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Using the Forecaster Model In 2006, geography was destiny - and the metrics were misleading. It was a winning strategy to 'avoid' California and Oregon and 'buy' Texas and Oklahoma. The stocks that the analyst liked did not out-'total return' the stocks the analysts did not like. The low yielders failed to out-return the high yielders. Nor was buying the high P/E stocks or high Price/Book stocks a winning strategy. In a sector where the dividend payout ratio varies from 21% to 80%, it is not a surprise that the dividend discount model fails to be predictive. This sector sells at a fairly consistent P/E ratios despite wide variations in CAGRs. That is not logical. And the CAGRs also fail to be predictive of the stocks with high price to book ratios. That is not logical. I am not giving up hope that this sector can be forecasted. But my readers should be pessimestic about the predictions in the forecaster spreadsheet until it shows more signs of some success. This is the link to the 2006 stats for this sector, showing the projections based on 2006 begining of the year stats - along with the 2006 returns in the 'forecasting' spreadsheet which is the last of five spreadsheet posted - or roughly in the middle of the long page. PCBC Reports EPS [from continuing ops] of $0.44 vs. $0.24 in Q2-06 Business Wire 8-01 Pacific Capital Bancorp Net income for Q2-07 was $33.2 million [$0.70/share] compared with net income of $11.5 million [$0.24/share] in Q2-06. Net income for the second quarter of 2007 included a $23.5 million pre-tax net gain on the sale of CPBC's Indirect Auto Finance and Commercial Equipment Leasing portfolios, as well as charges of $2.5 million related to the exiting of these businesses and other restructuring actions designed to continue streamlining the organization. Excluding those items, net income was $21.0 million [$0.44/share] for Q2-07. Pacific Capital Bancorp's return on average equity (ROE) and return on average assets (ROA) for the second quarter of 2007 were 19.99% and 1.83%, respectively, compared to 7.77% and 0.66%, respectively, for the second quarter of 2006. Excluding the impact of the RAL/RT programs and the one-time items, PCBC's ROE was 9.84% in Q2-07 compared to 8.17% in Q2-06. ROA was 0.94%, compared to 0.56% for Q2-06. Book value per share at the end of Q2-07 was $14.48 compared to $12.78 at the end of Q2-06. Pacific Capital announced that it will restate financial results for Q1-07 as a result of two incorrect postings to the general ledger. Both postings related to the Refund Anticipation Loan (RAL) program. The postings resulted in an $11.2 million overstatement in RAL balances at 3-31-07, a $9.7 million overstatement of interest income, and a $1.5 million understatement of the provision for RAL credit losses. The resulting impact of the restatement is an after-tax decrease in net income of $6.5 million [$0.14/share] for Q1-07. PCBC now reports net income of $51.6 million [$1.09/share] for Q1-07. During the second quarter of 2007, total interest income was $120.4 million, compared with $113.2 million in Q2-06. Excluding the RAL program, total interest income was $116.2 million in Q2-07, compared with $108.4 million in Q2-06. Net interest income for Q2-07 was $66.8 million, compared with $69.4 million in Q2-06. Excluding the RAL program, net interest income was $64.2 million in Q2-07 compared with $66.0 million in Q2-06. Net interest margin for Q2-07 was 4.13%, which compares with 4.44% in Q2-06. Exclusive of RALs in both periods, net interest margin in Q2-07 was 3.89%, compared with 4.13% in Q2-06. Non-interest income was $48.9 million in Q2-07 compared with $22.3 million in Q2-06. Excluding the impact of the RAL/RT programs and gains on the two portfolio loan sales, non-interest income in Q2-07 was $17.3 million, an increase of 19.3% over $14.5 million in Q2-06. Service charges on deposits contributed $4.401 million to non-interest income in Q2-07; Trust and investment advisory fees $5.944 million; Refund transfer fees $6.168 million; Other service charges and fees $6.026 million; Gain on sale of leasing portfolio $24.344 million; and Other income $1.978 million. Exclusive of RALs, total nonperforming assets, which include nonperforming loans and other real estate owned, were $24.4 million, or 0.35% of total assets, at June 30, 2007, compared with $22.5 million, or 0.32% of total assets, at March 31, 2007. Excluding RALs, net charge-offs were $4.1 million for the three months ended June 30, 2007, compared with net charge-offs of $11.9 million for the three months ended March 31, 2007. Annualized net charge-offs to total average loans (both excluding RALs) were 0.29% for the three months ended June 30, 2007, compared with 0.85% for the three months ended March 31, 2007. Ratings & Dividend Changes On 8-06 RBC Capital Markets Upgraded CFR from Sector Perform to Outperform. On 8-07 Friedman Billings Upgraded FHN from Underperform to Market Perform. In a note to clients, Friedman Billings Ramsey analyst Gary Townsend wrote there is minimal downside risk for First Horizon, despite its reliance on mortgage revenue, because of its 6 percent dividend and 1.79-times book multiple. A weak housing market and an illiquid secondary mortgage market will provide headwinds for First Horizon in coming quarters, Townsend said. Mortgages have increasingly gone delinquent in recent months, putting a strain on a banks' ability to sell mortgages to investors. On 8-10 AG Edwards Upgraded UB from Sell to Hold. On 8-23 Merrill Lynch downgraded a raft of mid-cap regional banks citing a range of factors including lower earnings expectations and the potential for margin erosion at some of the banks if the Federal Reserve cuts interest rates. The broker said banks with balance sheets that are very "asset sensitive" -- meaning their assets reprice more quickly than liabilities -- could face margin pressure. It downgraded City National [CYN], Zions Bancorporation [ZION], Associated Banc-Corp [ASBC], Cullen/Frost Bankers [CFR], Cathay General Bancorp [CATY], FirstMerit [FMER], First Midwest Bancorp [FMBI] and Texas Capital Bancshares [TCBI] all to sell from neutral. It also downgraded SVB Financial Group [SIVB] to sell from buy. On 8-30 Punk, Ziegel & Co Upgraded FHN from Sell to Market Perform. On 8-15 FNB raised its dividend to 24 cents, payable 9-15 to shareholders of 9-01-07. On 8-21 HBHC declared a dividend of $0.24 per share, payable 9-14 to shareholders of 9-04-07. On 8-22 WTNY declared a dividend of $.29/share, payable on October 1, 2007 to shareholders of record as of September 14, 2007. On 8-22 ALAB declared a dividend of $0.41/share payable October 3, 2007 to stockholders of record of September 15, 2007. On 7-12 UBS Initiated coverage of RF at Neutral. On 7-26 Citigroup Upgraded CFR from Sell to Hold. On 7-18 CNB declared a dividend of $0.1875/share to be paid 8-10-07 to shareholders of record as of the close of business on 7-27-07. On 7-19 RF declared a quarterly cash dividend of 36 cents/share, payable Oct. 1, 2007, to stockholders of record as of 9-17-07. On 7-20 ZION announced a dividend of 43 cents/share payable 8-22-07 to shareholders of 8-08-07. On 7-23 BOH declared a dividend of $0.41/ share payable 9-14-07 to shareholders of 8-31-07. On 7-25 CYN announced a dividend of $0.46 per share, payable on August 22, 2007 to stockholders of record on August 8, 2007. On 7-25 UB announced a dividend of 52 cents/share to be paid on October 5, 2007, to shareholders of record as of September 7, 2007. On 7-26 BXS announced a dividend of 21 cents per share to be paid Oct. 1 to shareholders of record Sept. 14. On 7-26 CFR declared a dividend of $.40 per share payable September 14, 2007 to shareholders of record on August 31. On 7-27 CBSH declared a dividend of 25 cents per share on Sept. 26 to shareholders of record on Sept. 13. Home Page Factoids Previous Update |