ASB touts securities backed by mortgages
ASB Capital Management, the Washington-based asset management unit of MNC Financial Inc., has two words of investment advice: mortgage-backed securities (or is that three words?).
Long-term interest rates are likely to continue falling, says ASB's chief economist, Tom Carpenter, who touted the securities' virtues at the Center Club recently. That's partly because of a $3.3 trillion pool of short-term savings and money-market funds. Bit by bit, the owners of this "financial reservoir" are continuing to buy both stocks and longer-term fixed-income securities.
Robert Wasilewski, managing director for fixed-income, says he's increasing his mortgage-backed investments from $1.2 billion to more than $1.6 billion, and he's buying longer-term securities in the belief that long-term rates will either stabilize or decline.
And even when rates rise, as they've started to do in the last few weeks, mortgage-backed securities outperform the market, Mr. Wasilewski said.
First United completes buyout negotiations
First United Corp., the Oakland-based parent of First United National Bank & Trust, said this week that it has finished negotiating a previously announced buyout of Myersville-based HomeTown Bancorp, and the two companies have signed a definitive merger agreement.
First United will exchange between 7.75 and eight of its shares for each of the 45,000 HomeTown shares, or 250 percent of HomeTown's equity. Based on the recent price of $37.30 for First United's thinly traded shares, that would give HomeTown's stockholders about $292 a share, or a total of $13.15 million.
That's about $10 a share higher than the price the two companies announced when they signed a letter of intent in March. HomeTown's primary subsidiary, Myersville Bank, will retain its name and operate as an independent unit of First United.
"Myersville Bank is a strong community-oriented bank," First United Chairman Richard G. Stanton said in a statement. "Given its philosophy and geographic location it makes a natural complement to our banking network." That network has 18 branches and $361.5 million in assets.
Price director pleads for more SEC funding
File this under "man bites dog": A top official with Baltimore mutual fund company T. Rowe Price Associates Inc. went before Congress last week to plead for more funding for SEC regulation of the industry.
Of course, the type of regulation that Managing Director James S. Riepe is most concerned about is the SEC's ability to review new fund prospectuses, to process requests quickly for exemption from rules and to expand its regulatory focus beyond the 100 largest mutual fund companies, he told a Senate Banking, Housing and Urban Affairs subcommittee.
Mr. Riepe also asked Congress to repeal a loophole that allows bank and insurance company mutual funds to avoid mailing prospectuses "containing the information necessary to make informed investment decisions. . . ."
But in the next breath, Mr. Riepe endorsed the SEC's plan to allow fund companies to include summary prospectuses in their printed ads, in lieu of having to mail prospectuses before investments can be made. The summaries, he argued, "would provide a more focused presentation of all information that an investor needs to know before purchasing mutual funds shares."
Brokers less respectful of women, survey finds
Here's a flash: Money magazine reports this week that stockbrokers treat women less respectfully than men. They tell men about a wider range of investments than women; they explain investments to men more often; and they try harder to sign men up as clients, the magazine found.
But -- figure this out -- women reported being more satisfied with their brokers. Maybe it's because brokers treat women more courteously than they treat men, according to Money.