Posts related to ‘Banking’

Big Goldman Sachs (GS) Shareholders Fight Bonuses

A number of large Goldman Sachs (NYSE:GS) shareholders would like to see the firm’s profits in their pockets and not in the bank accounts of the Goldman partners.

The Wall Street Journal reports that many institutions that hold Goldman shares are upset that the firm’s EPS will  be down this year even though the investment bank will post record sales. A great deal of this drop is because Goldman issued 100 million shares to improve its balance sheet. Cutting compensation would rebuild EPS figures which should help drive up the value of the stock. Read More »

Posted on: November 20, 2009 – 4:55 am in Banking, Compensation, ,

The Federal Reserve Vs. Ron Paul

There is a rumor that has been around Hollywood for decades that some of the greatest silent film comedy scripts were created by screen writers who would bribe wardens at a local insane asylum to allow a patient to sit in on their story meetings. Allegedly, some of the most hilarious moments in the history of comedic cinema came out of ideas from the minds of people who spent all of their time on locked wards. Even the craziest person in the world can give birth to an idea which is both brilliant and intelligible. Read More »

Posted on: November 20, 2009 – 4:35 am in Banking, Regulation, ,

AMERITRADE Shelf Registration Spurs E*TRADE Speculation Further (AMTD, ETFC, SCHW)

TD AMERITRADE Holding Corporation (NASDAQ: AMTD) has just filed an automatic shelf registration statement with the SEC today, which many rumor mongers may jump on and point to the notion that this lends more credibility to some buyout rumors from yesterday that it may want to acquire E*TRADE Financial Corporation (NASDAQ: ETFC).  AMERITRADE did not offer any terms nor any size or timing, but the offering is solely for senior debt securities and for subsidiary guarantees.  As with most automatic shelf registrations, no underwriters were mentioned by name.
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Posted on: November 19, 2009 – 11:38 am in Banking, Brokerage Firms, Financial Stocks, Mergers and Buy Outs, Rumors, , ,

Mitsubishi UFJ (MTU): Banks Have Access Capital Markets

Large U.S. banks have raised money to improve their capital position this year, in some cases because the government required them to do so. Bank analysts have worried that a wave of write-downs on commercial real estate and credit card debt might require some big financial firms to go back to the funding well. That raises the question of whether institutional investors still have any appetite for putting money into global banks.

Those concerns about bank funding may have been allayed a bit. Mitsubishi UFJ (NYSE:MTU), the largest bank in Japan and a major investor in Morgan Stanley (NYSE:MS), is raising $11 billion. The firm has already filed papers with Japan’s Ministry of Finance to sell common shares.

Read more…

Posted on: November 18, 2009 – 1:33 pm in Banking, ,

Risks in Geithner’s Call For More Lending

U.S. Treasury Secretary Timothy Geithner spoke this morning and has effectively called for banks which have received government bail-out funds to boost their lending activities.  Geithner noted that a lack of lending and strict limits to credit might act as a buffer against a continued recovery.

The Obama administration is trying to come up with new ways to turn the credit back on for small businesses.  It is no wonder that Goldman Sachs Group (NYSE: GS) launched its initiative this morning.  The firm’s public relations and financial relations campaign is a $500 million 10,000 Small Businesses initiative aimed at fostering small business growth and job-creation for up to 10,000 small businesses.  The company plans to offer business education, mentorships, business networks, and capital.

Geithner noted that banks need “to be working with us, not against recovery.”  He also noted that it was taxpayers saving the banks rather than their great intelligence and efforts that has led to the return of bank earnings, and he said banks have some responsibility and are obliged to assist in the recovery of communities.  But, Geithner also defended banking sector earnings.  It has been noted how lending standards have tightened month after month.  Where this gets interesting though is in evaluating credit risks and interpolating that data for risks ahead.

Read More »

Posted on: November 18, 2009 – 12:16 pm in Banking, Economy, Financial Stocks, Politics, Regulation,

$1 Salary For Pandit: Citigroup Gets What It Paid For

The most charitable thing that can be said about Vikram Pandit, the CEO of Citigroup (NYSE:C) since December 11. 2007, is that he was in the wrong place at the wrong time. The bank’s stock is down 90% since his first day as chief executive. The shares of other large international banks were battered by the credit crisis, but JP Morgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) have gained most of their value back during the two-year period. Bank of America (NYSE:BAC), the most hapless of all the large financial firms, has even performed better than Citi in the market. Read More »

Posted on: November 18, 2009 – 5:06 am in Banking, Compensation, , , , , , , ,

Paulson Takes Huge Stake In Citigoup, Dumps Goldman

Money ImageJohn Paulson is rather notorious, and wealthy, for how much he picked up by shorting financial stocks on the way down.  But the financial world found out in August that Paulson & Co. had bought up many key financial and banking stocks.  Paulson & Co. Inc. is out with a 13-F filing after the close showing he is still in many key financial stocks.

The famed hedge fund manager took a massive stake in Citigroup and sold his entire interest in Goldman Sachs

  • Bank of America (NYSE: BAC) was listed as 159,794,229 shares, down from 167,990,464 shares.
  • Capital One Financial Corp. (NYSE: COF) was static as a stake of 17,000,000 shares of common stock.
  • Citigroup Inc. (NYSE: C) is listed as 300,000,000 (three-hundred million) of common stock.
  • Fifth Third Bancorp (NASDAQ: FITB) was static as a 5,000,000 share stake.
  • First Horizon National Corp. (NYSE: FHN) was 7.11 million, up from a stake of 3,000,000 shares in August.
  • JPMorgan Chase & Co. (NYSE: JPM) was down to 2,000,000 shares, down from an August stake of 7,000,000 shares of common stock.
  • Marshall & Ilsley Corp. (NYSE: MI) was static at 12,000,000 shares of common stock.
  • People’s United Financial Inc. (NASDAQ: PBCT) was static at 2,750,000 shares of common stock.
  • Regions Financial Corp. (NYSE: RF) was static at 35,000,000 shares of common stock.
  • SunTrust Bank Inc. (NYSE: STI) was static at 1,500,000 shares of common stock.

We had also noted back in October how Conseco, Inc. (NYSE: CNO) had scored a Paulson investment.

Goldman Sachs Group Inc. (NYSE: GS) was NOT in the new filing compared to the August filing where he listed 2,000,000 shares of common stock in the August filing.  State Street Corp. (NYSE: STT) was NOT in the filing versus a stake of 700,000 shares of common stock in August.

JON C. OGG

Posted on: November 13, 2009 – 5:50 pm in Activist Investor, Banking, Financial Stocks, , , , , , , , , , , ,

Corzine as Bank of America CEO? (GS, BAC)

B of A LogoJon Corzine recently lost the gubernatorial race in New Jersey.  He is also a very wealthy Wall Streeter that is a former disciple of Goldman Sachs Group Inc. (NYSE: GS).  He is also a democrat that is very friendly with the Obama administration.   And now the strange rumor mill is getting stranger….

Charlie Gasparino on CNBC just threw out the idea that Corzine could potentially be in the running for the CEO role at Bank of America Corp. (NYSE: BAC) as the replacement for Ken Lewis….. after he touted his book again.  Gasparino noted that he asked Bank of America about this and the ‘rumor’ was not denied but was given a ‘no comment’ answer which Gasparino expanded upon.

In this new world under the ‘new normal’ it seems that anything is possible.

JON C. OGG

Posted on: November 12, 2009 – 10:28 am in Banking, Financial Stocks, Management Change, Politics, Rumors, Turnarounds, ,

Dodd’s Follies: The Most Complex Financial Regulatory System In The World

bankSenator Christopher Dodd put out his draft bill which calls for the most significant overhaul in government financial regulation is over a century. The “Restoring American Financial Stability” document has 1,136 pages, but one of the first major statements in the bill should make the balance of the proposal academic. The new legislation, among other things, means to “Enforce Regulations On The Books.” Those who drafted the bill describe this as allowing “regulators to aggressively pursue financial fraud, conflicts of interest and manipulation of the system that benefit special interests at the expense of American families and businesses.” Read More »

Posted on: November 11, 2009 – 4:48 am in Banking, Regulation

9 Of 10 Bank Holding Companies Make The Cut

Yesterday, the Federal Reserve reported that 9 out of 10 bank holding companies that were required to raise additional capital to bolster their balance sheets have successfully done so.  The Supervisory Capital Assessment Program (SCAP) had determined in May that these needed to raise $74.6 billion by November 9th.  This was achieved through new issuance of equity in the amount of $39 billion, conversion of existing preferred equity to common equity amounting to $23 billion, and the sale businesses and assets amounting to 9$ billion.  The ten bank holding companies that were required to raise additional capital were: Banks of America (NYSE: BAC), Citigroup (NYSE: C), Fifth Third Bancorp (NASDAQ: FITB), GMAC LLC, KeyCorp (NYSE: KEY), Morgan Stanley (NYSE: MS), PNC Financial Services (NYSE: PNC), Regions Financial (NYSE: RF), SunTrust (NYSE: STI), and Wells Fargo (NYSE: WFC).

Of the ten the one laggard was GMAC, which failed to raise the necessary funds.  The May SCAP report indicated that GMAC needed to buffer its balance sheet with an additional $11.5 billion in Tier 1 capital.  The Federal Reserve expects the troubled mortgage and auto loan originator to fill in its funding gap by accessing the TARP Automotive Industry Financing Program.

Garrett W. McIntyre

Posted on: November 10, 2009 – 9:08 am in Banking, Financial Stocks, , , , , , , , , , ,

Banks Intend To Buckle Down In The Face of Credit Card Legislation

In the FED’s most recent bank survey they asked how the banks indented to deal with the Credit CARD Act of 2009.  The Act meant to protect users from sudden interest rate spikes on their credit cards.  Its main provisions limit when lenders can raise rates on existing balances and also require lenders to alert card holders of increases.  

bankOf the banks surveyed, 75% of respondents did not expect to be in compliance with the legislation until February 2010 when most of the Act takes effect.  Banks reported that they intended to, or already have, tighten the terms of credit card loans to both prime and nonprime borrowers.  About half of the respondents indicated that they would increase interest rates and reduce credit limits for prime borrowers.  A bit less than half intend to raise the minimum credit score required to obtain a loan.  75% of respondents indicated that they would raise rates on nonprime borrowers.   Read More »

Posted on: November 10, 2009 – 8:22 am in Banking, Economy, , ,

United Security Of Sparta Georgia Is 116th Bank Failure Of 2009

bearUnited Security Bank, Sparta, Georgia, was closed by the Georgia Department of Banking and Finance, which appointed the FDIC as receiver.

The two branches of United Security Bank will reopen during their normal business hours as branches of Ameris Bank.

According to the FDIC as of September 14, 2009, United Security Bank had total assets of $157 million and total deposits of about $150 million. Ameris Bank will pay the FDIC a premium of 0.36 percent to assume all of the deposits of United Security Bank. In addition to assuming all of the deposits of the failed bank, Ameris Bank agreed to buy essentially all of the assets.

The FDIC and Ameris Bank entered into a loss-share transaction on about $123 million of United Security Bank’s assets.

Douglas A. McIntyre

Posted on: November 6, 2009 – 5:35 pm in Banking

Buffett & Berkshire Earn Dough (BRK-A, BRK-B, BNI, MCO)

buffettimage-gates-foundationWarren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) has just reported its Q3-2009 earnings ahead of the formal expectations.  This will be perhaps one of the last similar earnings reports with a relative comparisons because of its recent acquisition of Burlington Northern Santa Fe (NYSE: BNI).  The ongoing selling of Moody’s Corp. (NYSE: MCO) will be very limited in comparison to what change the railroad addition will make.

We were expecting the insurance operations to have a stellar quarter because there were no real storms that made landfall this year in hurricane season.  Thomson Reuters figures are hard to rely upon because of two issues.  There are very few ‘official estimates’ and there are many items inside the Berkshire Hathaway earnings that Buffett includes outside of what other companies include.  The consensus estimates was listed as $1,308.25 per share, but that is again a difficult number to use as a formal estimate.  Net earnings per share was $2,087 and operating earnings were $1,325 per share.  The key metrics are what we want to focus on today.

Read More »

Posted on: November 6, 2009 – 5:10 pm in Banking, Buffett, Conglomerates, Earnings, , , ,

Is Citi’s Primerica IPO For You (C, MS)

It has been some time in the making and won’t be the last IPO or divestiture out of Citigroup Inc. (NYSE: C).  The company is proceeding to divest its Primerica Inc. via an initial public offering.
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Posted on: November 6, 2009 – 12:36 pm in Banking, Financial Stocks, IPOs, ,

US Guaranteed $4.5 Trillion In Financial Assets Creating Huge Taxpayer Risk

GeithnerThe Congressional Oversight Panel has issued its latest report on how the government’s huge bailout of the financial system is going. The most startling part of the document is that it describes the federal government’s $4.5 trillion guarantee of financial assets which put huge sums of taxpayer money at risk and, according to the panel, created a significant “moral hazard” which could encourage banks to return to risky behavior in anticipation that the government will always provide them with a safety net. Read More »

Posted on: November 6, 2009 – 6:13 am in Banking

Mozilo Can’t Dodge Fraud Charges

bearAngelo Mozilo, the former CEO of Countrywide Financial which was bought by Bank of America (NYSE:BAC), tried to get out of facing government fraud charges, US District Judge John Walter told Mozilo that he will indeed stand trial despite his efforts to get the case dismissed.

The SEC case against Mozilo seems simple. He knew that his company was in financial trouble but sold stock in Countrywide and made $140 million. Those charges may be hard to prove. Read More »

Posted on: November 5, 2009 – 6:06 am in Banking,

The Fed Asks Banks To Read Its Mind

bankBankers from the nation’s 28 largest banks were called to regional Federal Reserve offices across the country today to get a message from the agency. That message was that they should not wait for new guidelines that will align banker pay with risk. They should guess what the guidelines will be and apply them to 2009 pay packages. Bankers have not been very good at being bankers for the last two years and asking them to be clairvoyants as well seems too much. Read More »

Posted on: November 3, 2009 – 4:58 am in Banking, Regulation

CIT Highlights Risks in Junkier Financial Stocks (CIT, FNM, FRE, ABK, C, ETFC, AIG, PMI)

Burning Money PicIt is of little surprise that CIT Group, Inc. (NYSE: CIT) is seeing clobbered today.  The company has finally filed its pre-packaged Chapter 11 bankruptcy package and that has CIT shares down a sharp 63% at $0.26 on triple its average volume.  By now, the game is probably known by everyone that bankruptcy usually leaves shareholders of common stock out in the cold.  Should it be of any surprise that the “other troubled financial stocks” are seeing their shares head south?

It was just a week ago that I discussed the Fannie-Freddie equity conundrum.  Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) are down further.  After all, these two are in government conservatorship.  It is even easy to argue that these are just being kept alive so that Uncle Sam doesn’t have to include the obligations on the Fed’s balance sheet.  And how many investors in these companies really believe that they are holding anything more than a long-term warrant or LEAP option that is way out of the money?  Fannie Mae is down 7.4% at $1.00 and Freddie Mac is down almost 9% at $1.12, and neither are on active volume today.
Read More »

Posted on: November 2, 2009 – 3:36 pm in Banking, Financial Stocks, Trading Alert, , , , , , , ,

New Commercial Real Estate Accounting Rules: Cooking The Books

bankNew guidelines for examining commercial real estate loans issued by the FDIC appear to allow examiners to go easy on banks as they account for what would be, under many circumstances, considered non-performing commercial real estate loans. This may help banks with their balance sheets and solvency, but it also misleads bank investors and the public about the seriousness of the huge problem in the commercial real estate lending business.

The new FDIC directive says ”Financial institutions that implement prudent CRE (commercial real estate) loan workout arrangements after performing a comprehensive review of a borrower’s financial condition will not be subject to criticism for engaging in these efforts even if the restructured loans have weaknesses that result in adverse credit classification.” Read More »

Posted on: October 31, 2009 – 7:50 am in Banking

Nine More US Banks Fail

bearNine more banks failed and the pace of the closures appears to have quickened. The number of banks that would fail next year is more than four hundred if the current  is maintained.  Some analysts say that they expect more than 500 financial firms go under due to the recession.

The FDIC listed North Houston Bank, Houston, TX , Madisonville State Bank, Madisonville, TX, Citizens National Bank, Teague, TX , Park National Bank, Chicago, IL ,  Pacific National Bank, San Francisco, CA,  California National Bank, Los Angeles, CA,  San Diego National Bank, San Diego, CA  Community Bank of Lemont, Lemont, IL   and Bank USA, NA, Phoenix, AZ as those that went under. Read More »

Posted on: October 31, 2009 – 7:09 am in Banking