is 2.45 percent for a loan of three years to nine years and 4.11 percent for a loan of nine years or more, according to the Internal Revenue Service, which sets the rates monthly. That compares with an average rate of 10.55 percent for a personal bank loan in the New York metro area and 12.51 percent for a credit-union loan, based on data from Bankrate.com.
“The chances are they are going to go up, the only question is how fast or how soon,” said Bill Fleming, managing director of New York-based PricewaterhouseCoopers’s Private Company Services Group, referring to rates for intra-family loans.
Tax Savings
Behrendt’s client, who has a net worth of $100 million, loaned each of his three children $5 million for nine years. The children invested the money in a balanced portfolio seeking at least a 5 percent return, said Behrendt, a former estate tax attorney for the IRS.
Any amount above the 1.65 interest rate, which was the February rate, should pass to the client’s children free of estate and gift taxes, he said. The Standard & Poor’s 500 Index has increased 36 percent since February as of yesterday.
The borrowers also saved on interest costs because of the low rates. Each will owe $82,500 in interest annually, compared with $175,500 if the loan had been made in February 2008 when the rate was 3.51 percent.
Current federal law taxes estates exceeding $3.5 million for an individual or $7 million for a married couple at as much as 45 percent. Any gift to an individual of more than $13,000 annually may also be taxed as much as 45 percent with a $1 million lifetime exclusion per donor, according to the IRS.
Estate Tax
The estate tax is scheduled to expire for a year on Jan. 1 under the provisions of a tax-cut bill enacted in 2001. It comes back in 2011, taxing estates valued at more than $1 million as much as 55 percent. Senate Finance Committee Chairman Max Baucus, Democrat of Montana, has vowed to extend the estate tax in 2010 retroactively.
Lenders who are subject to the estate tax can use the loans to reduce the value of their estates because the appreciation of any investment made with the loan above the IRS rate accrues outside of the lender’s estate, said Larry Richman, chair of private wealth services at Neal, Gerber & Eisenberg LLP in Chicago.
Taxpayers with family businesses may also want to consider intra-family loans to help with the sale of the business to family members, according to David Kron, a partner in the Fort Lauderdale office of law firm Ruden McClosky.
Parents can loan their children money to buy the business and the children can repay using profits from the firm. The future appreciation and any income of the business beyond the loan amount are then considered part of the children’s, not the parents’, estate, Kron said.
‘Low-Tech’ Tool
Intra-family loans are a “low-tech” way to give money to family members because they’re easy to set up and are appropriate for anyone regardless of net worth, said Deborah L. Jacobs, author of “Estate Planning Smarts: A Practical, User- Friendly, Action-Oriented Guide,” which was published this month.
Family members should be aware the loans must be repaid in full with interest at the rate specified by the IRS. If the borrower doesn’t repay, it may be considered a gift subject to the gift tax, said Jacobs, who is based in New York.
Lenders should also consider the income tax they’ll owe on the interest received with repayment of the loan, said Kron.
‘Thanksgiving Firecracker’
Loaning money to family members may create relationship issues, said Dan Deighan of Melbourne, Florida-based Deighan Financial Advisors Inc.
“It’s like throwing a firecracker on the Thanksgiving dinner table when you bring money issues into the family dynamic,” Deighan said.
Borrowers can get “sloppy with repayments,” which is why setting up an automatic bank transfer for payments is recommended, said Fleming of PricewaterhouseCoopers.
Don Albritton, a 61-year-old executive in Longwood, Florida, gave his son $260,000 to buy a house through a 30-year intra-family loan four years ago. Albritton ended up taking the house back after his son was unable to sell it without taking a loss. Home prices have declined 17 percent since January 2005, according to the S&P/Case-Shiller index for 20 metropolitan areas.
“I’m not discouraged,” Albritton said. “I’m getting ready to make him another loan now.”
The Raleigh-Cary metro area was one of the few regions in the country to show job growth in the third quarter, signaling the area may be among the better performers pulling out of recession, according to a report released Tuesday by the Brookings Institution.
Unemployment in Raleigh-Cary was 8.6 percent in the third quarter, a 0.1 percent improvement compared to the second quarter. The modest growth is better than most of the top 100 metros evaluated by the Washington, D.C., think tank. Just 13 of the top 100 metros experienced job growth in the third quarter. The U.S. average for the top 100 metros was 9.6 percent unemployment, a 0.5 percent increase in unemployment in the third quarter compared to the second quarter.
Raleigh-Cary was also one of just 10 metro areas to show faster growth in jobs and gross metropolitan product in the third quarter compared to the second quarter, according to Brookings. Raleigh-Cary GMP increased by 1.1 percent in the third quarter compared to the second quarter instant payday loan.
Nationally, gross domestic product increased at a 2.8 percent annual rate in the third quarter. That was the first increase after four consecutive quarters of contraction. Brookings said the growth, along with other indicators such as increasing housing prices, are a sign that recovery is under way.
But Brookings cautioned that the recovery “seems fragile.”
“The output increase may have resulted largely from the replenishment of manufacturing inventories and from temporary federal policies: the ‘cash-for-clunkers’ program, the first-time home buyer tax credit, and the American Recovery and Reinvestment Act’s economic stimulus,” the report states. “As the effects of these policies recede, the recovery could slow or give way to yet another recession or a prolonged period of economic stagnation.”
LONDON–In a move that could help improve relations between Google Inc. and the media industry, the Internet search company is offering publishers a way to build more solid "pay walls" around their online stories while still appearing in search results.
In an official blog post Tuesday, Google said it will let publishers limit the number of restricted articles that readers can get for free through its search engine.
The change could remove one significant hurdle publishers face as they contemplate charging readers online. Many newspapers are considering such fees because online advertising on free sites hasn't offset the precipitous decline in print ad revenue that has come with the recession and competition from the Web.
The Wall Street Journal is perhaps the best example of how the new tool could help.
The newspaper charges for access to most articles on its Web site, but its pay wall is "leaky." Readers can grab the first sentence from a preview of the story, punch it in to Google and access the full story in the search results.
The Journal could simply block Google from indexing its stories, but that would cut traffic to its site significantly. Less traffic means less ad revenue.
The problem has infuriated executives at News Corp., which owns the Journal.
News Corp. Chairman Rupert Murdoch told a conference organized by the U.S. Federal Trade Commission on Tuesday that media companies should charge for content and stop news aggregators such as Google from "feeding off the hard-earned efforts and investments of others.''
The change to Google's "First Click Free" program would allow publishers to limit the number of paid articles a reader could access through its search engine to five per day.
That could assuage the anger of media titans like Murdoch, allowing news outlets to stay relevant by appearing in search results while still trying to wring fees from readers.
A News Corp. spokesman declined comment Wednesday.
In Google's blog post, Josh Cohen, senior business product manager, stressed that publishers and Google could coexist.
"After all, whether you're offering your content for free or selling it, it's crucial that people find it." he said. "Google can help with that.''
Cohen said that Google will also begin indexing and treating as “free" any preview pages – usually the headline and first few paragraphs of a story – from subscription Web sites. People using Google would then see the same content that would be shown free to a user of the media site. The stories would be labeled as “subscription" in Google News.
"The ranking of these articles will be subject to the same criteria as all sites in Google, whether paid or free," Cohen said. "Paid content may not do as well as free options, but that is not a decision we make based on whether or not it's free. It's simply based on the popularity of the content with users and other sites that link to it.''
Gulf markets dropped again on Tuesday, taking little comfort from Dubai World’s plan to restructure about $26 billion of debt and despite reassurances on economic resilience from the rulers of Abu Dhabi and Dubai.
Dubai stocks fell a further 5.6 percent and the Abu Dhabi bourse lost 3.6 percent on their second trading day since Dubai last week asked creditors of Dubai World and its property arm Nakheel for a six-month delay on debt repayments. Qatar’s bourse was also more than 8 percent lower.
State-controlled Dubai World, which led the emirate’s transformation into a regional hub for finance, investment and tourism, unveiled details late on Monday of the restructuring and which parts of its empire were affected. The process will focus on $26 billion of debt owed by its main property firms, Nakheel and Limitless.
Dubai World said it had appointed Moelis & Co, the investment bank created by former UBS president Ken Moelis, to advise on the restructuring while Rothschild would continue to be its investment adviser.
Global markets took a pounding when news broke last week that Dubai World was unable to pay its debts, although on Tuesday, Asian and European stocks were up, following the lead from Wall Street overnight as fears of contagion eased.
Dubai’s ruler Sheikh Mohammed bin Rashid al-Maktoum, who is also the United Arab Emirates’ vice president, prime minister and defense minister, said the global reaction had shown “a lack of understanding.”
“We have the determination and will power to face all challenges, including the ill-intentioned media challenges,” Sheikh Mohammed said, according to a statement from his office.
John Sfakianakis, chief economist at Banque Saudi Fransi-Credit Agricole Group in Riyadh, said the Dubai ruler’s remarks “although very broad, should be welcomed by global markets at a time when they are thirsty for clarity, reassurance and information.”
Sheikh Khalifa bin Zayed al-Nahayan, president of the UAE and ruler of Abu Dhabi, said the UAE economy was showing signs of gradual growth in the fourth quarter.
Dubai’s troubles could shift political power in the UAE, a seven-emirate federation celebrating 38 years of unity on Wednesday, toward oil-producing Abu Dhabi and away from its exuberant neighbor.
The Dubai World group, whose total liabilities are estimated at nearly $60 billion, said the restructuring would exclude “financially stable” units such as Infinity World Holding, Istithmar World and Ports & Free Zone World, which includes DP World, Economic Zones World, P&O Ferries and Jebel Ali Free Zone.
Dubai World would look at options for cutting its debt, including asset sales, it added.
But the group may not be able to keep revenue-generating assets such as port operator DP World and Istithmar’s 2.7 percent stake in Standard Chartered, while selling its battered property firms.
“I don’t think they’re in a position to choose,” Khuram Maqsood, managing director of Emirates Capital and a former director at Istithmar.
“Dubai World desperately needs cash. Everything is for sale. I don’t think anything is sacred in the current environment.”
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