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The Q2-09 div is used for yield calculations. CATY, CYN, UCBH & WTNY have lowered their Q2-09 divs - CATY, RF and ZION have reduced their Q3-09 divs and PCBC and UBCH have eliminated their divs. 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]. Book values are still the Q2-09 ending values. 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. UCBH top execs quit after panel finds irregularities Reuters 9-08 UCBH Holdings said two top executives resigned after a board audit panel raised concerns about the actions of several current and former officers, and the company agreed to a cease and desist order by regulators. The San Francisco-based lender said it was looking at all possible strategic alternatives to strengthen its capital position. The company's Chief Executive and Chairman Thomas Wu and Chief Operating Officer Ebrahim Shabudin, resigned, while Chief Financial officer Craig On has been demoted to the post of deputy CFO. UCBH named Doreen Woo Ho as acting chief executive officer and Joseph Jou as chairman. The independent investigation panel of UCBH board's audit committee identified problems resulting from weaknesses in the bank's internal controls and improper actions of certain officers, the company said. UCBH added that the report concluded that the problems were driven by an "apparent desire to downplay deteriorating financial conditions by delaying or abating risk rating downgrades and minimizing the bank's overall loan loss allowance." The company said it is addressing the concerns expressed by the panel through reprimands, reassignments and termination of employment, among others. WABC Redeems Preferred Stock BusinessWire 9-02 Westamerica Bancorporation redeemed 41,863 shares of its Fixed Rate Cumulative Perpetual Preferred Stock, Series A (Preferred Stock) at $1,000 per share. This $42 million redemption represents 50% of the Preferred Stock issued to the United States Department of the Treasury on February 13, 2009. This redemption will require a one-time after-tax charge of $538 thousand, equivalent to approximately $0.02 diluted EPS, to accelerate the Preferred Stock discount accretion. Quarterly Preferred Stock dividends and discount accretion will decline $553 thousand following the redemption, increasing quarterly EPS by approximately $0.02. ZION Announces Equity Distribution Agreement & Senior Notes Offering PRNewswire 9-17 Zions Bancorporation announced that it entered into an equity distribution agreement with Goldman, Sachs, pursuant to which ZION may offer and sell through or to Goldman shares of ZION's common stock, with an aggregate sales price of up to $250,000,000. It is anticipated that the shares of the Company's common stock will be issued over the next several quarters. ZION also announced that it has commenced an offering of senior unsecured notes to mature in 2014 in an underwritten public transaction, on terms yet to be determined. It anticipates filing a preliminary prospectus supplement in connection with the proposed offering today. Zion sold $450 million of senior notes with a maturity of 9-23-2014 at a coupon of 7.75%. the issued price was $86.888 and the yield was 11.25%. ZION has a S&P rating of BBB- and a Fitch rating of BBB. Ratings & Dividend Changes - September On 9-04 Sun Trust Rbsn Humphrey Upgraded WTNY from Neutral to Buy. On 9-09 Soleil Initiated coverage of CYN and ZION at Hold. On 9-09 RBC Capital Downgraded UCBH from Sector Perform to Underperform. On 9-21 B. Riley Initiated coverage on CYN at Neutral. On 9-24 Sterne Agee Initiated coverage of CFR at Buy and RBC Capital Markets Initiated coverage of TRMK at Outperform. On 9-23 Collins Stewart Initiated CYN, FHN and RF at Hold, and ZION at Sell. On 9-23 Wells Fargo Initiated FHN at Market Perform. On 9-21 B. Riley Initiated CYN at Neutral. On 9-21 Bernstein Upgraded RF from Market Perform to Outperform. On 9-24 Sterne Agee Initiated coverage on CFR at Buy. On 9-24 RBC Capital Initiated coverage on TRMK at Outperform. On 9-29 FBR Capital Upgraded CYN from Underperform to Market Perform. On 9-15 UMPQ declared a dividend of $0.05/share payable on Oct. 15, 2009 to shareholders of record as of Sept. 30, 2009. On 9-11 Fox-Pitt Kelton analyst John Pancari downgraded ZION writing that Zions Bancorp is going to have to increase its reserve against loan losses, and will have to raise between $500 million and $800 million in equity capital, causing dilution. "We expect credit pressure to remain a severe earnings drag at Zions in coming quarters, particularly as the bank continues to work through real estate-related issues in highly challenged markets," Panacari wrote in a note to investors Friday. He said non-performing assets are going to keep rising, peaking at about 6.6% in 2010. Zions has realized only 25% of $3.7 billion in projected cumulative losses, he said, and is going to have to build up its loan loss reserves. Due to loan losses and write-downs of certain securities portfolios, Pancari foresees capital shortfalls and regulatory scrutiny of tangible common equity levels, or how much in losses a bank can take before shareholders' equity is wiped out. He thinks that Zions is going to have to raise between $500 million and $800 million in equity capital. That will dilute current stockholders' value and could depress shares, he said. He deepened his loss estimate for the year to a loss of $8.59/share from a per-share loss of $7.36; analysts polled by Thomson Reuters see a loss of $9.52 per share in 2009. He also set a price target of $15 on Zions shares, which implies downside of 5.9% from its closing price Thursday. On 9-15 shares of Regions Financial were up 9% in afternoon trade after the bank's chief executive said the company doesn't need to raise additional capital. "The answer is absolutely not; we think we have more than adequate capital," said Dowd Ritter at the Barclays Capital Global Financial Services Conference. The Regions CEO said the company expects its nonperforming loans to begin to see some decline late this year or early next year. Ratings & Dividend Changes - August On 8-25 B. Riley Downgraded FNB from Buy to Neutral. On 8-21 Wunderlich Initiated coverage on BXS at Hold. On 8-07 Sterne Agee Downgraded WTNY from Buy to Neutral. On 8-17 Keefe Bruyette Upgraded UMPQ from Underperform to Market Perform. On 8-06 Keefe Bruyette Downgraded FNB from Outperform to Market Perform. On 8-05 Keefe Bruyette Upgraded CATY from Underperform to Market Perform. On 8-05 Keefe Bruyette Downgraded CYN from Outperform to Market Perform. On 8-03 Sterne Agee Downgrade FNB from Buy to Neutral. On 8-18 HBHC declared a dividend of $0.24/share payable September 15, 2009, to shareholders of record as of September 8, 2009. On 8-19 FNB declared a dividend of $0.12/share payable on September 15, 2009, to shareholders of record as of the close of business on September 1, 2009. On 8-26 WTNY declared a dividend of $.01/share payable on October 1, 2009 to shareholders of record as of September 15, 2009. Deutsche Bank Downgrades Regions On 8-20 Deutsche Bank analyst Matt O'Connor downgraded RF to "Hold" from "Buy" because a recent surge in its share price brought it in line with expectations, and the regional bank could still face steep losses from commercial real estate exposure. In a research note, O'Connor said Regions shares have surged 44% since he upgraded shares in May, significantly outperforming the broader banking sector. That rise brought Regions share price in line with O'Connor's trough tangible book estimate of $5.50 and just above his price target of $5. Aside from the recent share price gains, O'Connor said Regions Financial still could face large losses from its exposure to commercial real estate loans. It is widely expected defaults on those types of loans will increase sharply in the coming quarters, putting pressure on banks' earnings. "We continue to believe commercial real estate-related losses will be much higher than the market expects for banks overall," including at Regions Financial, O'Connor wrote in the note. Goldman Sachs Downgrades Regions On 8-03 Goldman Sachs analyst Brian Foran cut his rating on RF to "Neutral" from "Buy." He wrote in a research note that since he upgraded the stock in June, its share price has risen, but credit quality has worsened. While Foran said the second quarter might be the peak for non-performing assets at Regions Financial, "improvement may come in the shape of an L rather than a V," meaning credit quality is unlikely to significantly improve until 2010. During the second half of 2009, Regions Financial will continue to face easing land, homebuilder and Florida home equity loan problems, Foran said. At the same time, it will face the start of problems in the commercial real estate sector, he added. Foran said the increase of non-performing assets increased much more than expected during the second quarter and rose from already elevated levels the previous two quarters. Foran maintained a $4.50 price target. Home Page Factoids Previous Update |