“Webster sees larger 3Q loss - Providence Business News” plus 4 more

Webster sees larger 3Q loss - Providence Business News
Galleon Case Puts Cozy Valley Culture Under Scrutiny - Private Equity Hub
International visitors on tour of American colleges visit Tufts, speak ... - Tufts Daily
Get a bailout? Now here's a pay cut - Delaware Online
InstaMed Surpasses Five Billion Dollars in Healthcare Payments ... - Biloxi Sun Herald

Webster sees larger 3Q loss - Providence Business News

Posted: 22 Oct 2009 08:19 AM PDT

WATERBURY, Conn. – Webster Financial Corp. (NYSE: WBS), the parent of Webster Bank N.A., Thursday posted a third-quarter net loss of $19.24 million due in part to a provision for credit losses that was almost $40 million more than the year-ago period.

The bank had recorded a $16.52 million net loss in the 2008 third quarter.

In the most recent three-month period, Webster's loss per diluted share totaled 39 cents, worse than the 25 cent per share loss forecast by a consensus of analysts who cover the bank, according to Yahoo! Finance.

Webster recorded $230.40 million in interest and non-interest revenue for the third quarter, down 13.36 percent from the year-ago period's $265.94 million.

The bank touted its growth in deposits in the third quarter, which jumped $426 million to $13.6 billion between June 30 and Sept. 30. Executives also noted that net interest margin improved from 3.04 to 3.18 percent quarter over quarter, although it still fell below the 2008 third quarter margin of 3.32 percent.

Private equity firm Warburg Pincus also recently finalized its $115 million investment in Webster Financial Corp., which includes the purchase of newly issued common stock at $10 a share, as well as buying non-voting, preferred shares and warrants.

"Capital levels continue to improve and are well in excess of all regulatory requirement," James C. Smith, chairman and CEO of Webster Financial, said in a statement. "Earnings before credit provisions increased by 10 percent, and deposit and deposit market share are on the rise. We saw significant improvement in the net interest margin, loan delinquencies were flat for the third consecutive quarter and overall performance was solid considering the challenging environment."

The third quarter's $85 million loan-loss provision represented an 86.81 percent increase over the bank's provisions of $45.5 million in the 2008 third quarter. The bank had also set aside $85 million in the 2009 second quarter.

Meanwhile, total non-performing loans rose again to $340.66 million – an increase of $16.09 million, or 4.96 percent – from $324.57 million at June 30.

Webster Financial Corp. (NYSE: WBS) – a $13.2 billion company based in Waterbury, Conn. – is the holding company for Webster Bank N.A., a financial services company with more than 180 branches, including 10 branches in Rhode Island. Additional information is available at www.WebsterOnline.com.

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Galleon Case Puts Cozy Valley Culture Under Scrutiny - Private Equity Hub

Posted: 22 Oct 2009 08:40 AM PDT

NEW YORK (Reuters) - Silicon Valley may be a long way from Wall Street, but they have at least two things in common: Personal connections matter in the pursuit of wealth and neither is a stranger to financial crime.

Just last week, the Street and the Valley were pulled into the same scandal after regulators charged six people, including Raj Rajaratnam, the billionaire founder of hedge fund Galleon Group, for crimes related to insider trading.

Four of those charged lived in the greater New York area but two, Intel Capital executive Rajiv Goel, and top McKinsey consultant Anil Kumar, were Valley-based. Victims of the insider trading included some of the biggest technology firms in the Valley, including Google Inc and microchip producer Advanced Micro Devices.

Several other companies named in the prosecutors' complaints as key participants in the case, including video conferencing company Polycom Inc, are also based on the West Coast.

And a tiny San Francisco-based investor relations firm, Market Street Partners, was central to the most profitable trade cited by prosecutors in the scheme.

Indeed, the role of a Market Street employee in the case is in some ways the most brazen. Neither the firm nor any of its current employees are implicated in the current probe, a lawyer for the firm said in an emailed statement on Wednesday.

Prosecutors say that the employee tipped off an informant for Rajaratnam about Google's disappointing second-quarter earnings before their release in July 2007, leading the hedge fund to net $9 million in profits from illegal trades.

TOO CLOSE FOR COMFORT

Informal networks are the bedrock of the Valley's business culture. Word-of-mouth travels quickly down the stretch of land in northern California that is home to household tech names like Google and Intel Corp. Relationships are built on trust, business deals are struck in coffee shops.

But the network of entrepreneurs, public company executives, venture capitalists, bankers, public relations firms and others can sometimes get too cozy.

"It's an ecosystem, with all of the different constituents being in the same location," said Mrinal Desai, co-founder of CrossLoop, a startup that connects customers to professional computer support. "All the constituents betting on something are there together and they need to be together to make it work. The moment you start doing favors, it becomes a problem."

Galleon's Rajaratnam built his expertise around technology companies, many of them based in the Valley. He is charged, along with others, of making illegal trades in the stocks of AMD, Sun Microsystems Inc and others.

Only six years ago, the Valley became infamous in financial circles for "Friends of Frank" accounts, after regulators began probing if Wall Street was involved in a tainted IPO game during the height of the tech boom.

These accounts belonged to many tech industry movers and shakers who got handsome returns in exchange for giving their business to investment banker Frank Quattrone's team at Credit Suisse First Boston bank.

A scandal about stock options pricing that ensnared many tech companies in 2006 also showed how herd behavior dominates business in the Valley. Many of the companies who faced government investigations followed very similar compensation practices.

REASSESSING RELATIONS

Google's use of Market Street — a firm very few people outside the investor relations community have heard of — may seem unusual given the size and power of the Internet search and media company, but not too unusual for the fact that it centered on a specific relationship.

Google's current investor relations manager, Maria Shim, is a former Market Street employee. The firm got Google's business after Shim moved to the Internet company in 2006, people with knowledge of the situation told Reuters. Shim did not return a call seeking comment. Google declined to comment.

Google has suspended Market Street's services and is conducting its own investigation, a spokesman said on Wednesday.

Investor relations firms act as go-betweens for companies and Wall Street by helping with earnings reports, arranging roadshows and inviting investors to put in their money.

Most large companies have their own investor relations departments, but their smaller counterparts will often hire an outside firm to help. Silicon Valley, with its scores of startups and private companies keen to go public, is an attractive market for IR services.

Investor relations are horrified by what is alleged to have happened.

"The rules are very clear on this," said Lou Thompson, former president of the National Investor Relations Institute, now a managing director at Kalorama Partners.

"If you're a consultant to a firm you pledge not to provide any inside information until it's made public, and if somebody who's running a hedge fund and kind of cozies up to you, that's too bad, and you just have to say no."

It isn't the first time, though, that the Silicon Valley investor relations business has been in an unwelcome spotlight.

In 1999, authorities accused Lisa Herbst, the owner of a Silicon Valley IR business, of trading in stocks of tech companies she was hired to compose press releases for before they were released to the public, including Adobe Systems Inc.

A year earlier, regulators had made similar allegations against Heidi Flannery, an Oregon-based investor relations consultant, claiming she sold stock in several tech companies while preparing press releases announcing lower-than-expected earnings for the companies.

"Something like this keeps you awake at night," said one person with more than three decades of experience in Bay Area investor relations who asked not to be named because the industry is small. "You can't follow your employees home at night and keep track of what they do."

(Reporting by Anupreeta Das and Emily Chasan; additional reporting by Clare Baldwin in San Francisco; Editing by Martin Howell, Bernard Orr)

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International visitors on tour of American colleges visit Tufts, speak ... - Tufts Daily

Posted: 22 Oct 2009 08:26 AM PDT

A group of twelve university administrators, faculty members and education officials from around the world visited Tufts yesterday to learn about American college life as part of a

The group represented a diverse range of nations, including Angola, Croatia, India, Indonesia, Morocco, Norway, Russia, Slovakia, Sri Lanka and Thailand, as well as the West Bank. Its stop in Boston marks the last leg of a three-week, cross-country tour of American universities.

WorldBoston, a nonprofit organization that facilitates international professional exchange and cultural education, arranged the group's local itinerary. The organization offers several-week-long tours designed to expose young professionals to the American sector of their respective field of work.

At Tufts, the group addressed the theme "Best Practices and Challenges in Enhancing the Student Experience." It examined student resources, the quality of campus life and the role of student government.

The visitors began their day with a tour of Ginn Library led by Ginn's director of library services and information technology, Jeff Kosokoff.

"It's very different than how our libraries back home are," Hanan Bennoudi, a professor of English at Ibn Zohr University in Morocco, said after the tour. "It's very modern, very well-equipped."

Tufts Community Union (TCU) Senate President Brandon Rattiner spoke to the group about the role and operations of student government at Tufts.

"The thing that they were certainly most surprised about was how independent we are financially," said Rattiner, a senior.

The student body's ability to organize autonomously and the Senate's financial independence impressed the visitors, Rattiner added.

Daily Editor-in-Chief Giovanni Russonello, a senior, met with the group in the afternoon to discuss the role of student media at Tufts. Topics of discussion included the Daily's approach to funding, distribution and circulation.

Russonello and the visitors also discussed administrative censorship at universities; the status of Tufts publications stood in stark contrast to those at their universities.

Tatyana Ivanovna Dzhakhanova, the chief of the section of international affairs at Kalmyk State University in Russia, said during the talk that her school's administration must pre-approve all publications.

"The president of our university or the vice president reads everything before it is published," she said. "If he doesn't like it, nobody will see it."

Ragnhild Skaalid, the senior adviser in the Department of Higher Education at the Norwegian Ministry of Education and Research, offered a different perspective, saying that Norwegian universities give their students a lot of freedom in publication.

"I don't think any institution would dare interfering with what the students will say in their newspapers," Skaalid said during the discussion. "We try to teach our students to have critical thinking, so of course they should have their own newspapers and not be influenced by an institution."

In the afternoon, the group spoke with Dean of Student Services Paul Stanton and Dean of Undergraduate Education James Glaser. These meetings addressed the general topics of student resources and campus life.

"The point is that they can take away some ideas to implement back home," Ilya Lozovsky (LA '06), WorldBoston's international visitors program coordinator, told the Daily.

"We just want the visitors to come and hear what resources Tufts has, to see what a typical American university looks like in terms of student life, and to ask whatever questions they have," Lozovsky said.

The State Department's International Visitor Leadership Program (IVLP) sponsored the trip. American embassies located in foreign countries select professionals to participate in IVLP programs; the State Department then organizes their overall schedule depending on their field of expertise.

Embassies choose individuals who are experts in their field and show signs of a promising career, Lozovsky said.

"What they're looking for is a person who's expected to have a successful career and who'll be a good person to introduce to the United States in this intimate way," he said.

The group first met in Washington on Oct. 2, after which members traveled to San Francisco, where they visited the University of California, Berkeley; the University of San Francisco; and Stanford University.

"In San Francisco, it was a multicultural environment," Bennoudi said. "We met people from different fields, and we had the chance to exchange views about culture and religion."

The group then split into three parts to travel to separate universities, namely Mississippi's Jackson State University, the University of Arkansas at Little Rock and Alabama State University.

The group will also study universities' approaches to community and government relations at Boston University and Harvard University today, according to Lozovsky.

Following the conclusion of the tour tomorrow, the visitors will return to their respective home countries.

Dzhakhanova said the amount of student involvement at American universities had impressed her.

"What I liked most in the United States is that people are so creative," she said. "In Russia, most people need to work most of the time, they don't have time to do some extra volunteer [work]."

WorldBoston hopes to provide the educators with an authentic view of American education, according to Lozovsky.

"Our point is not to push any kind of agenda or have any preconceived ideas of what they should take away, just that they have a true to life experience," he said.

Ben Gittleson contributed reporting to this article.

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Get a bailout? Now here's a pay cut - Delaware Online

Posted: 22 Oct 2009 07:29 AM PDT

WASHINGTON -- The Obama administration will order companies that received huge government bailouts last year to slash the salaries of their top executives by an average of 90 percent and cut their total compensation in half, a person familiar with the decision said Wednesday.

The cuts apply to the 25 highest-paid executives at the seven companies that received the most assistance, said the person, who spoke on condition of anonymity because the decision has not been announced. Smaller companies and those that have repaid the bailout money, including Goldman Sachs Group Inc. and JPMorgan Chase & Co., are not affected.

The Treasury is expected to announce the cuts within the next few days.

Kenneth Feinberg, the special master at Treasury appointed to handle compensation issues as part of the government's $700 billion financial bailout package, is making the pay decisions.

The seven companies are Bank of America, American International Group, Citigroup, General Motors, GMAC, Chrysler and Chrysler Financial.

It was unclear exactly how much the executives would be allowed to make, or how that would be determined.

Of the group, Bank of America and Citigroup have significant operations in Delaware, though only Bank of America is known to have top executives based here.

The president of the bank's Wilmington-based Global Card Services division is Ric Struthers, who is among the top six executives at the bank. His salary is not required to be disclosed, however -- only the salaries of the CEO, CFO and three other most highly compensated executives of publicly traded companies are revealed.

According to the Morningstar research firm, the other divisional presidents at Bank of America received annual salaries ranging from $719,000 to $800,000 in 2007, and total compensation from $7.4 million to $10.1 million.

In 2008, Bruce L. Hammonds was paid $800,000 in base salary as head of card operations.

Asked how deeply the cuts might impact Delaware executives, Bank of America spokesman Scott Silvestri said the bank had not been informed of any official actions and had no comment.

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InstaMed Surpasses Five Billion Dollars in Healthcare Payments ... - Biloxi Sun Herald

Posted: 22 Oct 2009 08:11 AM PDT

PHILADELPHIA, Oct. 22 /PRNewswire/ -- InstaMed announced today that it has processed over five billion dollars in healthcare payments since its inception five years ago. Just one year ago, the company surpassed the one billion dollar mark. In the last five years, InstaMed has established itself as a pioneer and leader in the emerging healthcare payments market segment, creating innovative solutions to simplify the healthcare payment process. By combining the functions of a healthcare clearinghouse and a payment processor, InstaMed delivers one source and one end to end process for healthcare payments, which include eligibility, patient responsibility estimation, claim submission, remittance, payer payments and patient payments.

Through its channel partner network, InstaMed currently delivers solutions to over 27,000 active users in all fifty states, a number that has grown by 150% in the past year. In this same time period, the company's healthcare payments volume has increased by 400%.

"In the past five years, we've made it easier for patients and payers to pay, and for healthcare providers of all sizes to get paid. We are also beginning to see the rapid growth of electronic payer to provider payments within our payer market segment -- a market that represents over one trillion dollars a year in volume," stated Bill Marvin, President and CEO of InstaMed. "I am pleased with the company's ability to scale at such a rapid pace, while setting industry leading service levels and quality standards in support of our partners and customers that include fifty of the largest healthcare entities in the country. Our growth and performance is a combination of great solutions, great people, great channel partners and strong support from our board."

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