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SNV spun off TSYS and paid a one time dividend of $13.61 on 1-02-08. The forward div has not been adjusted. TD Bank acquisition of Commerce Bancorp completed PRNewswire 3-31 TD [Toronto-Dominion] Bank Financial Group announced that it has completed the acquisition of Commerce Bancorp [CBH]. "This marks a tremendous step forward in TD's history as a leading North American financial institution. We're thrilled to officially welcome Commerce Customers, Employees and Shareholders into the TD family," said Ed Clark, President and CEO, TD Bank Financial Group. Upon the close of the transaction, Commerce shareholders will become TD shareholders. Any holder of TD shares on TD's upcoming dividend record date of April 3, 2008, will be eligible for the TD dividend. FBR Reduces 2008 Estimates on 19 Banks AP 3-24 Friedman, Billings, Ramsey analysts cut their first-quarter earnings estimates for 21 financial institutions [and also cut their price targets on 15] because of continued uncertainty in the credit markets. FBR lowered ratings and reduced price targets due to "expectations for greater credit losses and lower gain-on-sale margins in mortgage banking." Banks are also likely to increase bad debt reserves and take further write-downs during the first quarter, on top of the more than $160 billion the financial services sector has already taken tied to bad bets on mortgages and the ensuing credit market fallout. The financial institutions sector remains undercapitalized and will likely need to raise new cash, FBR wrote in the research note. FBR also anticipates normalcy in markets not returning until late 2009 or early 2010. National City Looks for a Buyer Enrich and Bauerlein, WSJ 3-13 National City Corp., a struggling Midwestern bank, has been hunting for investors to replenish its depleted coffers. Now the company is turning to a more drastic solution: trying to find someone to buy the bank. Investment bankers for National City, which has been battered by the housing slump, are shopping the company to prospective buyers, according to people familiar with the matter. A National City spokeswoman declined to comment. She said the company doesn't talk about merger-and-acquisition activity. It isn't clear that Cleveland-based National City will find a buyer or line up a capital infusion, bankers say. That's in part because the company faces a daunting array of challenges: Some of its largest geographic markets are wallowing in recession, its balance sheet is bogged down with troubled loans, and its recent foray into Florida coincided with the peak of the state's housing market. Latest Trouble Spot: Souring Home-Equity Loans Robin Sidel, WSJ 3-12 When times were good, banks raked in billions of dollars in profit from home-equity loans. As long as home prices were rising, lenders had little to worry about. But falling home values are leaving banks with little or nothing to collect on many home-equity loans in case of default. Some stretched borrowers are keeping up with their mortgage and credit cards -- but not their home-equity loan. The problems are already causing trouble for J.P. Morgan Chase and Wells Fargo, and are expected to hit other large banks when first-quarter earnings results are released next month. The pain is likely to deepen through the rest of 2008, sapping capital levels and resulting in tighter lending standards as banks try to reduce their risk. "These losses are well beyond what we would have modeled . . . and continue to get worse," said Charles Scharf, head of J.P. Morgan's retail business. At a meeting with analysts and investors last month, Mr. Scharf spent more than 30 minutes dissecting the second-largest U.S. bank's $95 billion home-equity portfolio. J.P. Morgan expects home-equity-related losses of about $450 million in Q1-08, up from $248 million in Q4-07. By the end of 2008, home-equity losses could double from current levels, he said. Because J.P. Morgan largely escaped the brunt of the subprime crisis, its ominous tone on home-equity loans has fueled anxious number-crunching. David Hilder, a banking analyst at Bear Stearns, last week cut his 2008 and 2009 earnings estimates for National City, SunTrust, Washington Mutual and Wells Fargo, citing rising home-equity losses. Each of those lenders has 12% to 19% of its total assets tied up in home-equity loans. Fitch Ratings predicts that "banks will significantly ratchet up loan-loss provisions against home-equity loans in 2008." Projected losses from home-equity loans aren't anywhere close in size to the carnage caused by the declining value of mortgage-related securities. (Those losses now total more than $150 billion.) But the cascading delinquencies and charge-offs represent one more piece of the U.S. banking industry that is in big trouble after years of bumper-crop profits. Originally used to finance home-improvement projects, borrowers increasingly turned to home-equity loans to pay off other debts, such as credit cards. Home-equity loans also became a popular way to fund vacations and expensive electronics -- or to buy a house with little or no money down without paying for private mortgage insurance. Now, the steep decline in housing prices and weak economy are turning the home-equity business upside down. About 4.65% of fixed-rate home-equity loans were delinquent in Q4-07, up from 3.11% a year earlier, according to Equifax Inc. and Moody's Economy.com. "We will continue to see banks increasing reserves for their home-equity portfolios and tightening their home-equity policies, changing their credit standards in response to price declines," said Doug Duncan, chief economist of the Mortgage Bankers Association. While banks can foreclose on a first-lien mortgage, lenders often have little recourse when trying to collect a delinquent home-equity loan, especially if another bank holds the primary mortgage. Banks holding home-equity loans generally can only seize the collateral -- a house -- after the mortgage is paid off. When another bank holds the mortgage and the mortgage payments are current, the home-equity lender is effectively powerless to collect the debt. Unfortunately for home-equity lenders, many borrowers understand that pecking order, concluding there are few repercussions if they stop making payments on their home-equity loan. "Lenders are seeing people go delinquent on home equity who by all rights wouldn't be expected to go delinquent," said Dan Balkin of Wholesale Access, a Maryland research and consulting firm that specializes in the mortgage industry. Other types of consumer loans also are souring, including credit cards and auto loans. But delinquent home-equity loans are rising faster, representing 12.5% of all delinquent loans in Q4-07 at Bank of America. That was up from 9.4% in Q1-07, according to research firm SNL Financial. Leaning on outside mortgage brokers for home-equity business was "one of the biggest mistakes we've made," said Mr. Scharf. Those loans have performed worse than home-equity loans generated by J.P. Morgan. J.P. Morgan, Wells Fargo and other banks are now backing away from brokers to focus on home-equity loans offered through their own retail branches, where customers already have a relationship with the bank. Citigroup has slashed the number of home-equity loans originated through brokers by 90%. Meanwhile, financial institutions are refusing to provide home-equity loans to homeowners whose residences are already weighed down by big mortgages in states like California and Florida where home values are falling fast. "This product was meant to help people do construction on their house, [and] do debt consolidation -- not to take out every last dollar of equity in their home to finance a different kind of lifestyle," Mr. Scharf said. J.P. Morgan is "rolling our changes back to represent that kind of product." Fitch Cuts Bond Ratings for FHN and NCC Reuters 3-07 Fitch Ratings on Friday cut its ratings on Washington Mutual and said it may cut Bank of America and Citigroup due to their exposure to residential home loans. Fitch cut WaMu's ratings two notches to "BBB," the second lowest investment grade, from "A-minus." Bank of America and Citigroup's "AA" ratings, the third highest investment grade, were placed on review for downgrade. Fitch also cut its ratings on First Horizon National one notch to "BBB-plus," the third lowest investment grade, from "A-minus" and cut National City Corp one notch to "A," the sixth highest investment grade, from "A-plus." The outlook for both is negative, indicating an additional downgrade is more likely over the next one to two years. Fitch's ratings on Fifth Third Bancorp and SunTrust Banks were also placed on review for downgrade. Fifth Third is rated "AA-minus," the fourth highest investment grade, and SunTrust is rated one notch lower at "A-plus." Fitch Cuts Outlook for FITB MarketWatch 3-18 Standard & Poor's lowered the ratings outlook on Fifth Third Bancorp (FITB) to negative from stable on its concerns that credit quality deterioration could be more severe than originally anticipated. S&P has an A+/A-1 counterparty credit rating on Fifth Third. "Fifth Third's loan portfolio includes commercial real estate, residential mortgage, and homebuilder loans whose quality continues to deteriorate at an increasing pace, especially in Michigan and Florida," said Dan Teclaw, an S&P credit analyst, in a statement. Ratings & Dividend Changes On 3-10 SNV declared a decreased dividend of $0.17/share payable on April 1, 2008, to Synovus shareholders of record as of the close of business on March 20, 2008. On 3-18 FITB declared a dividend of $0.44/share payable on April 22, 2008 to shareholders of record as of March 31, 2008. On 3-18 USB declared a dividend of $0.425/share payable April 15, 2008, to shareholders of record at the close of business on March 31, 2008. On 3-13 Citigroup Initiated coverage of SNV at Hold. On 2-25 FMBI declared a dividend of $0.31/share payable on April 15, 2008 to stockholders of record as of the close of business on March 28, 2008. On 2-04 MBFI declared a dividend of $0.18/share to shareholders of record as of February 15, to be paid on February 29. On 2-19 NTRS declared a dividend of $0.28/share payable on April 1, 2008, to stockholders of record on March 10, 2008. On 2-20 MTB declared a dividend of $.70/share payable March 31, 2008 to stockholders of record at the close of business on February 29, 2008. On 2-21 MI declared a dividend of $0.31/share payable on March 14, 2008, to shareholders of record at the close of business on March 3, 2008. On 2-29 VLY declared a dividend of $0.21/share to be paid April 1, 2008 to shareholders of record on March 7, 2008. On 2-04 Stifel Nicolaus Downgraded MI from Buy to Hold and Downgraded USB from Hold to Sell. On 2-04 Sterne Agee Downgraded SNV from Buy to Hold. On 2-04 Robert W. Baird Downgraded CMA from Outperform to Neutral. On 2-04 Janney Mntgmy Scott Downgraded UCBI from Buy to Neutral. On 2-05 Robert W. Baird Downgraded ASBC from Outperform to Neutral. On 2-11 Oppenheimer Downgraded FMER from Market Perform to Underperform. On 2-25 JP Morgan Upgraded CRBC from Underweight to Neutral. On 2-21 FMER declared a dividend of $0.29/share payable March 17, 2008, to shareholders of record on March 3, 2008. On 2-26 BBT declared a dividend of $0.46/share to be paid May 1 to shareholders of record as of April 1. On 2-27 CHCO declared an increased dividend of $0.34/share payable on April 30, 2008 to shareholders of record as of April 15, 2008. Home Page Factoids Previous Update |