Regional Banks

rffrydr · Posted: Sun Oct 22, 2006 8:54 am Post subject: Regional Banks

Until last week's WAMU housing "surprise" earnings these things were at 52 week highs. This despite their direct exposure to housing and an inverted yield-curve, in normal conditions their bread and butter.

Already some giving up on the consumer:

http://biz.yahoo.com/ap/061020/sector_wrap_regional_banks.html?.v=1

HenryTo · Posted: Thu Dec 22, 2011 3:47 pm Post subject:

Following courtesy of S&P.

rffrydr · Posted: Thu Mar 17, 2011 8:29 am Post subject:

The toe-dip in this "space" has not been rewarding: 100 shares of bank to the Maryland bourgeois, Shore bank has been flat for a year and Regions just flails along. Thought that second one would be bad enough, and big enough, to be bought out by now--or at least catch one of the perennial rumours of same.

Now looking to take a real position in SunBancorp, the bank Wilbur Ross bought into last summer with a third higher market cap. The announced offering this morning should be the last dilution and we get the free option of modification to FDIC/Fed strangle-hold later in year--or at election time.

Banks really will come last in this recovery.
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rffrydr · Posted: Tue Oct 26, 2010 8:50 am Post subject:

Okay I'll bite now: picking up some Spring '11 ATM call spreads on Regions Bank for takeover. The takeover premium is now gone and earnings show this puppy is lame. The Canadian buyout is as close as it's ever gonna get.

Regions is strongly identified with its area yet big enough to make a difference for an acquirer. This is also the risk: too much pride. I don't expect a big premium--thus the spread.

Regions down 8% now on earnings.

Idea

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rffrydr · Posted: Sun Oct 03, 2010 6:29 am Post subject:

Tom Brown's pick, Synovus--not looking for normalized earnings until 2012 but peak charge-offs already well-behind and expecting price double.

http://bankstocks.com/ArticleViewer.aspx?ArticleID=6182&ArticleTypeID=2

Capital stuffit:

http://bankstocks.com/images/100910ch1.JPG
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rffrydr · Posted: Fri Apr 09, 2010 5:32 pm Post subject:

The new normal in FDIC takeover targets:

http://ftalphaville.ft.com/blog/2010/04/08/198896/would-you-stick-with-a-failed-bank/
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HenryTo · Posted: Wed Sep 16, 2009 10:30 am Post subject:

The Fed is now trying to lessen a potential systemic risk by conducting a broad review of commercial real estate exposure at regional banks:

http://www.businessinsider.com/john-carney-fed-worried-about-commercial-real-estate-exposure-at-regional-banks-2009-9

rffrydr · Posted: Wed Sep 02, 2009 12:30 am Post subject:

FDIC "laughs off" the 250 bank failure bait:

http://www.cnbc.com/id/15840232?video=1235983081&play=1
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rffrydr · Posted: Fri Jul 31, 2009 7:45 am Post subject:

Farm and energy states good way to play against this trend.
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Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Fri Jul 31, 2009 4:07 am Post subject:

The outlook for regional banks continues to be dire - my sense is that this will a huge overhang on regional banks for the next 24 months unless the US experiences a rip-roaring recovery:
---------------------------------------------------------------------------------
Commercial real estate mess hits regional bank bonds
Wed Jul 29, 2009 2:01pm EDT

By John Parry - Analysis
NEW YORK (Reuters) - The corporate bond market is signaling trouble ahead for those U.S. regional banks that are facing rising loan losses from commercial real estate.

U.S. bank bonds have rallied broadly since March, when the market was awash with fears for the financial system.

But while investors are increasingly confident that big banks can survive an extended downturn, they are worried about the next tide of toxic loans that threatens to inundate an already floundering economy.

Bonds of some U.S. regional banks with big commercial real estate exposure reflect this concern, analysts said. For example, the bonds of Birmingham, Alabama-based Regions Financial Corp (RF.N) have dropped about 17 percent in price since late March.

"The regional banks have two issues," said Tanya Azarchs, a bank credit rating analyst with Standard & Poor's in New York. Commercial property loans are an escalating threat to banks, while homebuilders' loans turned bad first, she noted.

"That wave of problems hit earlier obviously because the housing markets went into the tank a couple of years ago," Azarchs said.

This week's data suggested a bottom in the housing market is in sight, with a report on Tuesday showing U.S. home prices rose in May for the first time in three years.

Yet analysts fear that much of the drama in the commercial real estate market has yet to unfold.

U.S. commercial real estate prices, which have fallen about 35 percent from their peak in October 2007, are a major driver of banks' loan losses.

Bank loans for commercial real estate projects such as offices "had held up quite well until now, but the cracks are starting to appear," said Azarchs, who expects to see banks take more write-downs from commercial real estate for about two years.

About $2.2 trillion of U.S. commercial properties bought or refinanced since early 2004 have fallen below the price at which they changed hands, according to a report by Real Capital Analytics, a research firm based in New York.

SOUTHERN EXPOSURE

Among the regional U.S. banks most exposed to this next slide in brick-and-mortar holdings, analysts said, are three major names in the southeastern United States -- Regions Financial (RF.N), Synovus Financial Corp (SNV.N) and Colonial BancGroup Inc (CNB.N).

Last week, Regions said it had a much bigger-than-expected second-quarter loss due to mounting losses on commercial and real estate loans and set aside $912 million for credit losses -- triple the year-earlier amount.

And Synovus, based in Columbus, Georgia, reported a second-quarter net loss of $586.9 million, hurt by higher loan-loss provisions.

Colonial BancGroup, based in Montgomery, Alabama, said on Monday it signed a cease-and-desist order with the Federal Reserve and state banking regulators to address such issues as capital, liquidity and allowance for loan losses. The order was effective as of July 22 -- a week ago.
Bond fund managers and analysts warn that commercial real estate loan losses may keep rising for years.

About 4.5 percent of U.S. banks' commercial real estate loans were 30 or more days delinquent in the second quarter, up from 3.6 percent in the first quarter, according to Foresight Analytics.

The differing performance of bonds of large regional banks shows portfolio managers are being selective, based on how commercial real estate loan books are likely to fare, analysts said.

For instance, BB&T Corp (BBT.N) of Winston-Salem, North Carolina, has a strong balance sheet and limited mortgage and real estate exposure, so its bonds are being rewarded, said George Feiger, chief executive of Contango Capital Advisors in Berkeley, California.

Last month, BB&T repaid $3.1 billion it had received from the government's Troubled Asset Relief Program, or TARP -- a move that has helped its longer-dated, subordinated debt rebound to above 90 cents on the dollar. The debt was trading below 80 cents on the dollar in October, following Lehman Brothers' collapse, Feiger said.

Last week, BB&T sold $1 billion of three-year senior unsecured medium-term notes, yielding 3.86 percent. The yield, which moves inversely to the price, has since fallen to about 3.64 percent, according to MarketAxess.

In contrast, the longer-dated subordinated debt of Regions Financial Corp, whose business is similar to BB&T's but is more exposed to bad real estate loans, has fallen to around 75 cents on the dollar, near last October's levels, and down from more than 90 cents on the dollar in late March, Feiger noted.

"Now what you will see is performance, the ability to generate profits and to deal with troubled assets" as key factors deciding the demand for different banks' bonds, said Scott MacDonald, head of research at Aladdin Capital in Stamford, Connecticut.

Medium-sized financial institutions that may yet run into deeper trouble include regional banks from areas hardest hit by the real estate bust, including California, Florida, New Mexico and Utah, MacDonald said.

These potential trouble spots, however, differ from the general trend in which U.S. bank bonds have gained from a growing conviction that the global financial system is no longer staring into an abyss.

The aggregate yield spread of U.S. financial institutions' debt over comparatively safe government bonds had more than halved to 4.12 percentage points on Tuesday, from a record 8.80 percentage points in early March, according to Merrill Lynch data.

HenryTo · Posted: Tue Jun 02, 2009 11:08 am Post subject:

Morningstar's latest outlook on regional banks:

http://news.morningstar.com/articlenet/article.aspx?id=293472

rffrydr · Posted: Sat Apr 05, 2008 7:32 am Post subject:

Discounting the Banking Reform and the impact on regional banks:

http://www.cnbc.com/id/15840232?video=702191477

"Mark to Market" undercutting longterm investing.
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rffrydr · Posted: Wed Jan 09, 2008 8:55 am Post subject:

Bid your own CD:

http://www.reuters.com/article/pressRelease/idUS129858+09-Jan-2008+PRN20080109
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rffrydr · Posted: Thu Dec 13, 2007 3:07 pm Post subject:

Not a bad close on the Banks today, all things considered.

For what it is, I think the Fed plan will considered favorably over the next few months.
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HenryTo · Posted: Thu Dec 13, 2007 11:07 am Post subject:

WaMu hitting a new 7 1/2 year low today. Note that this is Oakmark Fund's third biggest holding as of the end of 3Q:

http://finance.yahoo.com/q/mh?s=WM

rffrydr · Posted: Wed Oct 10, 2007 8:19 am Post subject:

Downey Financial posterboy for regional bank fallout?

http://www.thestreet.com/s/downey-joins-warning-parade/newsanalysis/banking/10383718.html?puc=_googlen?cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA

http://stockcharts.com/h-sc/ui?s=$BANK&p=D&b=5&g=0&id=p66157578509

Strip Mall vacancy hitting 5year high.
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