Georgian Bank is the Latest to Fall

On September 25, 2009

Georgian Bank is the Latest to Fall

Fridays are when we bid adieu to terminally ill banks. Today it's Atlanta's Georgian Bank, which is being closed by state banking regulators. South Carolina's First Citizens Bank and Trust will acquire most of the $2 billion-asset company's assets, which include five branches and roughly $2 billion in deposits. Under the loss-sharing agreement with First Citizens, the FDIC is forking out $892 million from its deposit insurance fund to cover Georgian. That's a lot. And in general, taking smaller banks into receivership costs the FDIC proportionally more than disposing larger institutions. For instance, the demise of $25 billion Colonial Bancgroup, whose assets were acquired in August by BB&T, cost the FDIC deposit fund $2.8 billion, or about 11 percent of...


On September 25, 2009

Insurance Commissioners Tell Health Insurers: Stop Scaring Seniors

Like every other powerful group in the country, health insurers turn up the lobbying heat when they see their interests compromised. They spent $15.5 million in the first half of 2009 to influence health care reform, according to the National Underwriter.  Some would say that the most effective media campaign ever was "Harry and Louise," which torpedoed Hillary Clinton's nationalized healthcare reform in 1992. But insurers don't usually like their names attached to public brawls, preferring instead to operate behind front organizations like "Health Care America," which took umbrage with Michael Moore's movie "Sicko." That's why it was quite a surprise when Humana, the fourth largest health insurer in America, came out from behind the veil and contacted its Medicare Advantage health...
On September 25, 2009

Better Ways to Innovate | Harvard IdeaCast

Incremental innovation might work as a short-term strategy (and make more sense in this economy), but it's not the way to compete long-term, says Roberto Verganti, author of "Design Driven Innovation." The future demands something much more radical from your company. In this podcast, Verganti explains what it takes to create game-changing products, such as Apple's iPhone and Nintendo's Wii, and how to deliver innovation that your customers will love. Featured Guest: Roberto Verganti, author of "Design Driven Innovation." Copyright 2009 Harvard Business School Publishing. Click Play to hear the podcast. If you don’t see the player window, click refresh on your browser. If it still doesn’t appear, let our customer service team know. More HBR IdeaCasts. Subscribe to HBR...
On September 25, 2009

Why Lower Energy Prices Hurt FedEx

U.S. domestic package revenue fell 22 percent at FedEx in its first-quarter 2010, hurt by a 23 percent drop in revenue per package due to lower fuel surcharges-even though package volume was essentially flat. Is the corollary to this outcome, therefore that rising energy prices will help drive performance at the package-delivery giant? FedEx has an indexed fuel surcharge for U.S. domestic and U.S. outbound shipments, with different trigger points for the type of service used by the customer: The fuel surcharge percentage for FedEx Express services is subject to monthly adjustment based on a rounded average of the U.S. Gulf Coast (USGC) spot price for a gallon of kerosene-type jet fuel; the fuel surcharge percentage for FedEx Ground...


On September 25, 2009

Giant Supermarkets Seek Advantage of Small Stores

Giant, the Carlisle, Pa.-division of Ahold USA, is building on the work it has done developing a convenience store operation to expand the range of formats it operates, looking in part at smaller concepts that can help it reach more consumers. To advance its efforts the company promoted Ron Bagley to director of compact formats, a newly created position. Bagley, whose most recent position was director of operations, merchandising, will report to Steve Lamontagne, vp of format development. In April, the supermarket operator opened Giant To Go, a 4,400 square foot facility, in Lancaster, Pa., combining typical convenience store assortment and services with a more elaborate food presentation including produce, meats, deli and bakery. Consumer using the convenience store are...


On September 25, 2009

Twitter’s $100M Funding Coup Prompts ‘Bubble’ Buzz

After much speculation, Twitter CEO Evan Williams confirmed on the microblogging site's own blog that it has closed a "significant" round of funding. Williams didn't cite the dollar amount, but it has been widely reported that six investors are prepared to pump close to $100 million into the company, giving it a $1 billion valuation.
On September 25, 2009

More Drama and Mixed Messages in Kraft-Cadbury Flirtation

In case there was any confusion about what Cadbury CEO Todd Stitzer meant when he said, "I would never say there's not some strategic sense in [Kraft and Cadbury] coming together," Cadbury has come forward to clarify things. Apparently Stitzer meant to add, "I mean, it's completely true; there's no strategic sense whatsoever; we hate those guys. But I would never say that." To quote Cadbury directly, "Mr. Stitzer does not believe that Kraft's proposal makes strategic or financial sense for Cadbury and his comments should not be interpreted in any other way." Kraft recently made a surprise $16.7 billion bid for the British confectionery company, but Cadbury shunned the offer -- though many speculate that the company is secretly...
On September 25, 2009

Consumer Group Says Insurers’ Use of Credit Scores Has Flaws

Credit scores are one of property insurers' favorite tools to separate the sheep, those who will get car and homeowners' insurance policies, from the goats, those who will be rejected or charged more. Most states allow insurers to do this, albeit with some restrictions and many misgivings. Someone with a low credit score is more likely to live in an urban area, have a minimal or no bank account, and other financial problems. If banks aren't allowed to "redline" poorer neighborhoods, why are insurers able to discriminate against people who likely have more debt? Insurance companies argue that drivers preoccupied with a child's medical bills are more likely to have an accident. Cars parked on streets in rundown neighborhoods are...
On September 25, 2009

Verizon Denies Palm Snub, Will Add Pre in January

Verizon and Palm are reportedly scrapping over terms of a contract that would give the carrier the right to offer Palm's Pre smartphone. Back in May, Lowell McAdam, president and CEO of Verizon Wireless, said the carrier would offer the Pre in January. Reports that Verizon changed its mind appeared in the media Thursday. Verizon, however, expects to offer the Pre as planned.
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