Online Banking Security Tips: General PC Security

By Shawn Cleveland, Chief Operating Officer & Compliance Officer, scleveland@bnccorp.com

Maintain active and up-to-date antivirus protection provided by a reputable vendor. Schedule regular scans of your computer in addition to real-time scanning.

Update your software frequently to ensure you have the latest security patches. This includes your computer’s operating system and other installed software (e.g. Web Browsers, Adobe Flash Player, Adobe Reader, Java, Microsoft Office, etc.).

Automate software updates, when the software supports it, to ensure it’s not overlooked.

If you suspect your computer is infected with malware, discontinue using it for banking, shopping, or other activities involving sensitive information. Use security software and/or professional help to find and remove malware.

Use firewalls on your local network to add another layer of protection for all the devices that connect through the firewall (e.g. PCs, smart phones, and tablets).

Require a password to gain access. Log off or lock your computer when not in use.

Use a cable lock to physically secure laptops, when the device is stored in an untrusted location.

When to Lease or Buy Your Own Building

By Ward Hickey, Senior Vice President, whickey@bncbank.net

Lease or Buy Building

As businesses expand they are sometimes faced with the dilemma of running out of operating space for their company and may question whether they should lease a larger space or purchase a building.

There are many advantages for buying commercial real estate. Many business owners purchase their building to avoid the rising rents, as an investment, or to make their businesses look more attractive to prospective buyers. When thinking about purchasing you should immediately evaluate the benefits versus the cost. The benefits include depreciation, interest, and appreciation of value which enables you to profitably sell, trade or refinance the building in the future. If you run a family-owned business, owning a building may be a good investment for the future.

While there are advantages to owning a commercial building, it may also have several drawbacks. For example, your company may experience a cash drain if the building needs to be renovated. You will also need to handle the ownership issues of utilities, insurance, property taxes and ongoing maintenance (i.e. cleaning, snow removal and lawn care).

Sometimes business owners consider leasing a new facility for their business instead of buying. One advantage is the ability to sign a short-term or long-term lease with an option to renew. Further, leasing doesn’t tie up needed capital. If the leased building has common areas such as the conference room and fitness facility, you will be able to take advantage of these as well. As your business expands and you need more space, you may be able to move within the building if their structure allows. Your landlord will take care of making the leased space fit your needs and they will handle all the ownership responsibilities (i.e. property taxes, insurance and building maintenance).

The disadvantages of leasing, however, include the frustrating and time-consuming task of finding the perfect amount of space in exactly the right location. You may also lose your lease to a higher bidder or building sell-out. With leasing, you are at the mercy of the landlord, who sets rent and restrictions on building use.

There are many factors that go into the decision of leasing versus buying a building for you business. You should spend time understanding the cost-benefit scenario for your particular business needs.

BNC finances commercial building purchases through both conventional and SBA loans. We can help you analyze the facts and make the best decision for you and for your business. Call us anytime!

Financial Market Observations

By Mark E. Peiler, CFA – Senior Vice President, Chief Investment OFficer, mpeiler@bnccorp.com

My current observations of the financial markets can be summarized as follows:
1. Measures of financial stress and fear are low
2. Valuations are high
3. The additional return for accepting risk is low, and
4. The set of good risk/reward opportunities has diminished

These conditions have an impact on future return expectations and portfolio construction. To understand more, visit with one of our Wealth Management staff or attend our upcoming Wealth Management conference September 25th.

BNC Wealth Management Conference

Questions to ask when working with a Builder/Contractor

By Doug Brendel, EVP Mortgage Lending, dbrendel@bncnationalbank.com

Small Business Owner Can I see some of your projects?
When you walk through other homes the builder has completed or ones that are in the process of being built, this can give you an idea of their work ethic and the quality of work that is done.

Can I talk to some of your past clients?
A good or bad reference can really help you make a decision! A good contractor will be happy to provide a list of written references.

Are you licensed and insured?
Always make sure the builder or contractor you select has the proper licensing and insurance (both general liability and workers compensation insurance). You should be able to find this information through third party providers, like state licensing sites. If they do not have coverage, you could end up paying for damage or negligence out of your own pocket and then have to try and get your funds from the contractor.

How long have you been in the business?
Longevity is good sign that the builder or contractor has the experience and proven ability you need for your home. Research the history of the company and visit the Better Business Bureau website.

How do you handle calls and who will be doing the actual work on site? (Who is my contact?)
Make sure you know who you will be dealing with on a daily basis as your construction begins. Many times sub-contractors may be used and you want to make sure they are trusted by your contractor. You want to feel comfortable will all parties involved with the project. Knowing who will be at the site and their work schedule will help you, as well as them. They will need time to complete the work uninterrupted while you need to know who to direct your questions to.

Do you guarantee your work?
A verbal warranty such as, “Don’t worry, if something breaks, I will fix it.” isn’t worth anything! You must have a written warranty that clearly explains what is covered and how long the coverage lasts.

Can I get an estimate of the costs and time required for my build/project?
Without proper communication of the cost and time involved, your dream home or project could become a nightmare. Ask if they will keep you up to date with how the budget and timeline are going and involve you to approve changes needed. Know what to expect in terms of costs and time with your builder. You don’t want to be surprised down the road.

When is the time to setup a Power of Attorney for your parents? Assist your elderly parents with banking.

By Martelle Olsen, Director of Case Management, Guardianship and Fiduciary Services for Sterling Case Management & Fiduciaries of Arizona

Our company’s commitment is to safeguard our clients’ dignity, resources and security. In order to accomplish those objectives for your aging parents we advise that it is never too soon to have a conversation about appointing a Power of Attorney. Disease, dementia, stroke or accident can cause your loved one to be unable to make good decisions regarding their finances and wishes for their estate. Starting early can prevent hardship if an event occurs rendering them incapable to make sound financial decisions for themselves.

We recommend having several conversations over time to establish a thorough understanding of what is important and expected of an appointed Power of Attorney. It is imperative to initially determine who the most appropriate person to be appointed is. Exploring all options, whether it’s a family member or a third party professional, is a significant first step.

Once a Financial Power of Attorney has been selected it is essential to develop a financial plan and to understand your parents’ future needs and wishes. These should be discussed and documented. Finally we recommend using a reputable Elder Law Attorney to prepare your family estate documents.

Having the conversation before they lose the ability to make their own rational decisions will ensure that your loved one’s wishes, dignity and estate are secure.

Steps to take BEFORE you forget your BNC Online Banking password

Have you ever forgotten your password and had to jump through hoops to reset it? Follow these quick, simple steps to make it easier…in case you ever do forget.

1. Log into the Online Banking portal at www.bncbank.com.

Online Banking

 

 

 

 

 

2. Select the My Options tab on the top.

My Options Tab

 

 

 

 

 

3. Under the Personal tab, first make sure your current email address is listed. You don’t want your password to be sent to an email that no longer exists or is locked itself! MOST IMPORTANTLY, add a Password Reset Question and Password Reset Answer.

Personal Tab copy

Now you’re set and can use the “Forgot My Password” found on the sign-in page.

Further questions? Give us a call, 1-800-BNC-BANK or visit www.bncbank.com/i-forgot-my-pin.htm.

If you are still using Windows XP

Microsoft ended support for Windows XP on April 8, 2014. This means that after that date Microsoft no longer provides security updates or technical support for the Windows XP operating system. It is important that you migrate to a current operating system so you can receive regular security updates to protect your computer from malicious attacks. Failure to upgrade to a current operating system puts you at an even greater risk for viruses, spyware and other malicious software. For more information please visit http://windows.microsoft.com/en-us/windows/end-support-help

Heartbleed Bug Susceptibility

Heartbleed Bug Susceptibility

HeartbleedYou may have read or received information concerning the “Heartbleed Bug”, a vulnerability in the OpenSSL cryptographic library which is used by roughly two-thirds of all websites on the Internet. BNC’s web servers do not use OpenSSL. In addition, BNC has verified that websites hosted by BNC’s service providers are not vulnerable to the Heartbleed Bug. BNC still encourages customers to use precautions to protect themselves by frequent password changes, securing confidential information, using anti-virus and anti-malware products, avoiding suspect websites, and ignoring and deleting any emails from unknown entities. If you are concerned whether or not any of the websites you use are affected by the Heartbleed Bug, you can use the following Security check tool from LastPass.

Do you know your FICO Score? When was the last time you checked your credit?

Do you know your FICO Score? When was the last time you checked your credit?

Fico1 By JR Rohr, Vice President Mortgage Retail Sales, jrohr@bncbnationalbank.com

Some times what you don’t know can hurt you. Your FICO Scores play an important role in a majority of major purchases. Your FICO Scores can affect what you pay for a home loan, a car loan, insurance, student loans, etc.

The FICO® Score is calculated from several different pieces of credit data in your credit report. This data is grouped into five categories as outlined above. The percentages in the chart reflect how important each of the categories is in determining how your FICO Score is calculated.

Before you make your next purchase, do a little research. There are multiple websites available that can help you monitor your FICO Score. Make sure you know your FICO Score and how it is calculated.

What’s Your Credit Score?

ExcellentGoodFairAverage U.S. ScoreUncertainPoor
750 and Up749 - 720719 - 660678659 - 620619 or Below

FICO information obtained from www.myfico.com

Return on Invested Capital

By Mark E. Peiler, CFA – Senior Vice President, Chief Investment Officer, mpeiler@bnccorp.com

On March 6, 2009 the S&P 500 index reached an intraday low just under 667, nearly 58 percent below its 1,576 October 11, 2007 high. Five years after the 667 low, the S&P 500 closed at 1,877 on March 6, 2014. The table that follows summarizes the results from an equity screening process of the broader Russell 3000 index for each of these three dates.

 Oct. 11, 2007March 6, 2009March 6, 2014
S&P 5001,5766671,877
Russell 3000 Stocks With ROIC > 15% and EV/EBIT < 10X11631157
Russell 3000 Stocks With ROIC > 15%484403318
Russell 3000 Stocks With EV/EBIT < 10X3111,274220
Source: Bloomberg

Observation #1: The share of the Russell 3000 stocks with a Return on Invested Capital (“ROIC”) greater than 15 percent is relatively stable between 10 and 20 percent of the stocks in the index. This scarcity is why a high ROIC is one of the foundations in BNC Wealth Management’s value investing process. Presently, stocks with a ROIC greater than 15 percent are rarer than in the two other dates presented.

Observation #2: In contrast, notice how changes in valuation can dramatically impact the availability of stocks with low multiples of Enterprise Value to Earnings Before Interest and Taxes (“EV/EBIT”). The number of stocks with an EV/EBIT multiple of less than 10X increased from 311 (approximately 10 percent) on October 11, 2007 to 1,274 (over 40 percent) on March 6, 2009. Five years after the S&P 500’s March 6, 2009 trough, only 220 (approximately 7 percent) possess an EV/EBIT multiple of less than 10X. Furthermore, only 57 stocks currently exhibit a ROIC greater than 15 percent AND an EV/EBIT multiple of less than 10X, down from 311 on March 6, 2009.

Takeaway: The opportunity set of solid businesses available at low valuations was highest at the market’s low point when fear and bearishness were also running high. In contrast, high bullish sentiment typically coincides with periods following recent market strength. Unfortunately, it is these environments when the ability to own solid businesses at low valuations is extremely limited.

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