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The Q1-09 div is used for yield calculations while not all Q1 dividends have been declared Negative EPS estimates will crash this javascript. The lowest EPS used is $0.10. So the Div/EPS ratios are inaccurate for those banks with negative EPS estimates - and there are several of those. 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. Treasury Unveils Toxic-Asset Plan Randall and Crittenden, WSJ 3-23 The Treasury Department unveiled its plan to use both private and public funds to take toxic assets off banks' balance sheets. The effort will be coordinated with the Federal Reserve and Federal Deposit Insurance Corp. The plan calls for the federal government to work with private investors to try to restart the market for the troubled mortgage loans and securities, which in turn officials hope improves the financial condition of banks that have received billions in capital injections from the government already. The federal government will pair as much as $100 billion with private capital to generate $500 billion in purchasing power to buy the assets, and Mr. Geithner told reporters the plan could reach $1 trillion in size over time. "We have to complement this program with a range of approaches to help get these securities markets back to a point where they're working again," Mr. Geithner told reporters. The new program will address both the legacy loans banks are holding on their balance sheets and the legacy securities backed by mortgage-related debt clogging the balance sheets of financial firms. Under the legacy loan program, investment funds will be created to purchase pools of assets. Treasury will provide 50% of the equity capital for each fund while private managers retain control of asset management subject to FDIC oversight. Treasury said it will approve up to five asset managers "with a demonstrated track record of purchasing legacy assets," but it might consider adding more managers depending on the quality of applications received. To be pre-qualifed as a fund manager, the manager must submit an application to Treasury by April 10. Pacific Investment Management said it intends to take part in the program as both a buyer and manager of troubled bank assets, Pimco founder Bill Gross said Monday. "Four or five managers are going to be selected -- we hope to be able to do that on the securities side. On the bank-loan side, we hope to be able to participate as a buyer," Mr. Gross told CNBC. Curtis Arledge, co-head of U.S. fixed income at BlackRock, said BlackRock will apply to be a fund manager under the program. The asset managers in the program won't be subject to executive compensation requirements. The new program marks a return by Treasury to dealing with the illiquid assets that have snagged credit markets. Former Treasury Secretary Henry Paulson abandoned plans to deal with the toxic assets last year, in part because of the difficulty of determining a proper price for assets where no market currently exists. Mr. Geithner said alternative proposals -- letting the assets fester on bank balance sheets or having the government directly purchase them -- would put too much risk on the backs of taxpayers. The government needs to balance the potential losses for taxpayers with the need to get credit markets functioning once again. Highlighting the policy choices the U.S. is making, Mr. Geithner and Treasury referenced previous banking crises in Sweden and Japan as providing lessons in the current turmoil. Treasury documents released Monday said that letting illiquid assets sit on bank balance sheets "risks prolonging a financial crisis, as in the case of the Japanese experience." Mr. Geithner, discussing the issue with reporters, warned against taking the opposite strategy from the Japanese and being too aggressive with government intervention. "We're not Sweden, we have a very complicated financial system," Mr. Geithner said, referencing that country's move in the early 1990s to effectively nationalize some banks. Banks will identify the assets they wish to sell. The FDIC will conduct an analysis to determine the amount of funding it is willing to guarantee. Leverage will not exceed a 6-to-1 debt-to-equity ratio, the Treasury Department said. Meanwhile, the highest bidder will have access to the Public-Private Investment Program to fund 50% of the equity requirement of their purchase. Eligible assets will be determined by banks, regulators, the FDIC and the Treasury Department. "The participation of individual investors, pension plans, insurance companies and other long-term investors is particularly encouraged," Treasury said in a fact sheet it provided. Under the legacy securities program, non-recourse loans will be made available to investors to fund purchases of legacy securitization assets. Eligible assets are expected to include certain non-agency residential mortgage-backed securities that were originally rated triple-A and outstanding commercial mortgage-backed securities and asset-backed securities that are rated triple-A. In an op-ed piece in Monday's Wall Street Journal, Mr. Geithner wrote that the efforts will help tackle the glut of assets clogging bank balance sheets and will help provide some kind of normal price for these assets, which the Treasury believes are currently undervalued. "Over time, by providing a market for these assets that does not now exist, this program will help improve asset values, increase lending capacity by banks, and reduce uncertainty about the scale of losses on bank balance sheets," Mr. Geithner wrote. "The ability to sell assets to this fund will make it easier for banks to raise private capital, which will accelerate their ability to replace the capital investments provided by the Treasury." Congress provided the Treasury $700 billion in October as part of the Troubled Asset Relief Program. With the commitment of between $75 billion and $100 billion to deal with toxic assets announced on Monday, it means Treasury has roughly $80 billion to $110 billion left in TARP funds. Much of that money could likely end up funding the Treasury's program to recapitalize the largest U.S. banks based on ongoing "stress tests." "We will make sure there is sufficient capital in the system for these institutions to manage through...a deeper recession," Mr. Geithner said on Monday. Strong US Banks To Benefit From New Treasury Plan Matthias Rieker, Dow Jones Newswires 3-23 Strong banks will benefit from the Treasury's new plan to buy to $1 trillion in troubled loans and securities; for weak banks, the plan may require them to face write-downs they can ill afford. The Treasury Department's plan puts leverage back into a market sucked dry by uncertainty and fear. Some analysts said the plan is another step to alleviating the financial crisis, though certainly not the last. For banks that have enough capital to absorb more write-downs, and those that have already taken aggressive markets on the assets often described as toxic, the plan is yet another step toward solving the financial crisis, observers said. Those are likely the nation's largest banks, many of which have expressed cautious optimism about Treasury Secretary Timothy Geithner's blueprint. But weak banks participating in the plan will suffer damage from the losses they will book by selling bad loans and illiquid securities, observers said. Regardless of the Treasury's plan, banks like Colonial BancGroup may well have to continue to hope that private investors will recapitalize them. Colonial declined to comment for this story. Bank of America, PNC Financial Services (PNC), Fifth Third Bancorp all might benefit from the Treasury plan to provide guarantees and financial support to buy soured loans made in the boom years ahead of the financial crisis, said Christopher G. Marshall, the former chief financial officer of Fifth Third. He called the Treasury's Public-Private Investment Program "exactly what's needed," and that it was a mistake of Geithner's predecessor Henry Paulson to abandon the original purpose of the Troubled Asset Relief Program which also sought the disposal of assets. "What's warranted is that the people who do step in to buy" the bad assets "get attractive returns," roughly between 15% and 20% annually, he said. The plan announced Monday paves that way, because the government would provide the leverage that helps to generate those returns. Thomas B. Michaud, a vice chairman of KBW, agreed. "The market went from too much leverage to no leverage," and that led "to a massive problem in price discovery" for assets banks would like to sell, he said. Private investors had to rely on the loans or securities alone to generate their returns, but with the benefit of the government's leverage, investors are able to pay higher prices. The Treasury intends to establish an auction process for assets banks want to sell. "Those [banks] with enough capital" will benefit, Michaud said. "Those who can afford to rid themselves of the bad assets at the prices offered. If you are a very thinly capitalized institution you may feel as if you cannot afford to sell assets at the required prices." However, in concert with the other government programs already put in place, the banking system might be on its way to stability, Michaud said. Though he said many will need to raise more capital to make it through the crisis. U.S. credit card delinquencies reached all-time highs in January on the back of ongoing deteriorating conditions in the U.S. economy, according to a study released by Fitch on Feb 5th. The rate of payments missed by more than 60 days advanced 0.47 percentage points to an all-time high of 3.75% in January, according to the report. "U.S. consumers continue to struggle in the face of mounting pressures on multiple fronts, from employment to housing to net worth," according to Michael Dean, a managing director at Fitch. Ratings & Dividend Changes - March On 3-12 Morgan Stanley cut Cullen/Frost Bankers To Underweight. On 3-12 Stifel Nicolaus Initiated WTNY at Hold. On 3-13 Sterne Agee Downgraded WABC from Hold to Sell and Upgraded ZION from Hold to Buy. On 3-17 Sun Trust Rbsn Humphrey Initiated GBCI at Buy. On 3-17 Fox Pitt Upgraded ZION from In Line to Outperform. On 3-18 RBC Capital Mkts Downgraded ZION from Outperform to Sector Perform. On 3-24 Sun Trust Rbsn Humphrey Downgraded GBCI from Buy to Neutral. On 3-25 Sterne Agee Initiated GBCI at Neutral and initiated UMPQ at sell. On 3-31 JMP Securities Initiated coverage of CATY, CYN, EWBC, PCBC, UCBH, UMPQ, WABC and ZION at Market Perform. On 3-12 UMPQ declared a dividend of $0.05/share payable on April 15, 2009, to shareholders of record as of March 31, 2009. Ratings & Dividend Changes - February On 2-02 DA Davidson Upgraded GBCI from Neutral to Buy. On 2-06 CFR and WNTY were started at Buy by Wunderlich. On 2-06 Friedman Billings Downgraded UCBH from Outperform to Market Perform. On 2-18 Keefe Bruyette Upgraded CATY, EWBC and PCBC from Underperform to Market Perform. On 2-23 Wunderlich Upgraded HBHC from Hold to Buy. On 2-23 Citigroup Downgraded RF and ZION from Buy to Hold. On 2-06 CBSH declared a dividend of $0.24/share [compared to $0.25 last quarter] payable on March 27, 2009 to stockholders of record at the close of business on March 10, 2009. The dividend reflects an adjustment for the 5 percent stock dividend that was paid on December 1, 2008. On 2-18 FNB declared a dividend of $0.12/share payable on March 15, 2009, to shareholders of record as of the close of business on March 2, 2009. On 2-17 HBHC declared a dividend of $0.24/share payable March 16, 2009, to shareholders of record as of March 5, 2009. 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