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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. ALAB Reports EPS [from continuing opserations] of $0.95 vs. $1.06 in Q3-06 PRNewsWire 10-23 Alabama National BanCorporation reported net income of $19.8 million [$0.95/share]. Excluding the discontinued insurance operations from all periods, ANB reported earnings from continuing operations of $19.8 million, down 1.4% from Q3-06's $20.1 million [$1.06/share]. Diluted cash earnings per share (continuing operations) were $0.99 in Q3-07 as compared with $1.10 in Q3-06. ROA was 1.04% compared to 1.22% in Q3-06. ROE was 14.25% compared to 17.00% in Q3-06. Book value was $43.19. Net interest income was $63.731 million compared to $58.196 million in Q3-06. FTE net interest margin declined to 3.63%, down from the 3.72% reported in Q2-07. Noninterest income was $21.354 million compared to $18.736 million in Q3-06. ANB recognized $2.7 million in net charge-offs for Q3-07 representing 0.19% of loans on an annualized basis. As a percentage of period-end loans and other real estate owned, nonperforming assets rose to 0.49% as compared with 0.18% in the year ago quarter and 0.32% in the quarter ended June 30, 2007. BOKF Reports EPS of $0.89 vs. $0.78 in Q3-06 Business Wire 10-16 BOK Financial reported Q3-07 earnings of $59.848 million [$0.89/share] compared to $52.660 million [$0.78/share] in Q3-06. Net income totaled $52.7 million [$0.78/share] compared to $53.9 million [$0.80/share] for Q2-07. ROA in Q3-07 was 1.22% compared to 1.24% in Q3-06. ROE in Q3-07 was 13.04% compared to 12.90% in Q3-06. Book value per share at the end of Q3-07 was $27.86 compared to $24.98 at the end of Q3-06. Net interest revenue totaled $139.4 million for Q3-07, up $15.5 million or 12% over Q3-06 and $4.5 million or 13% annualized over Q2-07. Net interest margin was 3.27% for Q3-07 compared with 3.38% for Q3-06 and 3.31% for Q2-07. Total tax-equivalent yield on earning assets in Q3-07 was 6.99% compared to 7.00% in Q2-07, 7.02% in Q1-07, 6.93% in Q4-06 and 6.91% in Q3-06. Total interest-bearing deposits cost 3.72% in Q3-07, 3.69% in Q2-07, 3.72% in Q1-07, 3.67% in Q4-06 and 3.54% in Q3-06. Total fees and commissions in Q3-07 were $105.835 million compared to $93.011 million in Q3-06. Brokerage and trading revenue was $15.541 million in Q3-07; Transaction card revenue $23.812 million; Trust fees and commissions $19.633 million; Deposit service charges and fees $27.885 million; Mortgage banking revenue $8.671 million; Life insurance $2.520 million. Total nonperforming assets in Q3-07 were $55.944 million [0.48% of loans] compared to $40.862 million [0.41% of loans] in Q3-06. Net charge-offs in Q3-07 were $4.869 million [0.17% of loans] compared to $4.296 million [0.18% of loans] in Q3-06. BOH Reports EPS of $0.96 vs. $0.92 in Q3-06 Business Wire 10-22 Bank of Hawaii reported earnings of $47.8 million [$0.96/share] for Q3-07 compared to $46.9 million [$0.92/share] in Q3-06. ROA in Q3-07 was 1.79% compared with 1.81% in Q3-06. ROE in Q3-07 was 26.02% compared with 27.09% in Q3-06. Book Value per share at the end of Q3-07 was $14.91 compared to $13.72 at the end of Q3-06. FTE Net interest income for Q3-07 was $98.8 million compared to $100.5 million in Q3-06. The net interest margin was 4.03% compared to 4.20% in Q3-06. Total Earning Assets in Q3-07 were $9.719 billion earnings $452.4 million at an average yield of 6.21%. Total Interest-Bearing Deposits were $6.010 billion costing $104.7 million at an average yield of 2.33%. Total Interest-Bearing Liabilities were $7.421 billion costing $156.1 million at an average yield of 2.81%. Noninterest income was $61.2 million for Q3-07, an increase of $4.4 million or 7.7 percent compared to $56.9 million in Q3-06. Trust and Asset Management income in Q3-07 was $15.146 million; Mortgage Banking $3.848 million; Service Charges on Deposit Accounts $11.919 million; Fees, Exchange, and Other Service Charges $16.465 million; and Insurance 7.446 million. Non-performing assets were $4.3 million [0.06% of total loans and leases] at the end of Q3-07 compared to $5.4 million [0.08% of loans and leases] at the end of Q3-06. Net charge-offs for were $4.1 million [0.25% of total average loans and leases] compared with net charge-offs of $2.8 million [0.17$] for Q3-06. BXS Reports EPS of $0.44 vs. $0.30 in Q3-06 PRNewsWire 10-23 BancorpSouth announced net income for Q3-07 of $36.3 million [$0.44/share] compared with $23.9 million [$0.30/share] for Q3-06. ROA in Q3-07 was 1.10% compared to 0.80% in Q3-06. ROE was 12.60% compared to 9.33% in Q3-06. Book value per share at the end of Q3-07 was $14.22 compared to $12.95 at the end of Q3-06. Net Interest revenue for Q307 was $107.9 million compared to $96.4 million for Q3-06. Net interest margin was 3.66% for Q3-07 compared with 3.66% for Q3-06 and 3.69% for Q2-07. The average taxable equivalent yield on earning assets increased to 6.98% for Q3-07 from 6.58% for Q3-06 and 6.94% for Q2-07. The average rate paid on interest bearing liabilities was 3.92% for Q3-07, compared with 3.49% for Q3-06 and 3.86% for Q2-07. For Q3-07, noninterest revenue increased 17.6% to $57.9 million from $49.2 million for Q3-06. Credit card, debit card and merchant fees in Q3-07 were $7.667 million; Service charges $17.281 million; Trust income $2.487 million; and Insurance commissions $17.542 million. Annualized net charge-offs were 0.13% of average loans and leases for Q3-07 compared with 0.07 percent for Q3-06 and 0.14% for Q2-07. Non-performing loans and leases increased 24.8% to $31.3 million, or 0.35% of loans and leases, at September 30, 2007 from $25.1 million, or 0.32% of loans and leases, at September 30, 2006. CBSH Reports EPS of $0.81 vs. $0.77 in Q3-06 Business Wire 10-16 Commerce Bancshares announced earnings of $55.9 million [$.81/share] for Q3-07 compared to $54.5 million [$.77/share] in Q3-06. ROA was 1.43% compared to 1.50% in Q3-06. ROE 15.10% compared to 15.64% in Q3-06. Book value per share at the end of Q3-07 was $21.79 compared to $20.55 at the end of Q3-06. Taxable equivalent net interest income in Q3-07 was $137.357 million compared to $130.621 million in Q3-06. FTE Net yield on interest earning assets in Q3-07 was 3.77% compared to 3.84% in Q3-06. Non-interest income in Q3-07 was $95.137 million comapred to $87.332 million in Q3-06. Deposit account charges and other fees in Q3-07 were $30.148 million; Bank card transaction fees $26.409 million; and Trust fees $19.823 million. Total Non-Performing Assets were $41.370 million [.40% of loans] compared to $20.224 million [.21% of loans] in Q3-06. Net loan charge-offs for Q3-07 amounted to $11.5 million, compared with $9.1 million in Q2-07 and $7.9 million in Q3-06. CFR Reports EPS of $0.95 vs. $0.88 in Q3-06 PRNewsWire 10-24 Cullen/Frost Bankers reported Q3-07 earnings of $56.5 million [$0.95/share] compared to the $50.0 million [$0.88/share] for Q3-06. ROA in Q3-07 was 1.72% compared to 1.72% in Q3-06. ROE in Q3-07 was 16.44% compared to 18.56% for Q3-06. Book value at the end of Q3-07 was $23.74 compared to $20.08 at the end of Q3-06. FTE Net-interest income for Q3-07 was $134.7 million compared to $121.1 million for Q3-06.The net interest margin was 4.69% for Q3-07, flat when compared to Q3-06, and down three basis points from 4.72% for Q2-07. Of the $10.096 billion in total deposites $3.603 billion were non-interest-bearing. Total commercial and industrial loans were $3.453 billion [46.3% of total loans]. Total real estate $3.605 billion [48.3% of loans] of which Commercial mortgages made up $1.892 billion. There were no NPAs in their portfolio of 150 builders. Total Earning Assets in Q3-07 were $11.312 billion earning 591.426 million at an average yield of 6.95% compared to $10.059 billion earnings $509.170 million at an average yield of 6.72% in Q3-06. Total Interest-Bearing Funds in Q3-07 were $7.931 billion costing $192.500 million at an average cost of 3.24% compared to $6.925 billion costing $154.051 million at a cost of 2.97% in Q3-06. Non-interest income for Q3-07 was $70.8 million compared to $60.6 million for Q3-06. Trust income rose to $17.7 million; Service charges on deposit accounts were $20.7 million; and Insurance commissions and fees were $7.695 million. Net charge-offs in Q3-07 were $9.592 million [0.51% of average loans] compared to $1.596 million [0.10%] in Q3-06. Non-performing assets [which are Non-accrual loans plus Foreclosed assets] were $26.379 million [0.35% of loans or 0.20% of assets] compared to $35.016 million [0.54% and 0.30%] in Q3-06. CNB Reports EPS of $0.45 vs. $0.44 in Q3-06 Business Wire 10-17 The Colonial BancGroup reported Q3-07 Net income of $69.335 million [$0.45/share] compared to $68.032 million [$0.44/share] for Q3-06. ROA in Q3-07 was 1.15% compared to 1.19% in Q3-06. ROE was 12.65% compared to 13.51% in Q3-06. Book value per share at the end of Q3-07 was $14.16 compared to $14.04 at the end of Q2-07 and $13.21 at the end of Q3-06. Net interest income in Q3-07 was $196.011 million compared to $ 190.552 million in Q3-06. The net interest margin was 3.65% compared to 3.66% for Q2-07. Total interest earning assets were $21.584 billion earnings $397.478 million at an average yield of 7.32%. Total interest bearing liabilities were $18.241 billion costing $199.522 million at an average yield of 4.34%. Total noninterest income in Q3-07 was $52.958 million compared to $45.962 million in Q3-06. Service charges on deposit accounts in Q3-07 were $19.376 million; Electronic banks $4.923; Financial plannsing servies $4.506 million; Mortgage banking origination and sales $3.236 million; Mortgage warehouse fees $5.936 million; and life insurance $5.070 million. Total nonperforming assets at the end of Q3-07 were $70.153 million [0.46% of loans] compared to $15.719 million [0.10% of loans] in Q3-06. Total charge-offs in Q3-07 were $13.774 million [0.18% of loans] compared to $6.809 million [0.27% of loans] in Q3-06. CYN Reports EPS of $1.22 vs. $1.20 in Q2-07 Prime NewsWire 10-17 City National reported Q3-07 net income of $60.1 million [$1.22/share], up from $59.0 million [$1.20/share] for Q3-06. ROA was 1.53% compared to 1.61% in Q3-06. ROE was 14.69% compared to 16.30% in Q3-06. Book value at the end of Q3-07 was $33.99 compared to $30.40 at the end of Q3-06. FTE net interest income reached $158.1 million in Q3-07, compared with $152.8 million for Q3-06. The net interest margin was 4.42% compared with 4.53% in Q3-06 and 4.47% in Q2-07. The 5 basis-point decline from the second quarter of this year was due primarily to loan growth and a decline in demand deposits related to the title and escrow business. Noninterest income reached $81.2 million in the third quarter of 2007, a 26% increase from the same period one year ago. Excluding the second-quarter acquisition of Convergent Wealth Advisors and the previously disclosed disposition of another investment affiliate in Q4-06, third-quarter noninterest income grew 15% from Q3-06. Trust and investment fees were $37.488 million in Q3-07; Brokerage and mutual fund fees $15.546 million; Cash management and deposit transaction fees $8.801 million; and International services fees were $7.995 million. At September 30, 2007, nonaccrual loans [NPAs] were $26.2 million, compared with $18.8 million in Q3-06 and $22.3 million in Q2-07. Net loan charge-offs were $3.6 million in Q3-07, compared with net recoveries of $1.9 million in Q3-06 and net charge-offs of $2.3 million in Q2-07. Nonperforming assets to Total loans ratio was 0.23% compared to 0.19% in Q3-06. NPAs to total assets ratio was 0.17% compared to 0.13% in Q3-06. FHN Reports EPS of - $0.11 vs. $0.45 in Q3-06 Prime NewsWire 10-17 First Horizon National announced a net loss of $14.2 million [$.11/share] compared to a gain of $67.110 million [$0.45/share] in Q3-06. ROA in Q3-07 was (.15)% compared to 0.67% in Q3-06. ROE was (2.31)% compared to 10.90% in Q3-06. FHN's release did not include book value - but the value at Yahoo Finance was listed as $19.16 compared to $19.43 at the end of Q2-07 and $20.06 at the end of Q3-06. Net interest income in Q3-07 was $237.804 million compared to $251.621 million in Q3-06. FTE net interest margin improved to 2.87% from 2.79% in Q2-07 and 2.89% in Q3-06. Noninterest income was $203.475 million. The net charge-off ratio was 57 basis points in Q3-07 compared to 41 basis points in Q2-07 as net charge-offs increased to $31.4 million from $23.0 million in Q2-07. The nonperforming asset ratio increased to 113 basis points in Q3-07 from 81 basis points in Q2-07. FNB Reports EPS of $0.29 vs. $0.29 in Q3-06 PRNewsWire 10-18 F.N.B. Corporation reported Q3-07 net income was $17.6 million, or $0.29 per diluted share, the same as Q2-07 and Q3-06. ROE was 13.0% compared to 12.96% in Q3-06. ROA was 1.15% compared to 1.15% in Q3-06. Book value per share at the end of Q3-07 was $8.94 compared to $8.94 at the end of Q3-06. FTE net interest income was $46.551 million compared to $46.920 million in Q3-06. The net interest margin was 3.73%, which is unchanged from Q2-07 and represents the fourth consecutive quarter of a stable or expanding net interest margin. Non-interest income was $19.682 million compared to $20.012 million in Q3-06. Service charges in Q3-07 were $10.286 million; Insurance commissions and fees $3.301 million; Securities commissions and fees $1.595 million; and Trust income $2.109 million. Annualized net loan charge-offs for Q3-07 were 27 basis points of average loans, representing a 3 basis point increase from Q2-07 and a 4 basis point rise from Q3-06. The ratio of non-performing loans to total loans was 57 basis points at September 30, 2007, a 1 basis point increase from 56 basis points at June 30, 2007, but a 12 basis point improvement from 69 basis points at September 30, 2006. HBHC Reports EPS of $0.56 vs. $1.08 in Q3-06 Business Wire 10-18 Hancock Holding Company reported earnings of $17.7 million, a decrease of 50.8% from Q3-06. EPS was $0.55, a decrease of $0.52 from Q3-06. ROA 1.21% compared to 2.36% in Q3-06. ROE was 12.58% compared to 27.58% in Q3-06. Book value at the end of Q3-07 was $17.55 compared to $16.64 at the end of Q3-06. FTE net interest income in Q3-07 was $53.566 million compared to $59.287 million in Q3-06. The FTE net interest margin was 4.06% in Q3-07, 23 basis points narrower than the same quarter a year ago and 11 basis points narrower than the previous quarter. Average earning assets in Q3-07 were $5.258 billion earnings $90.033 million at an average yield of 6.81%. Total Cost of Funds was $36.467 million on $5.258 of liabilities at an average yield of 2.75%. Total interest bearing liabilites were $4.250 billion at an average yield of 3.40%. Non-interest income was $30.485 million compared to $25.627 million in Q3-06. Service charges on deposit accounts were $11.085 million; Trust fees $3.892 million; Debit card & merchant fees $2.025 million; Insurance fees $4.256 million; and Investment & annuity fees $2.253 million. Net charge-offs were $1.9 million [0.21% of average loans] compared to $2.61 million [0.34% of average loans] in Q3-06. Non-performing assets as a percent of total loans and foreclosed assets was 0.28% at September 30, 2007, compared to 0.25% at June 30, 2007. PCBC Reports EPS of $0.08 vs. $0.36 in Q3-06 Business Wire 11-01 Pacific Capital Bancorp reported Q3-07 net income of $3.9 million [$0.08/share] compared with $16.8 million [$0.36/share] for Q3-06. Excluding the impact of the Refund Anticipation Loan and Refund Transfer programs, net income was $18.4 million [$0.39/share] compared with $12.3 million [$0.26/share] for Q3-06. ROE was 2.28% compared to 11.26% in Q3-06. ROA was 0.21% compared to 0.93% in Q3-06. Excluding the impact of the RAL/RT programs, ROE was 14.01% compared with 10.33% in Q3-06 and ROA was 1.05% compared with 0.71 in Q3-06. Book value at the end of Q3-07 was $14.35, $14.48 at the end of Q2-07 and $13.29 at the end of Q3-06. Net interest income for Q3-07 was $60.0 million compared with $62.6 million in Q3-06. The decline in net interest income is primarily attributable to the impact of higher borrowings incurred to support loan growth and higher rates paid on deposits and those borrowings. Net interest income was also impacted by the sale of the Company’s Indirect Auto and Commercial Equipment Leasing portfolios in Q2-07. Net interest margin was 3.65% compared with 3.90% in Q3-06. Exclusive of RALs in both periods, net interest margin was 3.64% compared with 3.87% in Q3-06. The decline in net interest margin is primarily attributable to the impact of PCBC's divestiture of the Indirect Auto and Commercial Equipment Leasing portfolios. Total earning assets in Q3-07 were $7.104 billion earnings $475.309 million at an average yield of 8.95%. Total interest-bearing liabilities were $5.649 billion costing $169.561 million at an average yield of 4.01%. Non-interest income was $17.3 million in Q3-07 compared with $17.3 million in Q3-06. PCBP recorded a provision for credit losses of $24.4 million in Q3-07 and $22.4 million of the provision relates to additional customer and tax preparer fraud experienced in the 2007 RAL program. Service charges on deposits in Q3-07 were $4.446 million and Trust and investment advisory fees $6.009 million. Exclusive of RALs, total nonperforming assets, which include nonperforming loans and other real estate owned, remained virtually unchanged at $25.7 million, or 0.36% of total assets, at September 30, 2007, compared with $24.4 million, or 0.35% of total assets, at June 30, 2007. Excluding RALs, net charge-offs were $3.2 million compared with net charge-offs of $4.1 million for Q2-07. Annualized net charge-offs to total average loans (both excluding RALs) were 0.23% for Q3-07 compared with 0.29% for Q2-07. PRSP Reports EPS of $0.54 vs. $0.49 in Q3-06 PRNewsWire 10-23 Prosperity Bancshares reported net income for Q3-07 of $23.848 million [$0.54/share] compared with $16.364 million [$0.49/share for Q3-06. ROA was 1.53% compared to 1.46% in Q3-06. ROE was 8.67% compared to 10.17% at the end of Q3-06. Book value per share at the end of Q3-07 was $25.19 compared to $19.83 at the end of Q3-06. Net interest income before provision for credit losses for Q3-07 increased 42.8%, to $51.369 million compared with $35.967 million during Q3-06. The increase was attributable primarily to a 32.7% increase in average earning assets primarily due to the TXUI and Navasota acquisitions and internal growth. The annualized net interest margin (tax equivalent) was 4.07% for the quarter ended September 30, 2007 compared with 3.77% for Q3-06 and 4.09% for Q2-07. Total interest earning assets were $5.087 billion at an average yield of 6.86%. Total interest bearing liabilities were $3.896 billion at an average cost of 3.73%. Non-interest income increased $5.241 million or 58.8% to $14.159 million for Q3-07 compared with $8.918 million for Q3-06. The increase was attributable primarily to deposit service charges on the increased number of deposit accounts as a result of the additional banking centers acquired in January and August 2007. Service charges on deposit accounts was $10.785 million of the $14.159 million in non-interest income. Net charge-offs were 0.04% of average loans for the quarter ending September 30, 2007 and 0.01% of average loans for the quarter ending September 30, 2006. Non-performing assets totaled $9.499 million or 0.19% of average earning assets at September 30, 2007 compared with $1.270 million or 0.03% of average earning assets at September 30, 2006. The non-performing assets at September 30, 2007 consisted of eighty-seven (87) separate credits or ORE properties. We continue to move quickly to resolve problem assets. As of today, twenty-seven (27) credits representing approximately $4.6 million of the non-performing assets as of September 30, 2007 have been sold, are under contract to be sold, have been paid off or are otherwise resolved. From the Conference Call: Jennifer Benba of Sun Trust want a projection on margin going forward? PRSP: Should be stable over next 12 months. If loan growth continues, it should be even higher. Jennifer inquired about the economy. PRSP: Texas is a bright spot - Population growth with a good economy. But we are becoming more cautious. There is a slight slow down in houseing at the lower end of the market. Erica Penoba of Merrill Lynch asked for the credit dynamics of residential construction portfolio. RPSP: Average value in construction portfolio? It's $350K to $500K range. second home or move up homes. Are you geeting more worried? PRSP: We have never been in starter homes. In the market places we serve - the homes have stated at 2580K. The softness that we are seeing is centered in lower priced homes. And we have little exposure there. Energy business is why we are insalated. We have not over-built in Houston. Erica: What are you assuming about the fed? PRSP: If fed drops this month another 25 - it would not be the end of the world. If fed drops 100 or more - that would be a prooblem. Bret Falam of Fitt Partners - funding mix - borrowing up - what in Q4 - decline in deposits? In Q3 - it was seasonality of deposits. Repo's - that is where our customers ar moving money in - we are not sollicting repos. These are long term customers. If we did not have sweep account - it would be in a money market account. What is M&A environment? If you are buying, then we see better opportunites - with better pricing from the sellers. Bain Slack of KBW - monthly loan production numbers - it has been increasing up till Q3? It that caution of lack of demand? Several factors - we have reduced NPAs considerabily, and attention of bank managers towards that goal. that focus has taken people away from loan production. The economy - which is still good, but not as good as it has been. There is slght decreawse in loans we are seeing. And we are being more prudent on approvals. Excess capital to M&A or buybacks? culd be either. Barry McCarver of Stephens Inc - comments on M&A - pricing geting more realistic - is that driven by credit quality. PRSP: The guys that buy banks [1] their stock is now trading lower - and that influences prices. [2] The slowing pace of the general economy serves to lower bank prices. McCarver: The asset quality had dipped for some target banks - would you concider a deal to cheaply urchase some problem assets? PRSP: Sometimes we look at those deals. We have a track record of cleaning up problem loans. And our last acquisition had lower quality loans. But until those old problems have been worked through and we have a clean blanace sheet, we would be more reluctant to do that kind of deal. Bob Patton of Morgan Keegan ask if there was any weakness in Texas, where would it be? PRSP: Hard to pinpoint a true weakness. Population growth positive. Starter home weakness. Few opportunites for loans. Mostly - it is an intangible feeling. Retail shopping centers - some evidence of sluggishness - more vacencies - not drastically so. Energy business still drives a lot of the Houston economy. If there was an oil shock - correction to price in $60s? PRSP: $60 would be great - they are still making money at $60. David with Stiffel Nicholas asked if there was less non-bank competition? PRSP: There is some of that on the commercial side. There is now increased debt service requirements and moved up cap rates. So lack of non-bank competition is a positive. RF Reports EPS of $0.64 vs. $0.78 in Q2-07 BusinessWire 10-16 Regions' Q3-07 income from continuing operations was $394.2 million [56 cents/share] which included $56.5 million in after-tax merger-related expenses (8 cents/share). Excluding the impact of merger-related expenses, earnings per diluted share from continuing operations were 64 cents compared to Q2-07's 69 cents and Q3-06's 78 cents. ROA in Q2-07 was 1.14% compared to 1.32% in Q2-07 and 1.60% in Q3-06. ROE was 7.90% compared to 12.83% in Q3-06. Stockholders' equity per share at the end of Q3-07 was $28.46 compared to $24.27 at the end of Q3-06. Taxable equivalent net interest income was $1.1 billion in Q3-07, $25.4 million below the Q2-07 level, and was impacted by a lower earning asset base and incremental margin compression. FTE Net interest margin in Q2-07 was 3.74% compared to 3.82% in Q2-07 and 4.21% in Q3-06. Total interest-earning assets in Q3-07 was $115.286 billion at a yeild of 6.95% compared to $76.047 billion at 7.14% in Q3-06. Total interest-bearing deposits was $75.088 billion at a cost of 3.56% compared to $49.223 billion at 3.31%. Non-interest revenue, excluding securities transactions, was $705.2 million in Q3-07 compared to $696.8 million in Q2-07 and $461.4 million in Q3-06. Brokerage and investment banking in Q3-07 was $209.413 million; Service charges on deposit accounts $288.296 million; Trust department income $62.449 million; Mortgage income $29.806 million; and Securities gains (losses), net was $23.994 million. Total non-performing assets at September 30, 2007, were $588.3 million, or 0.62% of loans and other real estate, compared to $585.0 million, or 0.62% at June 30, 2007. Net loan charge-offs increased to $63.1 million, or an annualized 0.27% of average net loans in Q3-07 compared to $53.9 million, or an annualized 0.23% of average net loans in the prior quarter. During Q3-07 RF repurchased 6.5 million of its common shares, leaving 27.6 million shares available under current repurchase authorizations. TRMK Reports EPS of $0.51 vs. $0.52 in Q3-06 PRNewsWire 10-23 Trustmark announced net income in Q3-07 of $29.1 million [$0.51/share] compared to $29,761 million [$0.52/share] in Q3-06. ROA in Q3-07 was 1.31% compared to 1.40% in Q3-06. ROE in Q3-07 was 12.80% compared to 14.65% in Q3-06. Book value at the end of Q3-07 was $15.85 compared to $15.04 at the end of Q3-07. FTE Net interest income in Q3-07 was $77.369 million compared to $73.074 million in Q3-06. FTE Net interest margin in Q3-07 was 3.91% compared to 3.83% in Q3-06. FTE Interest margin Yield was 7.07% compared to 6.70% in Q3-06. Interest margin Cost was 3.16% compared to 2.86% in q3-06. Total noninterest income was $41.569 million compared to $40.068 million in Q3-06. Service charges on deposit accounts in Q3-07 were $13.849 million; Insurance commissions $8.983 million; and Wealth management $6.507 million. Net charge-offs in Q3-07 were $3.579 million compared to $1.543 million in Q3-06. Net charge offs to average loans ratio was 0.20% compared to 0.10% in Q3-06. Total nonperforming assets in Q3-07 were $51.319 million compared to $31.042 million in Q3-06. The Nonperforming assets to total loans+ORE was 0.74% compared to 0.47% in Q3-06. UB Reports EPS of $0.92 vs. $1.20 in Q3-06 Business Wire 10-18 UnionBanCal Corporation reported Q3-07 net income of $127.5 million [$0.92/share] compared with [$1.20/share] in Q3-06. Net income for Q3-07 included a net loss from discontinued operations of $22.6 million [$0.16/share] comprised of a $21.6 million Department of Justice penalty, $1.6 million in professional services expense, and a $0.6 million income tax benefit, all related to the international correspondent banking business that was sold in Q3-05. Q3-07 income from continuing operations was $150.1 million [$1.08/share] compared with $1.21/share a year earlier. ROA from continuing operations in Q3-07 was 1.45% compared with 1.17% in Q3-06. ROE from continuing operations in Q3-07 was 15.74% compared with 13.55% in Q3-06. Book value at the end of Q3-07 was $33.71 compared with $33.17 at the end of Q3-06. Net interest income was $428.8 million in Q3-07, down $31.8 million, or 6.9%, from Q3-06, primarily due to a deposit mix shift from noninterest bearing and low-cost deposits into higher-cost deposits. The average yield on earning assets of $48.9 billion was 6.19 percent, up 13 basis points over Q3-06. The average rate on interest bearing liabilities of $33.7 billion was 3.91 percent, up 50 basis points compared with Q3-06, reflecting higher short-term interest rates and an unfavorable shift in deposit mix due to heightened competition for deposits. The net interest margin in Q3-07 was 3.50% compared with 4.00% in Q3-06. Noninterest income was $235.7 million, up $18.5 million, or 8.5%, from Q3-06. Service charges on deposit accounts decreased $2.9 million, or 3.6%, primarily due to lower account analysis fees. Trust and investment management fees increased $3.7 million, or 7.8%, primarily due to an increase in trust assets. Trading account gains increased by $7.5 million, or 52%, driven primarily by an increase in interest rate swap transactions during third quarter 2007. Gain on private capital investments, net, was $12.2 million, an increase of $4.5 million compared with Q3-06. Net loans charged off to average total loans in Q3-07 was 0.06% compared with 0.02% in Q3-06. Nonperforming assets to total loans and foreclosed assets 0.13% compared with 0.13% in Q3-06. UMBF Reports EPS of $0.51 vs. $0.37 in Q3-06 PRNewsWire 10-23 UMB Financial announced Q3-07 earnings of $21.5 million [$0.51/share] compared $15.9 million [$0.37/share] in Q3-07. ROA 1.09% compared to 0.84% in Q3-06. ROE was 9.70% compared to 7.44% in Q3-06. Book value at the end of Q3-07 was $21.18 compared to $20.03 at the end of Q3-06. Net interest income for Q3-07 increased $3.2 million, or 5.8%, compared to Q3-06 due primarily to higher average earning assets while increasing net interest margin. Average earning assets increased by $322.1 million, or 4.8%, as compared to Q3-06. Most of this increase was due to a $284.0 million, or 7.8%, increase in average loans. Net interest margin was 3.48% compared to 3.43% in Q3-06. Total earning assets were $7.087 billion yielding 6.03% compared to $6.707 billion yielding 5.53% in Q3-06. Total interest-bearing liabilities $5.254 billion costing 3.53% compared to $4.786 billion costing 3.04% in Q3-06. Noninterest income increased $12.5 million, or 19.4 percent, for the three months ended September 30, 2007 compared to the same period in 2006. Trust and securities processing income increased $3.9 million, or 15.4 percent, for the three months ended September 30, 2007 compared to the same period in 2006. This increase was primarily due to a $1.0 billion, or 22.0 percent, increase in total assets under management in the UMB Scout Funds at September 30, 2007 as compared to September 30, 2006. Deposit service charges were $1.8 million, or 9.6 percent, higher in the third quarter 2007 than in the same period in 2006. A $6.5 million net gain was recognized on the sale of the securities transfer product, which was completed during the quarter. Net loan charge-offs in Q3-07 were $1.907 million [0.19% of average loans] compared to $2.440 million [0.27%] in Q3-06. Nonaccrual and restructured loans were $5.709 million [0.14% of loans] compared to $8.121 million [0.21%] in Q3-06. UMPQ Reports EPS of $0.22 vs. $0.39 in Q2-07 BusinessWire 10-18 Umpqua Holdings announced net income [including a small amount merger-related expenses] for Q3-07 of $13.2 million [$0.22/share] compared to $22.9 million [$0.39/share] for Q3-06. ROA was 0.64% compared to 1.02% in Q2-07 and 1.27% in Q3-06. ROE was 4.20% compared to 6.44% in Q2-07 and 8.06% in Q3-06. Book value per share at the end of Q3-07 was $20.60 compared to $20.48 at the end of Q2-07 and $19.67 at the end of Q3-06. Net interest income in Q3-07 was $73.875 million compared to $72.316 million in Q2-07 and $73.799 million in Q3-06. The net interest margin was 4.20% for Q3-07 compared to 4.83% for Q3-06 and 4.34% for Q2-07. The decrease in net interest margin over these time periods resulted from increases in short-term market interest rates and the competitive climate, characterized by increasing deposit costs combined with declining earning asset yields, which was partially attributed to the interest income reversal discussed previously. A $1.3 million interest reversal on new non-accrual loans resulted in a 7 basis point decline in the net interest margin during the quarter. Total yield on earning assets was 7.24% compared to 7.33% in Q2-07 and 7.49% in Q3-06. Total cost of interest bearing liabilities was 3.86% compared to 3.84% in q2-07 and 3.45% in Q3-06. Total non-interest income in Q3-07 was $18.543 million compared to $15.930 million in Q2-07 and $13.476 million in Q3-06. Service charges in Q3-07 were $8.448 million; Brokerage fees $2.498 million; and Mortgage banking revenue $1.366 million. Non-performing loans increased $21 million during the quarter, to $68.9 million. Non-performing assets increased $31 million during the quarter, to $79.2 million. Subsequent to quarter end, UMPQ sold $10 million of other real estate owned with no loss recognized. The residential development segment represents $66.7 million, or 84% of the total $79.2 million in non-performing assets. WTNY Reports EPS of $0.71 vs. $0.53 in Q3-06 PRNewsWire 10-23 Whitney Holding Corporation earned $48.8 million [$0.71/share] in Q3-07 compared with $35.2 million [$0.53/share] for Q3-06. Whitney reached a settlement on insurance claims arising from the hurricanes that struck portions of its market area in the late summer of 2005. With this settlement, WTNY recognized a gain of $31.3 million ($19.9 million after-tax, or $.29/share) for the quarter. ROA was 1.82% compared to 1.37% in Q3-06. ROE 15.79% compared to 12.74% in Q3-06. Book value at the end of Q3-07 was $18.53 compared to $16.90 at the end of Q3-06. FTE net interest income for Q3-07 was $118.245 million compared to $121.344 million in Q3-06. Average earning assets increased 5%, and there was some favorable shift in the mix of assets. FTE net interest margin was 4.82% for Q3-07, down 35 basis points from Q3-06. The overall yield on earning assets increased 11 basis points from the third quarter of 2006, mainly reflecting the shift in asset mix. The cost of funds increased 46 basis points between the third quarters of 2006 and 2007, mainly in response to the shift in the funding mix toward higher-cost sources. Noninterest income in Q3-07 was $54.455 million [which includes insurance claim] compared to $21.348 million in Q3-06. Loan charge-offs, net of recoveries, totaled $2.4 million in Q3-07, or .13% of average loans on an annualized basis compared to .27% in Q3-06. Nonperforming assets as a percentage of loans plus foreclosed assets and surplus property at the end of Q3-07 was 1.22% compared to 0.80% in Q3-06 ZION Reports EPS of $1.22 vs. $1.42 in Q2-07 PRNewsWire 10-18 Zions Bancorporation reported net earnings of $131.962 million [$1.22/share] compared to $153.674 million [$1.42/share] in Q3-06. ROE in Q3-07 was 10.50% compared to 12.50% for Q2-07 and 13.41% for Q3-06. ROA was 1.10% compared to 1.36% in Q3-06. Book value per share at the end of Q3-07 was $46.92 comapred to $43.47 at the end of Q3-06. Net interest income for Q3-07 was $476.6 million compared to $469.3 million for Q2-07 and $446.5 million for Q3-06. FTE net interest income Q3-07 was $483.1 million compared to $476.1 million for Q2-07 and $452.6 million for Q3-06. The net interest margin was 4.44% for Q3-07 compared to 4.53% for Q2-07 and 4.58% for Q3-06. The decrease in the net interest margin during the quarter primarily resulted from the decline in average noninterest-bearing deposit balances and from the strong loan growth being funded mainly by increased nondeposit borrowings. Noninterest income for Q3-07 was $145.8 million compared to $141.3 million for Q2-07 and $145.3 million for Q3-06. Service charges and fees on deposit accounts in Q3-07 was $46.919 million; Loan sales and servicing income $11.607 million; Trust and wealth management income $9.040 million; Dividends and other investment income $14.720 million; and Equity securities gains, net $11.072 million. Nonperforming assets were $196.6 million at the end of Q3-07 compared to $95.4 million at the end of Q2-07 and $74.8 million at the end of Q3-06, primarily reflecting continuing weakness in residential development and construction activity in the Southwest. The ratio of nonperforming assets to net loans and leases and other real estate owned was 0.52% at September 30, 2007 compared to 0.26% at June 30, 2007 and 0.22% at September 30, 2006. Net loan and lease charge-offs for Q3-07 were $18.1 million or 0.19% annualized of average loans. This compares with $8.7 million or 0.10% annualized of average loans for Q2-07 and $6.5 million or 0.08% annualized of average loans for Q3-06. From the Conference Call: During Q3-07 there was a 6 cents per share hit to EPS due to declining spread of LIBOR to prime rate. NIM hit by 9 basis points. For DDAs to have had no impact - it would have had to grow with the balance sheet - so we needed roughly $200 million in growth to be neutral. But DDA shrank by $200 million - and that was a 4 basis point hit. Commercial paper purchases by Lockhardt funding was a 1.5 basis point hit. Strong loan growth had a 2 basis point impact because it was funded by higher cost sources. The interest bearing deposits growth was in the higher rate categories - which hurt NIM. Outlook: Competition for demand deposits is high and DDA growth will be low. Commercial paper with its higher yield rates have been a competition for CDs in our commercial accounts. So far we have not seen competitors dropping rates since the Fed cut - maybe 25% of cut has been past on. We project that there will be continued pressure on margins due to high loan growth with low deposit growth. We expect higher NPAs in Q4 - but we do not expect loan loss provision to grow. FDIC expenses will be up in Q4 and will cost ZION $11.5 million more in costs in 2008. We will be cautious with our capital levels - thus not likely to due stock buy-backs. Steven with JP Morgan - what is work out strategy with residential loans? ZION: That will depend on the circumstances. Some we will work with - if neccesary we would forclose - but that is the last step. Some note sales will be done. During Q3 there were no sales of NPA. Analyst: Can you give us the new NPAs by location? ZION: $26 million in Arizona; $20 milion in Nevada; and $27 million California. Largest component was residential land development and construction. James Abbest with FBR wanted to know the size of the charge-offs that were related to home equity and consumer loans. ZION: There were very little of those with no movement upwards. Mostly the charge offs were from residential construction, with a small increase in small consumer bank card charge-offs - but not bu much. Our consumer FICOs are high. Are your LTVs going down? ZION: In regard to the NPAs, that land value is not a trigger - it is stress on the borrower that would trigger the downgrade on the loan. When downgraded, we then do a re-appraisal - and we have seen 30% to 40% falls in valuations this quarter when reappraisals were done. Lots are now taking longer time to sell - which stresses the cash flow - so the net present value falls. Appraisers are having tough time in getting the values. Land is the first thing to fall in value. But given a 40% fall in a given appraisal, that could be triggered by only a 20% fall in the land value. Tony Davis with Stephil Nicholas wanted to know - concerning residential real estate - what inning are we in? ZION: Or will we go into extra innings. Our weakest MSAs [metropolitan statistical areas] are Phoenix and Tuscon - followed by Inland Empire and San Diego County. There may be markets that are weaker - like in Las Vegas, or the central Valley of California - but they are not as import to ZION. Last cycle was 5 years from peak to trouth - so we are a couple or three years before seeing a pick up. Manual Rameriz with KBW asked how do you stay ahead of the market in a down cycle? ZION: Comparing the 90s vs. today - today our processes give us better infomation - our procedure have improved - I think we can see situations faster - and we reccognize problems faster. Sub-prime problems started to percolate in February. Then came August, and mortages companies began to fold. We have not seen the disappeanace to this extint of loan 'capacity' before. Residential real estate is driven by the availability of capital to lend to customers. So we see things [the current bad situation] going on for a while. Ken Houston with Banc of America asked a question that kept ZION on the same theme. ZION: We went into this cycle with higher LTVs. In 90s - everything went bad at the same time - office and retail along with residential. This cycle the problem is residential only. And there is still some residential construction. There are still some custom jobs and some good infill locations being built. And there is still growth in Texas - more so than anywhere else. And there is still good growth in commercial development. Todd Hagerman with Credit Suisse - have you reviewed each part of the portfolio? ZION: the reviews are an ongoing process each quarter - not a one time event. We focused on residential construction in California and Arizonia. ZION has low exposure to Nevada. Is there another shoe yet to fall? No. Heather Wolf with Merrill - are you hearing from regulators as to where they want to see loan reserves? No. Ratings & Dividend Changes On 10-12 BXS declared a dividend of $0.21/share payable January 2, 2008 to shareholders of record at the close of business on December 14, 2007. On 10-17 RF declared an increased dividend of 38 cents/share payable January 2, 2008, to stockholders of record as of December 19, 2007. On 10-22 BOH declared an increased dividend of 44 cents/share to be paid on Dec. 14 to shareholders of record as of Nov. 30. On 10-23 PRSP declared an increased dividend of 12.5 cents/share payable Jan. 2 to shareholders of record on Dec. 14. On 10-24 TRMK increased its dividend 4.55% to $0.23/share from $0.22/share. The dividend is payable on December 15, 2007 to shareholders of record as of December 1, 2007. On 10-24 UB declared a dividend of $0.52/share tp be paid on January 4, 2008, to shareholders of record as of December 7, 2007. On 10-24 CYN declared a dividend of $0.46/share, payable on November 21, 2007 to stockholders of record on November 7, 2007. On 10-17 CNB declared a dividend of $0.1875/share to be paid on November 9, 2007 to shareholders of record as of the close of business on October 26, 2007. On 10-29 ZION declared a dividend of $0.43/share payable November 21, 2007 to shareholders of record on November 7, 2007. On 10-26 CBSH declared a dividend of $0.25/share payable December 13, 2007 to stockholders of record at the close of business on November 29, 2007 and approved a 5% stock dividend in a non-certificated form. Shares issued as a result of the stock dividend will be entered by Direct Registration System on the records of the Company’s transfer agent, Computershare, and statements reflecting the issuance will be mailed on December 13, 2007. No fractional shares will be issued and shareholders will receive cash for such fractional interests based on the market value of the stock on the record date. On 10-19 Citigroup Upgraded FHN from Hold to Buy. On 10-19 Stifel Nicolaus Downgraded ZION from Buy to Hold. On 9-12 UMPQ declard a dividend of $0.19/share, an increase of $0.01 from the previous quarter. The dividend is payable on October 16, 2007, to shareholders of record as of October 1, 2007. Home Page Factoids Previous Update |