Business owners and financial executives must continuously balance the cost of doing business with the risk of doing business. Each time a dollar of revenue is produced, all costs of generating that dollar have been thoroughly analyzed in an effort to maximize the profit margin, including costs associated with accounts receivable management. However, the hundreds of billions of dollars in losses associated with bad debt charge-offs in recent years have brought new attention to managing trade receivables from a risk perspective.

Accounts receivable, which typically represent more than 40% of a company’s assets, are naturally a vital component of a healthy business. If a major customer is unable to pay its obligations, or if several customers are unable to pay their invoices, there will be a negative impact to cash flow, earnings, and capital. In a worst-case scenario, this could literally put a company out of business. These risks require thorough analysis. 

A trade credit insurance policy also allows companies to feel secure in extending more credit to current customers, or to pursue new, larger customers that would have otherwise seemed too risky. It significantly reduces the risk of entering new markets.

Trade credit insurance can also improve a company’s relationship with its lender. For example, a $25 million scrap metal dealer had extreme concentration in its accounts receivable because it only had eight active accounts. The smallest of these customers had A/R balances in the low six-figure range, and the largest was into the low seven-figure range. The company was seeking additional capital to further expand the business.

The company’s bank was concerned about this concentration and it requested a trade credit program to fully leverage the accounts receivable as collateral. The scrap metal dealer purchased a trade credit insurance policy that specifically named all its buyers, providing the bank the comfort level it needed to increase the eligible receivables.

In fact, the bank increased its advance rate from 80% to 85% for this customer. The net result was that the scrap metal dealer was able to obtain an additional $400,000 in working capital because of its trade credit insurance coverage. The cost of the policy was $25,000 so the return on this investment was excellent, and the scrap dealer was able to use the additional cash to continue funding the growth of the company.

In the face of the global recessionary climate, increased business failures both domestically and globally, and the tightening of credit across the board, it becomes obvious that business leaders must be more vigilant than ever regarding the management of accounts receivable. A trade credit insurance policy, if used properly, provides a valuable extension to a company’s credit management practices – a second pair of objective eyes when approving buyers, as well as an early warning system should things begin to decline so that exposure can be effectively managed. And, ultimately, should an unexpected loss occur, the trade credit insurance policy provides indemnification, thus protecting the policyholder’s revenue and bottom line. By maintaining a strong relationship between the insurer and the credit management department, trade credit insurance may be the wisest investment a company can make to ensure its profits, cash flow, and capital are protected.

Article Compliments of

Johnny Beenes, Agent (CA License# 0I08011)

Euler Hermes - 3011 Townsgate Road, Suite 130  - Westlake Village, CA 91361

Cell: 818-720-2189 - Fax: 323-798-4047 

johnny.beenes@eulerhermes.com  www.eulerhermes.us  A company of Allianz

A DDoS attack occurs when a bank’s website is intentionally flooded with an extremely high volume of electronic traffic. This flood of traffic simply crowds out legitimate customers trying to use the bank’s website. While these attacks can significantly slow down (even temporarily disable) a bank’s website, they have not involved any form of data breach. 

Again, Mission Valley has not experienced any of these malicious events, however, we thought it important to share the following information (also from the American Banker’s Association) to provide you with some background information in the event that it should happen to MVB or another financial institution that you may deal with.

What does a distributed denial of service (DDoS) attack do?

• In a DDoS attack, banks’ websites are flooded with an extremely high volume of electronic traffic from thousands of locations around the world, which crowds-out legitimate customers trying to use the bank’s website.

• These slowdowns have NOT involved data breaches.

• The flood of electronic traffic is intended to slow down or disable the bank’s website.

• The traffic is not designed to penetrate banks’ internal systems or expose sensitive personal information.

• The attacks have not resulted in unauthorized access to customer information.

What are banks doing about the attacks?

• Bank employees are working hard to ensure you have access to normal, safe and consistent online financial services.

• Banks use sophisticated online security strategies to protect customer accounts.

• While you may experience difficulty in accessing accounts through the website, other channels such as ATM, telephone and branch banking should remain available.

• Banks are working with telecommunications providers to increase capacity and invest in technology to defend against attacks.

• Banks are collaborating with other banks, federal regulators, law enforcement officials, other government agencies, Internet Service Providers, and Internet security experts to fully analyze and deflect online attacks and deliver safe and consistent online service.

What can I do to protect my personal financial information online?

• Install on your computer (and keep updated) anti-virus software, firewall and anti-spyware software.

• Set your computer’s operating system and browser to automatically download authorized security upgrades. This will help to ensure that your operating system and browser include the latest security updates.

• Don’t get hooked by phishing. Do not respond to unsolicited emails requesting personal information and do not download attachments on unsolicited emails.

• Use care when surfing the internet – avoid opening unsolicited ‘Pop-Ups’.

• Remember that your best defense is using strong passwords and changing them regularly. The best passwords are long and complex, using a minimum of 8 characters and incorporating a combination of numbers, symbols and letters. Avoid birthdays, pet names and simple passwords like 12345. Change passwords often, at least three times a year -- however, more often is preferable.

Even in today’s tough economy, there are some great options available to qualified companies that can make a huge impact on getting the flow back into your cash position. When you will actually receive the cash you need to run and grow your business is an important consideration.

As our economy has changed, so have financing options. More and more financially sound small to mid-sized businesses are finding Accounts Receivable (AR) Financing to be a great tool to help manage cash flow and grow their business. Today, many qualified borrowers are choosing AR Financing over more traditional forms of credit available to them because of the unique benefits this type of financing provides.

As an example, a business generating $2 Million dollars in gross annual sales creates $166,000 per month. If receivables are paying in 30 days, then the business could improve its cash position by over $5,000 for every day it improves its AR turn. By obtaining cash for invoices within 24 hours, a business eliminates a frozen asset on the books and replaces it with a predictable source of working capital to run the business.

What is AR Financing?

AR Financing is simply the selling of outstanding invoices or receivables at a discount to a bank, finance or factoring company, providing quick cash to the business. It bridges the gap between payables due today and receivables remitted in 30 days or more. The value assigned to the account depends upon the age of a receivable. Simply put, the more current the invoice, the more value it is assigned. When utilized, AR Financing bridges the cash gap between a company’s payables and receivables immediately.

How it works.

The lender purchases all of a company’s qualifying current and future receivables at an agreed upon discount rate and pays the company for all current receivables immediately. The lender continues to pay the company for new receivables as they are generated, generally within 48 hours of origination. This greatly enhances the reliability of the borrower’s cash flow stream, effectively allowing the borrower to operate as an all cash business.

What to think about.

Before making the decision whether AR Financing is right for your business, do your homework and explore all your options, including traditional lines of credit and term loans, SBA Financing, or personal financing. While many financially sound small to mid-sized businesses are selecting AR Financing as their preferred form of credit, determine if it is truly right for your business.

The last word if you decide that AR Financing is a good choice for your business, carefully select your lender. The right relationship can make a huge difference with regard to the success, and even the survival, of your business.

Janet Shinkle is vice president and relationship manager with Mission Valley Bank

When planning a company initiative, one crucial aspect right from the start should be the Project Branding (PB), also known as assigning a name to the project. To be truly effective, a PB follows a fashion similar to creating your company’s brand to an external customer base. In fact, projects run with Six Sigma, focus on the Charter (created in the “Design” phase) by encouraging the creation of a project title. It serves as a description of the objective and is remembered by all participating teams until project completion. The PB goes beyond a mere title, however, if it is to achieve all the benefits of a famous retail brand. It is also an extremely creative and fun exercise that can engage employees.

To create a PB you need to assess the size of the impact of your project. Suppose that you are re-engineering your current sales process or even payroll administration. Both of these projects would involve best practices that will reach into different audiences. The PB should speak to these different groups and in some cases; it could also include a logo or image. For maximum effect, both the PB and its logo should bear a positive message, especially if the initiatives require a significant demand from the staff, such as culture change or re-shaping major functions.

Once the PB has been created, it should be advertised internally. Conferences, meetings, email and discussions around the company are all effective methods to raise awareness. A PB solely communicated through email might be misunderstood or appear as a formality, losing its intended value.

If all the pointers mentioned so far look familiar it is because, with the exception of a few minor details, you have probably done this exercise when you created your company’s brand or rolled out a new product or service. The difference this time is that it should be faster and should provide greater interaction. It is important that the PB be selected and handled with great care for certain projects. Depending on your business sector, when releasing a new product or service, you may need to safeguard the project from an external leak, but you still need company-wide

involvement. An obvious PB here could prove harmful, so Secret PB’s are another option for advertising an initiative, without disclosing too many details. Technology companies and M&A firms use this technique, frequently creating PB’s and code names for prototypes, releases and investments.

A well designed PB can become a tool to generate a high level of inquisitiveness that can significantly increase participation without complete project knowledge.

So how do you pick a good name for your project? Despite the common sense belief, a PB that is not related to work can go a long way. Many teams use words such as movie titles, rivers, cities, planets and hobbies. These can work well, if a link can be found between the initiative and the PB. For instance, if you are contemplating a new international product that will be launched in New York, you might pick a renowned landmark like the Statue of

Liberty. The options are limitless – but whatever the choice, it should creative and entertaining.

The final objective of branding a project is to raise awareness. Successful projects are embraced throughout the organization, making them last longer and intertwining them into the culture. By embedding project goals into a positive message, you are well on your way to successfully propagating it throughout the entire organization.

Article Adapted from our Friends at Pacific Coast Banker’s Bank

This same thought process can be applied to your business plans -- the concept of marginal analysis, a notion widely used in finance and the basis for modeling scenarios. A wide array of topics can be analyzed marginally (cost, utility, benefit, productivity, quantities of goods and services). For instance, measuring the marginal cost of a unit of manufactured product is the cost of the additional inputs needed to produce that unit. In simple form, this math can be done on a spreadsheet.

We thought this topic important because many businesses often begin shaping their plans either by looking at forecasted revenues or by the cost of the initiative. Marginality is not a binary decision, because it provides information that can drive multiple scenarios, so it can also help fine tune the outcomes. Suppose that a business owner / manager believes their company can expand revenues greatly by increasing production. This implies incorporating a new piece of equipment. Doing so costs money, so running these types of scenarios can help forecast the outcomes greatly enhancing the ability to make a sound decision.

A logical starting point would be marginal benefit analysis. This means obtaining the difference between marginal revenues and marginal costs. However, suppose that operating costs grow geometrically as the extra units are produced. Doing pre-analysis could reveal that all this effort leads to bad results. For instance, variable costs could rise because employees need to be paid overtime rates to produce extra units, or additional and more expensive rent may be needed to make room for more workers. This is why the concept of marginality should be taken with great care. Marginal analysis does not provide explanations about the movements and behavior in all the variables involved. Rather, marginality is frequently misused in this sense. It requires moving a step forward, without stopping at the marginal benefit calculation. While the thought of this type of analysis may seem initially cumbersome, in the long run – it can provide a strong foundation when considering the relationship of marginal and average costs over time.

Consider that, in some markets, marginal cost can surpass average variable cost in the long run. That means businesses participating in the supply side may suffer diseconomies at certain volumes (shutdown points). Put another way, once they reach a certain inflection point, they could begin to run at a loss. Further, business owners will have to run the analysis to ensure the final price covers the costs. Many projects are driven by emotion or gut instinct, which can lead to disastrous results, so scenario testing can help introduce logical analysis.

To do projects right, each should be planned with attention to detail. The addition of a simple piece of equipment could have a broader impact than just more widget production. Other concepts such as “hidden costs” or “shadow prices” can arise after project kick-off and reduce profits, so a bit of extra research and modeling is definitely in your best.

Adapted from our friends at Pacific Coast Banker’s Bank

There is no hard and fast rule as to when it's safe to throw away financial documents. One thing to remember, though, is that federal tax rules require you to have receipts and other records that support items on your tax return for as long as the IRS can assess you additional tax.  Basically, the IRS has about six years to assess additional tax if you underreported your income by more than 25 percent. Many tax advisors recommend holding all tax records for about seven years, allowing extra time for any unforeseen delays that may have occurred in the processing of your return.

With tax considerations in mind, here are suggestions that may make sense for many people.

Credit card and bank account statements: Save those with no tax return usefulness for about a year, but those with tax significance should be saved for seven years.  Canceled checks: Those unrelated to anything you claim on your income tax form, and not needed to prove you've paid a bill or debt, probably can be destroyed after you've verified that your bank statement is correct. But canceled checks that support your tax returns, such as charitable contributions or tax payments, probably should be held for seven years.  Also, you may want to keep, indefinitely, any canceled checks and related receipts or documents for a home purchase or sale, renovations, or other improvements to a property you own. But once a home has been sold and another seven years have passed, checks related to renovations or improvements can be destroyed.

Of course, many banks and credit unions no longer return cancelled checks. If you do not get cancelled checks with your statements you maycan request copies.  Remember to keep the information on your bank statement to be able to order copies if you're audited in the future.  Also, if you keep records electronically, be sure to back up your data. You can store it in various ways (on CDs, flash drives and so on), but as old technology is no longer supported, you will need to transfer your old data to new media. Another option is to research different companies that provide backup storage online, either free or for a small charge.

Deposit, ATM, credit card and debit card receipts: Save them until the transaction appears on your statement and you've verified that the information is accurate. Exceptions would be receipts for expensive items. If they are under warranty or you have to file an insurance claim, those receipts may come in handy.

Finally, before tossing away any document that contains a Social Security number, bank account number or other personal information (especially financial information), shred it to avoid becoming a victim of identity theft.

For additional guidance on what records to toss and when, consult your accountant, attorney orother trusted advisor.

Depending on your age you might be thinking of retirement at some point. That is one reason we found a survey by employee Benefit Research Institute interesting. It found 37% of workers say they expect to retire after age 65 and yet, the median age of retirement since 1991 has remained about 62. Despite all the hype around 401(k)’s becoming 201(k)’s given the recession, that is an odd situation, so what gives? The study found about 50% of people are forced into retirement for various reasons that include health problems (51%); layoffs or company closure (21%); caring for a family member (19%); or not having the skills to do the job anymore (11%). No matter the economic picture, these issues remain, so look for the retirement age to hold about where it is for the foreseeable future.

Speaking of interesting things, the recent announcement by the Fed that the level of interest rates will be linked to the unemployment rate is completely new. However, this should not be too surprising, as this is really a confirmation of current practice, rather than a change in direction. Monetary policy generally follows a modified version of the

Phillips Relation, which depicts a negative function between the rate of inflation and the rate of unemployment. The original model as designed by A. W. Phillips in 1958 applied to wages, instead of unemployment.

A summarized explanation of the Phillips Relation is that a decrease in unemployment creates inflationary pressure by increasing wages. That makes sense, but higher labor productivity and other factors may offset this relationship, so the model is not as straightforward as it seems. Wages need to grow faster than productivity in order to have inflationary effects. In 1968, this negative relationship was revisited by Milton Friedman and inflation expectations were included into the formula. Since then, a substantial volume of economic research has occurred, but in short, the underlying idea is that individuals and businesses incorporate inflation expectations into their demand for money. As an illustration, if you expect prices to increase 3% in the coming year, you will likely try to get your salary increased by at least that amount.

You might be wondering what the interest rate has in common with these variables and will note we avoided all the formulae in this explanation. To make the case simple, inflation expectations are adjusted in this model depending on what truly happens in the market. The model will set up an interest rate level that will match the expectations of money demand, based on inflationary expectations and thereby impacting the level of prices. In this context, unemployment is used as what economists call an exogenous variable (comes from outside the model). Other variables, such as inflation, are endogenous (originate from within the model) because they are manipulated to verify that the desired result is obtained.

What has been stated with the latest Fed announcement is that unemployment will now be included in modeling at the 6.5% level. In mathematics, that means a third formula has been introduced to account for behavioral features. The implications of doing this could be material, because solving this system of equations means providing information about the relationship between prices and unemployment.

This said, the announcement does not change the current methodology because the model has been monitoring levels of unemployment closely all along (through what is called the dual mandate). The new communication is different because it sets a hard goal of 6.5%; thereby confirming interest rates will be at low levels until this target is reached.

From a community banking perspective, this means that interest rates will remain at their low levels in the near term and that we must focus on smart lending – particularly to the small business market. For consumers and small business it means that while you will not be seeing great change in the interest earned on your deposit dollars any time soon, it is an optimum time to borrow should that be within your financial plan.

On January 1, 2013, the nation’s roller-coaster ride over the fiscal cliff with the expiration of the Bush era tax cuts was narrowly averted when Congress passed the American Taxpayer Relief Act (‘ATRA’) of 2012 (H.R. 8). This bill now goes to the President for signature before becoming enacted. The President signed the bill on January 2.

ATRA permanently extends a number of the 2001, 2003 and 2009 tax relief provisions for many individuals and business that had already expired at the end of 2011 and 2012. Some tax provisions, however, are extended only temporarily.

The following is a brief summary of the ATRA tax provisions:

Individuals

ATRA permanently retains the 10%, 15%, 25%, 28% and 33% income tax brackets. The 35% tax bracket ends at $400,000 for single filers. Above this threshold, there's a new 39.6% tax bracket. Thresholds for the new 39.6% bracket for 2013 will be:

• Married Filing Jointly: $450,000 of taxable income

• Qualifying Widow(er): $450,000 of taxable income

• Head of Household: $425,000 of taxable income

• Single: $400,000 of taxable income

• Married Filing Separately: $225,000 of taxable income

ATRA permanently retains the 0% and 15% tax rates on qualified dividends and long-term capital gains, and adds a new 20% tax rate that would apply to taxpayers who fall within the new 39.6% tax bracket.

ATRA Patches the AMT, providing the following exemptions and adjusts the exemption amount for inflation going forward:

 • Married Filing Jointly: $78,750

• Qualifying Widow(er): $78,750

• Single: $50,600

• Head of Household: $50,600

• Married Filing Separately: $39,375

Itemized deductions are limited. The total amount of certain deductions allowable is reduced by the lesser of 3% of the taxpayer's adjusted gross income (AGI) over the threshold amount or by 80% of otherwise allowable itemized deductions. The threshold amounts at which itemized deductions would start to be reduced are:

 • Married Filing Jointly: $300,000 of AGI

• Qualifying Widow(er): $300,000 of AGI

• Head of Household: $275,000 of AGI

• Single: $250,000 of AGI

• Married Filing Separately: $150,000 of AGI

 These threshold amounts would be indexed for inflation for years after 2013.

Similarly, personal exemptions are limited. Taxpayers would see their total personal exemptions reduced by two percent for each $2,500 (or fraction thereof) by which adjusted gross income exceeds the threshold. The threshold amounts at which personal exemptions would start to be reduced are the same as for itemized deductions.

 ATRA extends through 2013 the following individual income tax provisions:

• Deduction for certain expenses of elementary and secondary school teachers

• Exclusion from gross income of discharge of qualified principal residence indebtedness

• Parity for exclusion from income for employer-provided mass transit and parking benefits

• Mortgage insurance treated as qualified principal residence interest

• Deduction of state and general sales taxes in lieu of state income tax

• Special rule for contributions of capital gain property made for conservation purposes

• The above-the-line deduction for qualified tuition and related expenses.

• The tax-free charitable distribution from IRAs of up to $100,000 per year is temporarily extended through the end of 2013. ATRA provides rules for handling IRA distributions made in December 2012 and January 2013 so as to enable IRA beneficiaries to make charitable distributions for the 2012 tax year.

The following provisions, among others, of the 2001 and the 2003 tax relief acts are either permanently extended or modified:

• The student loan interest deduction is permanently extended. ATRA eliminates the rule that the deduction can be claimed only during the first 60 months of repayment.

• The child tax credit remains unchanged and is permanently extended. The maximum amount of the child tax credit is $1,000, and the credit is partially refundable.

• The dependent care tax credit remains unchanged and is permanently extended. Daycare expenses up to $3,000 for one child and $6,000 for two or more children qualify for the tax credit, and these amounts are not indexed for inflation.

• The adoption credit is permanently extended. The credit is worth up to $10,000 (indexed for inflation).

• Also permanently extended is the earned income tax credit for families with three or more dependents.

• The American opportunity tax credit is extended temporarily through the end of 2017.

• ATRA permanently extends the $2,000 annual contribution limit to Coverdell Education Savings Accounts.

• Employer provided educational assistance is permanently extended. Employers are permitted to reimburse employees for undergraduate and graduate level courses.

Estate and Gift Tax

The Estate and Gift Tax Exemption and the Generation-Skipping Tax Exemption permanently remain at $5,120,000 per person (or $10,240,000 for two spouses). These exemption amounts increase in future years for inflation. The unified estate and gift tax rate (and the Generation-Skipping Tax rate) increases to 40% (from its former 35% amount). The New Tax Act also provides for the spousal portability provision which allows spouses to transfer their unused estate tax exemption to their surviving spouse. ATRA does not include any of the threatened tax provisions to limit the use of GRATs, restrict sales to grantor trusts (known as ”defective income trusts”), or to restrict valuation discounts and, therefore, these important estate planning techniques can continue to be utilized.

Business

ATRA extends through 2013 certain business tax provisions that expired at the end of 2011 including, among others, the following:

• Temporary minimum low-income tax credit rate for non-federally subsidized new buildings

• New markets tax credit

• Employer wage credit for employees who are active duty members of the uniformed services

• Work opportunity tax credit

• Enhanced charitable deduction for contributions of food inventory

• Increased expensing limitations The Section 179 dollar limit for tax years 2012 and 2013 is $500,000 with an investment based phase-out of $2,000,000

• The additional 50% first-year bonus depreciation deduction

• The inclusion of qualified leasehold property, qualified restaurant property and qualified retail improvement property in the 15-year class for depreciation purposes

• Special expensing rules for certain film and television productions

• Certain international tax provisions relating to Subpart F and the Foreign Investment in Real Properties Act

• Section 1202 Temporary exclusion of 100% of gain on certain small business stock

• Basis adjustment to stock of S corporations making charitable contributions of property

• Reduction in S-corporation recognition period for built-in-gains tax

• Empowerment zone incentives

• Research Credit

 Energy Incentives

ATRA Extends through 2013 certain energy tax incentives, among others, that expired at the end of 2011 including:

• Credit for energy efficient existing homes

• Credit for alternative fuel vehicle refueling property

• Credit for 2- or 3-wheeled plug-in electric vehicles

• Credit for energy-efficient new homes

• Credit for energy-efficient new appliances

• Alternative fuels excise tax credit

Although we welcome ATRA, we are left wanting more. Here is what ATRA did not do:

• It did not extend the payroll tax holiday and, therefore, effectively raises taxes for all wage earners and self-employed individuals. This will increase OASDI taxes from 4.2 to 6.2 percent on earned income up to the Social Security wage base ($113,700 for 2013.)

• It did not affect the tax on net investment income as part of the healthcare overhaul. As a result, the tax on high-income earners will increase to as high as 23.8%. It should be noted that, with respect to the tax on net investment income, the definition of “high-income” earners is different than under the Act, having a reduced threshold of $250,000 (married filing jointly) and $200,000 (single taxpayers).

• It did not repeal the carried interest rules for partnerships having service partners receiving carried interests in future gains of the partnership. Under current law, the gain derived from the “carry” is taxed at preferential rates. Hedge fund and private equity fund managers generally receive a management fee and a profits interest as compensation for managing investments. Under current law, the profits interest is, in general, potentially eligible for the preferential long-term capital gains rate. Many consider this a loophole, as the fund manager is providing services and the profits interest can be considered compensation for those services rendered. Several bills have been introduced in Congress to repeal this rule over the years.

While ATRA may have averted the so-called fiscal cliff by extending the Bush era tax cuts for most taxpayers, it was not a ‘grand bargain’ addressing tax reform and budget deficits as some had hoped. It did not reform corporate taxes nor eliminate what some consider loopholes. More importantly, it did not raise the debt ceiling which, apparently, was once again reached on December 31, 2012. Based upon commentary by the President, Democrats, and Republicans, we expect many of these tax issues to be revisited early this year as the next debt ceiling debate progresses.

Article Provided Courtesy of 

Tax Professionals Gumbiner Savett Inc.

310.828.9798

1. Save and invest. Don’t underestimate your ability to save and invest. With compound interest, even modest investments now can grow over time.

2. Lighten your credit load. Paying off high-interest debt may be your best investment strategy. Few investments pay off as well, or with less risk than, eliminating high-interest debt on credit cards or other loans.

3. Boost your "rainy-day" fund. Many experts recommend keeping about six months of expenses in a federally insured account to cover sudden unemployment or other emergencies.

4. "Sure thing" is fine as an expression but not as an investment pitch. Promises of guaranteed high returns, with little or no risk, are a classic warning sign of fraud. The potential for greater returns typically comes with greater risk. You know the saying -- if it sounds too good to be true, it probably is.

5. Take charge of your money. If you don’t know where it goes, start keeping track. There are plenty of tools to help you set a monthly budget and stick to it.

6. Pay yourself first. Put yourself at the top of your "payee" list. Regular automatic deductions from your paycheck or bank account into a savings or investment account will keep you on track toward your short and long-term financial goals.

7. Know your investment self. You’re the best judge of yourself. Use that knowledge to find investments that are a good match for you, based on your goals and your ability to tolerate risks.

8. Make sure your older investments still fit you. Take time to review your holdings and see if they’re still appropriate for you. If you’ve outgrown them, it’s probably time to sell them and buy something better suited to you.

9. Don’t put all your eggs in one basket. One way to reduce the risks of investing is to diversify your investment holdings. Think twice before investing heavily in shares of your employer’s stock or any single investment.

10. Ignorance isn’t always bliss, especially when it comes to your account statements. Sure, it can hurt to look at statements when investments are losing value. But if you don’t review your statements, you may miss problems in your accounts that are unrelated to performance.

11. Do your homework. Asking questions about financial opportunities and checking out the answers with unbiased sources can help you make informed choices and avoid fraud.

Want more information? Contact your Trusted Advisors at Mission Valley Bank!

Be on guard against inside jobs. This includes employee theft or misuse of cash, merchandise or equipment as well as fraud. "Minimize risks through steps such as pre-employment background checks, automated inventory tracking systems, audits, and clearly outlined policies for personal use of computers and other business equipment," said Luke W. Reynolds, Chief of the FDIC’s Outreach and Program Development Section. "Also, carefully select who handles revenue from customers, pays the bills and reviews account statements. And, ensure that there are procedures in place to detect and deter fraud."

Watch out for fraudulent transactions and bills. Scams can range from consumer payments with a worthless check or a fake credit or debit card to fraudulent returns of merchandise. Be sure you have insurance to protect against risks. Also ignore offers to buy lists of federal grant programs. To learn more about protecting your business, consult your local Small Business Administration District Office (www.sba.gov/content/find-local-sba-office).

Electronic frauds by third parties can be very costly to businesses, so take them seriously. The FDIC has seen an increase in reports of unauthorized electronic transfers made from bank accounts held by small businesses. "The most common and dangerous scam for small businesses is account takeover," said Michael Benardo, Chief of the FDIC’s Cyber-Fraud and Financial Crimes Section. "By sending fake e-mails and using fake Web sites to deliver malicious software, such as keystroke loggers, fraudsters may be able to obtain the IDs and passwords for online bank accounts and then make withdrawals from accounts."

Because businesses are generally not covered by federal consumer protections against unauthorized electronic fund transfers, a bank likely will not be responsible for reimbursing losses associated with the theft from the account if it says that negligence on the part of the business, such as falling for a common scam, was a factor.

Also equip your computers with up-to-date anti-virus software and firewalls (to block unwanted access). Make backup copies of critical business data on every computer. Also monitor account balances regularly, perhaps daily, to look for suspicious or unauthorized activity.

And, don’t click on links in or attachments to an unsolicited e-mail that asks for confidential information, even if it appears to be from a company you do business with or the government. Legitimate organizations won’t request that kind of information in an e-mail. When in doubt, go to another source to find the organization’s contact information so you can independently confirm the validity of the request.

To check out a variety of frauds targeting small businesses and what you can do to stop them, visit the scam alert page at www.usa.gov/topics/consumer/scams-fraud/business/small-business-scams.shtml

Black Friday was long known as the official first day of the holiday shopping season as people waited for Thanksgiving to pass before moving on to Christmas. With the proliferation of online retailers growing every year for the past decade, Cyber Monday became another icon of the holiday shopping experience. Cyber Monday, the first workday after Thanksgiving, found people using their high speed internet connections to make online purchases to begin their holiday shopping. However, with this technology readily available at home and on mobile devices, online shopping and its accompanying deals (and scams) have made their debut on Black Friday. Before you start your online shopping this season, follow these suggestions and tips for a safe and fulfilling shopping experience.

Window shopping with new meaning

Spend some time "window shopping" at different "stores" online. Look for gift ideas, deals and shipping deadlines. Search for coupon codes and online specials. Use your browser's search engine to type the name of a specific product or "online price comparison" for a list of websites to help you compare prices. Then check prices at the traditional brick & mortar stores in your area. Remember to consider the cost of shipping for online purchases and the cost of gas (and your time!) for traditional store purchases.

Online safety

While joining mall crowds and driving on congested roads with thousands of stressed out holiday shoppers may pose some safety (and sanity) risks – remember that shopping online isn't without its own set of concerns.

• If you're not using a large, reputable retailer, be sure to check for credibility. Look for a street address and phone number on the website. If something still doesn't feel right, call the phone number to ensure it is a legitimate business. Do your homework, but trust your instinct as well.
• Use your credit card, rather than debit card, if possible. If your number is compromised or stolen online, most credit cards have a $50 maximum liability. If however, someone gains access to your debit card, they can wipe out your entire checking account.
• Be sure the website is secure. Look at the URL to be sure it starts with HTTPS:// instead of HTTP:// (remember "S" for secure). Secure sites will also have a small padlock icon in the right corner of the screen.

Shipping and returns

Once you've found the deal you can't refuse, be sure to do a little more checking before hitting that "buy now" button. You want to be sure you'll get your merchandise in time and that you can return or replace it if necessary.

• Know your deadlines. The closer you get to Christmas, the less inventory may be available and the longer it may take for your merchandise to make it through your selected shipping channel. Be sure to consider the cost of shipping in the purchase price, especially if you will need express service. If you are traveling or need to make a trip to the post office to ship the item, calculate that time into your equation as well.
• Check the return policy. Understand how to return merchandise, who pays for it, how long you have to return it, and whether you will have your credit card refunded or just get a credit at that online retailer.

Email address

You will always have to provide an email address for an online purchase. This enables the seller to send you a confirmation message, but it also enables them to send promotions and other communications to you. You may want to receive these special deals and promotions via email, or you may not. While you can always opt-out of these messages, keep your primary email inbox clutter-free by creating an email account you use just for online shopping.

The Internet has certainly offered some variation on tradition when it comes to holiday shopping. If you choose to avoid the crowded malls and accompanying traffic, be sure to do it safely. After all, holiday shopping is part of the holiday tradition, regardless of how it is practiced.

Remember the ghosts of Christmas Past, Present and Future in Charles Dickens’ classic story, A Christmas Carol? Well, those three ghosts have inspired a timeless strategy for holiday spending.

CHRISTMAS PAST

Look back. Review how much you spent last year and how you spent it. Analyze what you spent money on, over what period of time, and how you paid for it. If you used credit cards, be sure to look at how long it took you to pay them off. If you were still carrying Christmas debt on your credit card while on summer vacation, you may want to rethink how you handle the holidays.

Also consider how the gifts you gave last year were appreciated. Did you spend a lot of money on token gifts that were forgotten before the holiday was over? Reconsider certain gift-giving--agree to not exchange gifts with some people or make a donation in their name to a favorite charity (of theirs, if possible).

CHRISTMAS PRESENT

Make a list. Include not only gifts, but decorations, cards & postage, food & drink, travel and any special stuff you'll need to buy.

Decide how much you have to spend. Set a budget and stick to it. Period.

Comparison shop—use online resources. If you've taken time to make a list of who you'll be buying for, it will be easy to think about what to buy for them. Start shopping at home—or at least start looking at home. Go online for gift ideas and start comparing prices.

Use cash if possible. Since you've established a budget, done your homework to find the best price and have committed to staying within your budget, shopping with cash will be a cinch. You'll be forced to think about an impulse purchase, perhaps thinking it through to the point of realizing it really isn't worth it. If you do choose to use credit cards, be sure to exercise discipline to stay within your budget.

Track Expenses. Track every dollar you spend--cash, checks and credit cards. It doesn't matter if you use money management software, a spreadsheet or the back of an old Christmas card, but be sure to record how you spend. Not only will this keep you on track, but it will also help with returns and with planning for next year.

Beware of the spirit of Christmas Present(s). Retailers spend a lot of time and even more money to help you "get in the spirit". Their hope is that the more spirit you have the more money you will spend. Hold strong against developing an overly generous heart for the wrong reasons. That happy high in your gut at the register will likely be replaced with a spending hangover when the credit card bill arrives.

Tradition & Creativity. Put more emphasis on family tradition than stuff. Most people remember people and events from years past, not the specific gift they got when they were 10. Consider making gifts like baked goods, a personal scrapbook or even a thoughtfully written card.

Start a new tradition. As family members get older and harder to buy for, encourage traditions that move away from gift giving. "Adopt" a local family in need to provide presents for. Volunteer at a soup kitchen or visit a nursing home as a family event. Or start a tradition of drawing names from a hat or engaging in a swap of some kind. This way everyone buys just one gift that is meaningful or fun, and it is the event that becomes memorable.

CHRISTMAS FUTURE

Shop early. Buy next year's holiday decorations on clearance as soon as the holidays are over. Keep your eyes open for bargains throughout the year and stash them away. Beware though: track that spending and don't lose track of what you've bought.

Save all year. Make holiday saving a year round commitment. With a little planning and some discipline, the holidays can truly be a relaxing time to enjoy family, friends and responsible gift-giving.

• Male turkeys (toms) gobble; female turkeys (hens) cluck.
• The fleshy growth under a turkey’s throat is called a wattle. Turkeys also have a long, red, fleshy area that grows from the forehead over the bill called a snood.
• Wild turkeys can fly for short distances up to 55 miles per hour. They can run as fast as 20 miles per hour. Commercially raised turkeys cannot fly.
• More than 45 million turkeys are cooked and 525 million pounds of turkey are eaten during Thanksgiving.
• 90% of American homes eat turkey on Thanksgiving Day. 50% eat turkey on Christmas.
• North Carolina produces 61 million turkeys annually, more than any other state. Minnesota and Arkansas are number two and three.
• Benjamin Franklin, the great American statesman, thought the turkey was so American it should have been chosen as our national symbol rather than the eagle.

Left to Right: Patti Handy, Christine Tonello & Marti Heinbaugh ready to donate

In response to recent announcements made by local area hospitals in the Santa Clarita Valley that blood supplies were running dangerously low, Mission Valley Bank hosted two Blood Drives – Friday, September 28th at the Centre Pointe Branch as well as Monday, October 1st at the Valencia Branch.  More than 50 clients, MVB Team Members & generous community members turned out to roll up their sleeves, give a pint and save a life!  For those able to donate blood, it is an easy way to have a real, positive impact on the community. Mission Valley Bank will be hosting another Blood Drive in January at the Sun Valley Headquarters Office.

Tom Arrendondo of Providence Holy Cross with donor Gary Moore

Each donation has the capacity to save as many as 3 lives, while donated blood only has a 42 day shelf life, donors can give as often as every 56 days.