Trends in Mobile Banking

by Kevin Lynch 19. May 2010

I recently attended an eCommerce conference for financial institutions called Net.Finance. Over the two day period, there were two consistent themes across most of the presentations. They were the growth of mobile as a servicing and delivery channel and the use of social media by banks. I'm going to focus todays' post on mobile.

Over a year ago, we began offering an iPhone Branch/ATM Finder application, one of the first in the country. Even with the limited functionality, we've been pleasantly surprised to see over 1,500 downloads. This simple application confirmed that there is definitely a demand for these services. And why not? Over 78% of the US Consumer market, close to 242 million people, are expected to have mobile access by the end of 2010. Of those mobile users, 1 in 5 will be using the so-called "smart phones" like the iPhone and Android. When we launched the iPhone app, we were one of a handful of banks. Now, there are over 78 financial institutions offering 86 mobile apps for iPhone users.

As we follow these national trends, we realize that our customer and prospect needs are changing as well. So in the very near future, we'll be rolling out a mobile solution that will meet the needs of our community. We are very excited about this solution. Stay tuned for more in the months ahead.

Important Message for Participants of the 1st Mariner Stock Offering

by Admin 3. May 2010

We have been receiving a lot of calls from those who took advantage of our most recent stock offering and are here to help clear up any confusion you may have.

Please note that all of the shares issued in our recent stock offering were issued via Book Entry in the Direct Registration System (DRS).  What is DRS, you ask?  DRS is a method of recording shares of stock in book-entry form. Book-entry means the company's transfer agent, American Stock Transfer & Trust Company, maintains your shares on your behalf without the need for physical share certificates. Shares held in un-certificated book-entry form have the same rights and privileges as shares held in certificate form.  Shareholders statements were mailed to all participants in the offering by our stock transfer agent, American Stock Transfer. All shareholders participating in the offering should have received their statements by now.

Should you wish to have your shares added to your existing brokerage account, you should instruct your broker to electronically pick up the shares off of the Direct Registration System (DRS).  All brokers have access to this system and will be able to do this easily – This is one of the great benefits of DRS!

Below are some frequently asked questions regarding the DRS:

Q: What are the benefits of DRS

A: Holding shares in book-entry form through DRS has the following benefits

  • The convenience and security of book-entry shares
  • Reduces the risks, time and costs associated with storing paper share certificates and replacing lost or  stolen certificates
  • Enables electronic share transactions between your  broker/dealer and the company's transfer agent
  • Reduces the overall administrative costs to the company and its shareholders.

Q: How do I transfer my shares to or from my brokerage account or sell my shares?

A: In order to sell shares held in your DRS account you will need to have a brokerage account, which you may open (if you don't already have one) at the broker of your choosing. If you wish to transfer your shares to your brokerage account, whether or not you plan to sell your shares, contact your broker and provide him or her with your DRS account information (which appears on the DSR Transaction Advice you will receive from the company's transfer agent when you become a participant in DRS). Your broker will then electronically initiate the transfer of your book-entry shares based on your instructions.

Q: How do I transfer shares held through DRS to a new owner?

A: You may transfer shares to a new owner by contacting the company's transfer agent. Your instruction must include a Medallion Signature Guarantee. More detailed instructions on transfer requirements are available at www.amstock.com/shareholder/sh_transfinst.asp.

Q: What documents will I receive showing my shares held through DRS

A: You will receive a DRS Transaction Advice Form from the company's transfer agent following each transaction involving your shares held through DRS.

Q: What will it cost me to hold my shares through DRS?

A: You will not be charged for holding your shares of stock through DRS. You should contact your brokerage firm to determine its fees, if any, if you transfer your shares to or sell your shares through your brokerage account.

Q: How do I know my book-entry shares are safe and cannot be transferred without my consent?

A: Your written consent with a Medallion Signature Guarantee is required by American Stock Transfer & Trust Company to transfer shares to any third-party other than your broker. If you choose to supply a broker with your DRS account information your broker is responsible for obtaining instructions and documentation for any transfer or sale.

Q: What is a Medallion Signature Guarantee and how do I obtain one?

A: A Medallion Signature Guarantee is a statement (stamp and signature) given by a financial institution such as a commercial bank, credit union, brokerage firm, etc., that is a member of the Securities Transfer Association  Medallion Program (STAMP), New York Stock Exchange Program or Stock Exchange Medallion Program (SEMP, MSP). The Medallion Program is not a notarization. To obtain a Medallion Signature Guarantee please visit a financial institution that participates in the Medallion Program.

Q: How do I contact the company's transfer agent?

A: The company's transfer agent may be reached at:

American Stock Transfer & Trust Company

Shareholder Services
6201 15th Avenue
Brooklyn, NY 11219
800-937-5449 (Toll-free)
718-921-8124 (World-wide)

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Recovery Revs Up

by Anirban Basu 13. April 2010

Economy Expanding as Predicted, but Will the Run Last?

The nation has strung together two consecutive quarters of growth with 2009:Q4 annualized growth registering 5.6 percent (third estimate).  Employment is now expanding and the unemployment rate has been declining in recent months.  A close inspection of fourth quarter GDP reveals a promising shift away from pure dependence upon government spending to a broadening economic expansion.  Of central importance is the ongoing rebound in retail sales and in consumer confidence.  Year-over-year sales growth is now positive, though the comparison months were of course in the immediate aftermath of the financial crisis that began in September 2008.

Sage does not anticipate a brisk recovery as tight credit, an unsettled and unsettling federal policymaking environment, subdued expansion in various parts of the world including much of Europe, double-digit or near double-digit unemployment rates for months to come and the expectation that policy support for the economy will begin to wane within the next twelve months.

In fact, policy support will begin to wane well before the next twelve months.  As of this writing, Federal Reserve purchases of collateralized mortgage backed securities have been over for two days, which implies that the era of ultra-low mortgages may soon be coming to an end.  Moreover, rumors continue to circle both Freddie and Fannie, and with the federal guarantee of their balance sheets now explicit as opposed to implicit, there will likely be calls for Freddie and Fannie to slow down their purchases of mortgages.

One of the other reasons to believe in the sustainability of the nation’s nascent but weak recovery is the recent performance of financial markets.  On March 9, 2009, the Dow Jones Industrial Average reached a cyclical low 6,547.05 after dipping to an intraday low of 6,469.95.  Since that time, stock prices have enjoyed a roughly 75 percent retracement, replenishing wealth and signaling confidence in corporate earnings.

During the third quarter, roughly 5 in 6 large U.S. companies reported earnings that exceeded expectations.  Moreover, if U.S. stocks were valued at 15 times their expected 2011 earnings by the end of 2010, the S&P Index would be approaching 1,365, about 16 percent higher than the level at the time of this writing (1,178; April 1st, 2010 market close).  This implies even more wealth generation, which could be enough to allow for sustained economic momentum into and through 2011 despite expectations of rising interest rates and taxes at that time.  Fourth quarter GDP report was also consistent with the notion of rising profits and that may be just enough to keep the recovery going into and through 2011.

In many ways the recovery that began during the summer of 2009 is quite ordinary.  As with typical recoveries, financial markets first began to recover followed by GDP growth.    Now comes the final big piece in the puzzle:  job growth.

In January the nation gained 14,000 jobs (revised estimate) and then lost almost precisely that number of jobs one month later.  In March, the nation added 162,000, the first six-digit increase for the U.S. economy since November 2007.  Through March, unemployment has remained steady at 9.7 percent and may fall during the months ahead due to Census hiring.  However, Sage continues to expect that once Census jobs dissipate, unemployment will begin to expand again as more Americans rejoin the labor force.  Despite the recent employment momentum, underemployment issues remain elevated and there has been little sign of progress along that dimension.

Exhibit 1: National Nonfarm Employment Net Change, February 2006 – March2010

Looking Ahead

The last few months have been surprisingly good.  As of this writing, the Dow Jones has rebounded to around 10,900 on the Dow Jones Industrial Average (the Dow began the year at 10,430) and the S&P 500 at around 1,170, up from a 52-week low of 783.  That represents a 52-week retracement approaching 50 percent for the S&P.

Perhaps the most positive indicator of all is the recent expansion in exports, though exports dipped modestly in January.  Most economists seem to agree that massive growth in U.S. exports is required if the nation hopes to maintain current living standards or to improve upon them.  Our concerns revolve largely around the second half of 2010 and 2011.  As stimulus impact ebbs as interest rates rise and as past tax cuts lapse, the economy will become increasingly vulnerable.

Indeed, as we move through 2010, Sage is looking to a number of key economic variables to determine its 2011 forecast.  The first is the performance of financial markets, which have recently done more than a passable job in predicting the trajectory of the economy.  The Dow Jones

Industrial Average peaked at 14,164.53 on October 9th, 2007 before beginning what was then a slow, steady descent.  Two months later, the economy was in recession.  More recently, the market has been trending higher on low volatility.  Perceptions of risk have abated massively in recent weeks and if economic data continue to be strong and largely unidirectional the market liftoff could continue.

The second set of indicators relates to business investment.  Sage is particularly keen to observe increases in business investment that do not appear directly related to government spending.  Industries that appear best positioned to ramp up investment include exporters and energy suppliers, though still tight business credit will serve to limit the pace of investment expansion.

A third indicator will be bank lending.  As corporate profits expand and help repair balance sheets, Sage expects that bank purse strings will loosen.  Higher long-term interest rates, which are anticipated as the economy marches toward 2011, should help induce more rapid velocity of money.



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