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The Q2-09 div is used for yield calculations, but not all Q2 divs have been declared CATY, CYN, UCBH & WTNY have lowered their Q2-09 divs - RF has announced a reduction to the Q3-09 dividend Negative EPS estimates will crash this javascript. The lowest EPS estimate that I use is $0.10. So the Div/EPS ratios are inaccurate for banks with negative EPS estimates [CNB, EWBC, FHN, PCBC, RF, UCBH, ZION]. 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. Ratings & Dividend Changes - May On 5-01 Stifel Nicolaus Downgraded WABC from Hold to Sell. On 5-05 Keefe Bruyette Downgraded CATY from Market Perform to Underperform. On 5-06 B. Riley Downgraded EWBC from Neutral to Sell. On 5-18 Keefe Bruyette Upgraded CFR and PRSP from Underperform to Market Perform. On 5-21 Credit Suisse Initiated coverage of BOH at Outperform. On 5-21 Credit Suisse Initiated coverage of FHN at Outperform. On 5-21 Credit Suisse Initiated coverage of ZION at Underperform. On 5-15 HBHC declared a dividend of $0.24/share payable June 15, 2009, to shareholders of record as of June 5, 2009. On 5-20 FNB declared a dividend of $0.12/share payable on June 15, 2009, to shareholders of record as of the close of business on June 1, 2009. Ratings & Dividend Changes - April On 4-15 CBSH declared a dividend of $0.24/share payable June 26, 2009, to stockholders of record at the close of business on June 9, 2009. On 4-16 RF declared a reduced dividend of dividend $0.01/share [prior div was $0.10 and Q4-08's div was $.34] payable July 1, 2009, to stockholders of record as of June 17, 2009. On 4-21 UMBF declared a dividend of $0.175/share payable on July 1, 2009 to shareholders of record at the close of business on June 11, 2009. On 4-23 CATY declared a reduce dividend of $0.08/share [prior div was $0.105/share] payable May 14, 2009, to stockholders of record at the close of business on May 4, 2009. On 4-23 CFR declared an increased dividend of $.43/share [previous dividend was $0.42/share] payable June 15, 2009 to shareholders of record on June 1 of this year. On 4-23 CYN declared a reduced dividend of $0.10/share [down from $0.25/share] payable on May 20, 2009 to stockholders of record on May 6, 2009. On 4-23 WABC declared a dividend of $0.35/share [prior div was $0.36] payable 5-15-09 to shareholders of record at the close of business on 5-4-09. On 4-23 ZION declared a dividend of $0.04/share payable May 27, 2009 to shareholders of record on May 13, 2009. On 4-28 BOKF declared an increased dividend of $0.24/share payable on or about May 29, 2009 to shareholders of record as of May 15, 2009. On 4-28 EWBC declared a reduced dividend of $0.01/share payable on or about May 26, 2009 to shareholders of record on May 18, 2009. On 4-28 TRMK declared a quarterly dividend of $0.23/share payable June 15, 2009, to shareholders of record on June 1, 2009. On 4-01 Fox Pitt Initiated TRMK at In Line. On 4-02 FTN Equity Capital Initiated coverage on RF at Neutral. On 4-06 BMO Capital Markets Downgraded CYN from Market Perform to Underperform. On 4-07 Oppenheimer Downgrade CFR from Perform to Underperform and Sterne Agee Initiated CBSH at Neutral. On 4-08 RBC Capital Marktes Initiated coverage on WTNY at Sector Perform. On 4-08 Soleil Initiated coverage on FHN and HBAN at Buy. On 4-09 Keefe Bruyette Downgraded FHN from Market Perform to Underperform and Downgraded RF from Outperform to Market Perform. On 4-20 Sterne Agee Downgraded FHN from Buy to Neutral. On 4-20 Raymond James initiated coverage of CFR at Market Perform. On 4-14 Moody's Investors Service downgraded the ratings of ZION's senior debt to B2. On 4-24 Sterne Agee Downgraded CYN from Neutral to Sell. On 4-24 Deutsche Securities Initiated FHN, RF and ZION at Hold. On 4-20 SunTrust Robinson Humphrey analyst Jennifer Demba upgraded ZION to "Buy" from "Neutral," saying the regional bank should be able to survive the credit crisis without additional capital. "Industry net interest margins are improving and Zions has a very strong core earnings stream to support high loan losses spread over the next few years," Demba wrote in a note to clients. Demba, who has a $24 target price on the stock, also revised her earnings estimates. She now expects a first-quarter loss of $1.71 per share, down from a prior estimate of a loss of $2.37 per share. Analysts polled by Thomson Reuters, on average, are expecting a loss of $1.77 per share. On 4-14 Moody's Investors Service downgraded the ratings of Trustmark and said the outlook is negative. Moody's cut the parent corporation's ratings by one notch to Baa1 from A3. Trustmark, which operates in Florida, Mississippi, Tennessee and Texas, had its long-term bank deposits rating cut to A3 from A2, and its bank financial strength rating cut to C from C+. TRMK's short-term ratings were lowered to Prime-2 from Prime-1. The ratings remain investment grade. Moody's said the downgrade and negative outlook reflects its view that TRMK's financial strength, particularly its capital levels and earnings generation, is likely to be pressured by deterioration in its commercial real estate portfolio. Commercial real estate exposure accounts for about three times Trustmark's tangible common equity, with construction lending comprising nearly 60% of the total. Moody's noted that Trustmark's commercial real estate lending is highly concentrated in Mississippi, where half of its related portfolio was originated. Nearly 20% of the portfolio is in Florida. Moody's said it had previously incorporated TRMK's real estate lending exposure into its ratings, but the sharp decline in real estate prices and anticipated deterioration in loan performance has led to considerably higher loss expectations in the segment, especially from construction and land development. While most of TRMK's commercial real estate losses to date stem from its construction portfolio in Florida, Moody's expects its other holdings will generate higher credit costs in the future because of the weak economy. Moody's also expects further losses from TRMK's Florida exposures. The downgrade was limited to one notch because Trustmark still has good capital and liquidity. On 4-29 Fox-Pitt Kelton upgraded its U.S. banking sector rating to "Marketweight" from "Underweight." The research firm initially placed an "Underweight" rating on the banking sector in April 2004. In a research note, Fox-Pitt Kelton said bank stocks typically bottom about two or three quarters before non-performing assets -- delinquent and defaulting loans -- peak. Fox-Pitt Kelton estimates that peak will occur around the end of 2009, meaning banks stocks bottoming in early March might have been the base ahead of sustained improvement in stock prices in the sector. Current valuation of bank stocks is also historically low, which provides good value for investors based on the still ongoing risk in the sector as the recession continues and loan losses mount. Despite the attractive valuation, the note goes on to say it is not good enough for aggressive buying of bank stocks. One wild card for the banking sector is the pending announcement of results from the government's "stress test" on 19 of the nation's largest financial firms. Fox-Pitt Kelton said it expects the results, due out next week, will be "more benign than expected and dilution-risk is already priced into relevant stocks." If banks need additional capital, they are likely to only to raise capital on an as-needed basis to minimize dilution to current shareholders. The government is also likely to support banks' capital positions by converting its preferred stock to common shares. Home Page Factoids Previous Update |