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The Q4 div does not show the Q1-08 div cut for UMPQ - other could follow with cuts too 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. This is the link to the 2007 stats page. Fitch Downgrades First Horizon AP 12-03 Fitch Ratings downgraded the individual ratings of First Horizon National and lead bank First Tennessee Bank to "C" from "B/C." The new rating of "C" denotes an adequate bank that possesses one or more troublesome aspects. Fitch also lowered its long-term rating on trust preferred securities issued by First Horizon affiliate's First Tennessee Capital I and II to "BBB-" from "BBB," and assigned a new rating of "BBB-" to preferred stock issued directly by First Horizon under the U.S. Treasury's Capital Purchase program. These ratings are investment grade. The rating outlook is "Negative." While First Horizon has taken recent action to address near-term challenges, "continued asset quality deterioration, combined with expectations for ongoing challenges in its national real estate exposures, increases the relative credit risk profile of the company well into 2009," Fitch said in a release. However, its "solid capital position," strength of its franchise and revenue diversity support the investment-grade ratings of its long-term debt, Fitch said. First Horizon's overall default risk is somewhat improved given its participation in the Treasury Department's Capital Purchase Program, the ratings agency said. Last month, First Horizon received $866 million as part of the government's $700 billion bank rescue package. The rating for the preferred stock reflects a lack of financial flexibility that restrict its ability to pay dividends, particularly if its subsidiary bank needs the parent company to provide more capital support, Fitch said. "Over the past few quarters, FHN has taken numerous steps to shore up its capital position and address asset quality weaknesses," Fitch said, using the company's New York Stock Exchange ticker symbol. The bank has gone through "a considerable amount of restructuring over the past 12 months in an effort to refine its business model and strategy," the agency said, transforming itself from a national mortgage lender with operations in 42 states to a regional bank "with an increasingly diversified capital markets business." Discontinuing the lending strategy was favorable, but the company still faces "significant pressure" because of its real estate exposure. "Although FHN has likely reported the majority of the charges associated with its restructuring over the past 12 months, it continues to face well-above-average credit costs as it resolves existing problems in its stressed national portfolios and emerging problems elsewhere in its loan book." Fitch expects profitability will still be under pressure in 2009 given these issues and the weak economy. The negative outlook reflects the possibility that credit and market conditions could deteriorate further, placing more stress on the company's turnaround prospects. Commercial NPAs are Rising Philip van Doorn, The Street.com 12-03 Commercial real estate and construction loan default rates are on the rise, presenting a new problem area for an already reeling banking sector. Delinquencies in commercial real estate loans are still historically low, but are rapidly increasing, according to a recent JPMorgan Chase report on commercial mortgage-backed securities (CMBS). Analyst Alan Todd said that retail delinquencies of 60 days or more were 0.40% in October, increasing from a low of 0.08% in July 2007. Over the same time period, office delinquencies increased to 1.29% from 0.47% and multifamily delinquencies increased to 0.28% from 0.11%. The report also noted commercial property prices had only fallen 11% from their peak, and were expected to fall 30% to 40% "over the next few years." The JPMorgan report encompassed the entire commercial real estate market, and commercial loans that are securitized tend to be underwritten to tighter standards. If we narrow our focus to loans that haven't been securitized but are still held by banks, the numbers are more alarming. According to preliminary third-quarter bank call report data provided by Highline Financial on Dec. 3, nonperforming commercial real estate (CRE) and commercial construction loans (CCL) comprised 2.56% of total CRE and CCL, up from 2.17% in June and 0.95% in September 2007. "Nonperforming" loans are past due 90 days or more, or placed in nonaccrual status since the banks don't expect full repayment of principal. Looking at loans delinquent 30 to 89 days but still considered "performing," there were another 1.11% in problem CRE and CCL as of Sept. 30. Ratings & Dividend Changes - December On 12-19 UMPQ declared a reduced dividend of $0.05/share payable on Jan. 15, 2009 to shareholders of record as of Dec. 31, 2008 compared to a prior dividend of $0.19. The div was reduced "in response to general economic conditions, and to reset our dividend payout ratio to be in line with our long-term historical average,” said Ray Davis, president and CEO of Umpqua Holdings Corporation. On 12-01 Stifel Nicolaus Initiated CBSH at Hold. On 12-02 Stifel Nicolaus Initiated CYN at Hold. On 12-02 B. Riley & Co Initiated UMPQ at Neutral. On 12-03 Stifel Nicolaus Initiated CYN at Hold. On 12-08 B. Riley & Co Downgraded EWBC from Buy to Neutral. On 12-10 Sterne Agee Initiated PACW at Hold. On 12-11 Keefe Bruyette Downgraded CFR from Outperform to Market Perform. On 12-15 Sun Trust Rbsn Humphrey Downgraded EWBC and ZION from Buy to Neutral. On 12-18 Keefe Bruyette Upgraded CYN from Market Perform to Outperform and Sun Trust Rbsn Humphrey Upgraded WTNY from Reduce to Neutral. On 12-29 Dec-08 B. Riley & Co Downgraded UBCH from Buy to Neutral. Ratings & Dividend Changes - November On 11-05 PACW declared a dividend of $0.32/share payable on November 26, 2008 to stockholders of record at the close of business on November 14, 2008. On 11-12 UBCH declared a dividend of $0.04/share payable on January 12, 2009, to stockholders of record as of the close of business on December 31, 2008. On 11-14 Morgan Keegan Upgraded CNB from Market Perform to Outperform. On 11-18 HBHC declared a dividend of $0.24/share payable December 15, 2008, to shareholders of record as of December 5, 2008. On 11-19 FNB declared a dividend of $0.24/share payable on December 15, 2008, to shareholders of record as of the close of business on December 1, 2008. On 11-19 WTNY declared a dividend of $.20/share payable on January 2, 2009 to shareholders of record as of December 15, 2008. This dividend represents a reduction of $.11/share [35%] from the quarterly dividend rate paid in Q3-08. On 11-03 B. Riley & Co Downgraded CATY from Buy to Neutral and B. Riley & Co Downgraded UCBH from Buy to Neutral. . On 11-05 Bernstein raised their ratings on Fifth Third, Regions Financial and Comerica from Market Perform to Outperform as they looked undervalued compared with expected 2010 earnings. On 11-12 Ladenburg Thalmann Upgraded RF from Neutral to Buy. On 11-14 Morgan Keegan raised Colonial BancGroup (CNB) to "outperform" from "market perform." On 11-18 Sterne Agee Upgraded ZION from Sell to Hold and Upgraded WTNY from Sell to Hold. On 11-21 Stifel Nicolaus Upgraded BXS from Hold to Buy. On 11-21 Sterne Agee Upgraded WABC from Sell to Hold. On 11-29 Lehman Brothers Upgraded CBSH from Underweight to Equal-weight. Home Page Factoids Previous Update |