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U.S. Bank Failures Hit 124 – Analyst Blog

Zacks Market Commentaries — Mon, 23 Nov 2009 14:00:00 +0000

U.S. regulators on Friday closed down Commerce Bank of Southwest Florida. Though there are some early signs of economic recovery, bank failures go on growing with rising loan defaults. This takes the total number of bank failures to 124, compared to 25 in 2008 and 3 in 2007. The weak economy continues to weigh heavily on banks with a stream of loan defaults.

As the industry has to tolerate bad loans that were made during the credit explosion, the trouble in the banking system goes even deeper, increasing the possibility of more bank failures. However, the regulators are trying to avoid panic by seizing banks slowly. Also, the slow seizing could be a strategy as it is hard to get buyers for so many failed banks.

Commerce Bank had total assets of $79.7 million and total deposits of about $76.7 million. The failure of Commerce Bank represents another impact on the Federal Deposit Insurance Corporation’s (FDIC) fund for protecting customer accounts, as it has been appointed receiver for the bank. The latest failure is expected to cost the FDIC's insurance fund about $23.6 million.

Bank failures have cost the federal deposit insurance fund more than $28 billion so far this year. The FDIC insures deposits at 8,195 institutions with roughly $13.5 trillion in assets. When a bank fails, it reimburses customers for deposits of up to $250,000 per account. The outbreak of bank failures has significantly stretched the regulator’s deposit insurance fund.

The fund corpus now stands below $10 billion, down from $45 billion a year ago. Central Bank of Stillwater, Minnesota, will assume all of Commerce Bank’s deposits. The acquirer also entered into a loss-share agreement with the FDIC on $61 million of Commerce Bank's $79.7 million in assets. In the second quarter of 2009, the number of banks on the FDIC's list of problem institutions grew to 416 from 305 in the first quarter. This is the highest since the savings and loan crisis in 1994.

Increasing loan losses on commercial real estate are expected to cause hundreds more bank failures in the next few years. The FDIC anticipates the bank failures to cost about $100 billion over the next four years. In order to replenish the declining fund, the FDIC board recently mandated the U.S. banks to pay fees for three years in advance.

Also, the regulators are considering requesting the healthy banks to bail out the government soon as it is necessary to replenish the deposit insurance fund, which has slipped to 0.22% of insured deposits, below the mandated minimum of 1.15%. The FDIC also has access to the Treasury Department credit line of up to $500 billion.

The failure of Washington Mutual last year was the largest in U.S. banking history. It was acquired by JP Morgan Chase (JPM). The other major acquirers of failed institutions since 2008 include Fifth Third Bancorp (FITB), U.S. Bancorp, Zions Bancorp (ZION), SunTrust Banks (STI), PNC Financial (PNC), BB&T Corporation (BBT) and Regions Financial (RF). The failed banks are victims of recession and rising loan losses.

As a result of the ongoing market turmoil, these institutions experienced massive capital erosion stemming from losses due to a significant exposure to collateralized mortgage obligations, commercial real estate loans and other commercial and industrial loans. All these factors were responsible for a drag on profitability and write-downs.

According to the FDIC, the bank failures have cost the federal deposit insurance fund more than $28 billion so far this year. Though current signals indicate that the economy may stabilize, we expect loan losses on commercial real estate portfolio to remain high for banks that hold large amounts of high-risk loans.
Read the full analyst report on "JPM"
Read the full analyst report on "FITB"
Read the full analyst report on "ZION"
Read the full analyst report on "STI"
Read the full analyst report on "PNC"
Read the full analyst report on "BBT"
Read the full analyst report on "RF"
Zacks Investment Research

Company News for November 17, 2009 – Corporate Summary

Zacks Market Commentaries — Tue, 17 Nov 2009 14:39:33 +0000

• Home Depot (NYSE:HD) topped estimates by a nickel as earnings for the third quarter reached 41 cents, on inline revenues of $16.36 billion, down 8%. Comparable sales fell 6.9%. The company issued 2010 guidance of $1.55, slightly ahead of $1.53 projections. According to the firm, "There is still a great deal of pressure in the housing and home improvement markets, though there are some positive signs of stabilization."

• ExxonMobil (NYSE:XOM) shares were upgraded to "overweight" at Barclays Capital (NYSE:BCS)

• A regulatory filing showed Berkshire Hathaway (NYSE:BRK.A) nearly doubled its Wal-Mart (NYSE:WMT) holdings; added almost 112 million Wells Fargo (NYSE:WFC) shares; the filing showed a 1.28 million holding of ExxonMobil (NYSE:XOM) shares; and 3.2 million shares of SunTrust Banks (NYSE:STI)

• UBS (NYSE:UBS) CEO Grubel outlined an ambitious goal of annual pre-tax profits of $14.89 billion over the next 3-5 years

• Dillard's (NYSE:DDS) reported a smaller than expected third quarter loss, with a non-GAAP loss of 3 cents, versus estimates of a 51 cent loss on revenues of $1.36 billion, off estimates of $1.38 billion. Same-store-sales fell 9%

Zacks Investment Research

Zacks Analyst Blog Highlights: JPMorgan Chase, Fifth Third Bancorp, Zions Bancorp, SunTrust Banks and PNC Financial – Press Releases

Zacks Market Commentaries — Tue, 17 Nov 2009 11:45:23 +0000

For Immediate Release

Chicago, IL – November 17, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: JPMorgan Chase (JPM), Fifth Third Bancorp (FITB), Zions Bancorp (ZION), SunTrust Banks (STI) and PNC Financial (PNC).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday’s Analyst Blog:

Bank Failures Rise to 123

The failed banks were -- Century Bank, FSB of Sarasota, Florida with $728 million in assets and $631 million in deposits, Orion Bank of Naples, Florida with about $2.7 billion in assets and $2.1 billion in deposits and Pacific Coast National Bank of San Clemente, California with $134.4 million in assets and $130.9 million in deposits.

These bank failures represent another sizable impact on the Federal Deposit Insurance Corporation’s (FDIC) fund for protecting customer accounts, as it has been appointed receiver for these banks. The failure of Century Bank is expected to cost the deposit insurance fund about $344 million, Orion Bank’s failure will cost about $615 million and the failure of Pacific Coast National Bank is expected to cost about $27.4 million.

The FDIC insures deposits at 8,195 institutions with roughly $13.5 trillion in assets. When a bank fails, it reimburses customers for deposits of up to $250,000 per account. The outbreak of bank failures has significantly stretched the regulator’s deposit insurance fund. At Jun 30, 2009, the fund corpus fell to $10.4 billion, the lowest since 1993, from $13.0 billion in the prior quarter.

IberiaBank, based in Lafayette, Louisiana will assume both Florida-based banks' $2.731 billion in deposits. Iberiabank also entered into a loss-share agreement with the FDIC on $656 million of Century Bank's assets and on $1.9 billion of Orion Bank's assets.

Tustin, California-based Sunwest Bank will assume all of Pacific Coast National Bank's deposits and essentially all of its assets.

In the second quarter of 2009, the number of banks on the FDIC's list of problem institutions grew to 416 from 305 in the first quarter. This is the highest since the savings and loan crisis in 1994.   Increasing loan losses on commercial real estate are expected to cause hundreds more bank failures in the next few years. The FDIC anticipates the bank failures to cost about $100 billion over the next four years.

In order to replenish the declining fund, the FDIC board recently mandated the U.S. banks to pay fees for three years in advance. Also, the regulators are considering requesting the healthy banks to bail out the government soon as it is necessary to replenish the deposit insurance fund, which has slipped to 0.22% of insured deposits, below the mandated minimum of 1.15%. The FDIC also has access to the Treasury Department credit line of up to $500 billion.

The failure of Washington Mutual last year was the largest in U.S. banking history. It was acquired by JPMorgan Chase (JPM). The other major acquirers of failed institutions since 2008 include Fifth Third Bancorp (FITB), Zions Bancorp (ZION), SunTrust Banks (STI) and PNC Financial (PNC).

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Zacks Investment Research

Bank Failures Rise to 123 – Analyst Blog

Zacks Market Commentaries — Mon, 16 Nov 2009 14:01:28 +0000

Regulators shut down 2 banks in Florida and 1 in California; U.S. bank failures reach 123 this year.

U.S. regulators on Friday shuttered two more banks in Florida and one in California. Though there are some early signs of economic recovery, bank failures continue unabated. This takes the total number of bank failures to 123, compared to 25 in 2008 and 3 in 2007.

The weak economy continues to weigh heavily on banks with a stream of loan defaults. As the industry has to tolerate bad loans that were made during the credit explosion, the trouble in the banking system goes even deeper, increasing the possibility of more bank failures. However, the regulators are trying to avoid panic by seizing banks slowly. Also, the slow seizing could be a strategy as it is hard to get buyers for so many failed banks.

The failed banks were -- Century Bank, FSB of Sarasota, Florida with $728 million in assets and $631 million in deposits, Orion Bank of Naples, Florida with about $2.7 billion in assets and $2.1 billion in deposits and Pacific Coast National Bank of San Clemente, California with $134.4 million in assets and $130.9 million in deposits.

These bank failures represent another sizable impact on the Federal Deposit Insurance Corporation’s (FDIC) fund for protecting customer accounts, as it has been appointed receiver for these banks. The failure of Century Bank is expected to cost the deposit insurance fund about $344 million, Orion Bank’s failure will cost about $615 million and the failure of Pacific Coast National Bank is expected to cost about $27.4 million.

The FDIC insures deposits at 8,195 institutions with roughly $13.5 trillion in assets. When a bank fails, it reimburses customers for deposits of up to $250,000 per account. The outbreak of bank failures has significantly stretched the regulator’s deposit insurance fund. At Jun 30, 2009, the fund corpus fell to $10.4 billion, the lowest since 1993, from $13.0 billion in the prior quarter.

IberiaBank, based in Lafayette, Louisiana will assume both Florida-based banks' $2.731 billion in deposits. Iberiabank also entered into a loss-share agreement with the FDIC on $656 million of Century Bank's assets and on $1.9 billion of Orion Bank's assets.

Tustin, California-based Sunwest Bank will assume all of Pacific Coast National Bank's deposits and essentially all of its assets.

In the second quarter of 2009, the number of banks on the FDIC's list of problem institutions grew to 416 from 305 in the first quarter. This is the highest since the savings and loan crisis in 1994.   Increasing loan losses on commercial real estate are expected to cause hundreds more bank failures in the next few years. The FDIC anticipates the bank failures to cost about $100 billion over the next four years.

In order to replenish the declining fund, the FDIC board recently mandated the U.S. banks to pay fees for three years in advance. Also, the regulators are considering requesting the healthy banks to bail out the government soon as it is necessary to replenish the deposit insurance fund, which has slipped to 0.22% of insured deposits, below the mandated minimum of 1.15%. The FDIC also has access to the Treasury Department credit line of up to $500 billion.

The failure of Washington Mutual last year was the largest in U.S. banking history. It was acquired by JPMorgan Chase (JPM). The other major acquirers of failed institutions since 2008 include Fifth Third Bancorp (FITB), U.S. Bancorp, Zions Bancorp (ZION), SunTrust Banks (STI), PNC Financial (PNC), BB&T Corporation (BBT) and Regions Financial (RF).

The failed banks are victims of recession and rising loan losses. As a result of the ongoing market turmoil, these institutions experienced massive capital erosion stemming from losses due to a significant exposure to collateralized mortgage obligations, commercial real estate loans and other commercial and industrial loans. All these factors were responsible for a drag on profitability and write-downs.  

According to the FDIC, the bank failures have cost the federal deposit insurance fund more than $28 billion so far this year. Though current signals indicate that the economy may stabilize, we expect loan losses on commercial real estate portfolio to remain high for banks that hold large amounts of high-risk loans.
Read the full analyst report on "JPM"
Read the full analyst report on "FITB"
Read the full analyst report on "ZION"
Read the full analyst report on "STI"
Read the full analyst report on "PNC"
Read the full analyst report on "BBT"
Read the full analyst report on ""
Zacks Investment Research

Zacks Analyst Blog Highlights: JP Morgan Chase, U.S. Bancorp, Zions Bancorp, SunTrust Banks and PNC Financial – Press Releases

Zacks Market Commentaries — Tue, 10 Nov 2009 11:45:35 +0000

For Immediate Release

Chicago, IL – November 10, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: JP Morgan Chase (JPM), U.S. Bancorp (USB), Zions Bancorp (ZION), SunTrust Banks (STI) and PNC Financial (PNC).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday’s Analyst Blog:

Bank Failure Tally Reaches 120

The FDIC entered into a purchase and assumption agreement with Ameris Bank, Moultrie, Georgia, to assume all of the deposits of United Security Bank; Liberty Bank and Trust Company, New Orleans, Louisiana, to assume all of the deposits of Home Federal Savings Bank; Alerus Financial, National Association, Grand Forks, North Dakota, to assume all of the deposits of Prosperan Bank; Central Bank of Kansas City to assume all of the deposits of Gateway Bank of St. Louis; and East West Bank, Pasadena, California, to assume all of the deposits of United Commercial Bank.

In order to replenish the declining fund, the FDIC board recently proposed that approximately 8,100 insured U.S. banks and savings institutions should pay fees for three years in advance. Also, the regulators are considering requesting the healthy banks to bail out the government as soon as it is necessary to replenish the deposit insurance fund, which has slipped to 0.22% of insured deposits, below the mandated minimum of 1.15%.  

In the second quarter of 2009, the number of banks on the FDIC's list of problem institutions grew to 416 from 305 in the first quarter. This is the highest since the savings and loan crisis in 1994. Increasing loan losses on commercial real estate are expected to cause hundreds more bank failures in the next few years. The FDIC anticipates the bank failures to cost about $100 billion over the next four years.  

The failure of Washington Mutual last year was the largest in U.S. history. It was acquired by JP Morgan Chase (JPM). Other major acquirers of failed institutions since 2008 include U.S. Bancorp (USB), Zions Bancorp (ZION), SunTrust Banks (STI), PNC Financial (PNC), to name a few.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Zacks Investment Research

Bank Failure Tally Reaches 120 – Analyst Blog

Zacks Market Commentaries — Mon, 09 Nov 2009 14:00:26 +0000

Regulators shut down 5 more banks in Georgia, Michigan, Minnesota, Missouri and California; tally hits 120 so far this year

U.S. regulators on Friday shuttered five more institutions in Georgia, Michigan, Minnesota, Missouri and California , as the recession continues to take its toll on banks. This takes the total number to 120, compared to 25 in 2008 and 3 in 2007.

As the industry has to tolerate bad loans that were made during the credit explosion, the trouble in the banking system goes even deeper, increasing the possibility of more failures. However, the regulators are trying to avoid panic by seizing banks slowly. Also, the slow pace of seizing could be a strategy as it is hard to get buyers for so many failed banks.

The failed banks were -- Georgia-based United Security Bank of Sparta with total assets of $157 million and total deposits of approximately $150 million, Michigan-based Home Federal Savings Bank of Detroit with total assets of $14.9 million and total deposits of approximately $12.8 million, Minnesota-based Prosperan Bank of Oakdale with total assets of $199.5 million and total deposits of approximately $175.6 million, Missouri-based Gateway Bank of St. Louis with total assets of $27.7 million and total deposits of approximately $27.9 million and California-based United Commercial Bank of San Francisco with total assets of $11.2 billion and total deposits of approximately $7.5 billion.

Failure of these institutions represents another sizable impact on the Federal Deposit Insurance Corporation’s (FDIC) fund for protecting customer accounts, as it has been appointed receiver for these banks. The failure of United Commercial Bank alone is expected to cost the federal deposit insurance fund approximately $1.4 billion. The other failures are expected to cost the deposit insurance fund a combined $132.7 million.  

The FDIC insures deposits at 8,195 institutions with roughly $13.5 trillion in assets. When a bank fails, it reimburses customers for deposits of up to $250,000 per account. The outbreak of financial institutions failing has significantly stretched the regulator’s deposit insurance fund.

At Jun 30, 2009, the fund corpus fell to $10.4 billion, the lowest since 1993, from $13.0 billion in the prior quarter. However, the FDIC has billions of loss reserves apart from the insurance fund and it can access a Treasury credit line of up to $500 billion.

The FDIC entered into a purchase and assumption agreement with Ameris Bank, Moultrie, Georgia, to assume all of the deposits of United Security Bank; Liberty Bank and Trust Company, New Orleans, Louisiana, to assume all of the deposits of Home Federal Savings Bank; Alerus Financial, National Association, Grand Forks, North Dakota, to assume all of the deposits of Prosperan Bank; Central Bank of Kansas City to assume all of the deposits of Gateway Bank of St. Louis; and East West Bank, Pasadena, California, to assume all of the deposits of United Commercial Bank.

In order to replenish the declining fund, the FDIC board recently proposed that approximately 8,100 insured U.S. banks and savings institutions should pay fees for three years in advance. Also, the regulators are considering requesting the healthy banks to bail out the government as soon as it is necessary to replenish the deposit insurance fund, which has slipped to 0.22% of insured deposits, below the mandated minimum of 1.15%.  

In the second quarter of 2009, the number of banks on the FDIC's list of problem institutions grew to 416 from 305 in the first quarter. This is the highest since the savings and loan crisis in 1994. Increasing loan losses on commercial real estate are expected to cause hundreds more bank failures in the next few years. The FDIC anticipates the bank failures to cost about $100 billion over the next four years.  

The failure of Washington Mutual last year was the largest in U.S. history. It was acquired by JP Morgan Chase (JPM). The other major acquirers of failed institutions since 2008 include Fifth Third Bancorp (FITB), U.S. Bancorp (USB), Zions Bancorp (ZION), SunTrust Banks (STI), PNC Financial (PNC), BB&T Corporation (BBT) and Regions Financial (RF).  

The failed banks are victims of recession and rising loan losses. As a result of the ongoing market turmoil, these institutions experienced massive capital erosion stemming from losses due to a significant exposure to collateralized mortgage obligations, commercial real estate loans and other commercial and industrial loans. All these factors were responsible for a drag on profitability and write-downs.

According to the FDIC, the U.S. banks overall lost $3.7 billion in the second quarter of 2009, compared to a profit of $7.6 billion in the prior quarter. Though there are some signs of economic recovery, we expect loan losses on commercial real estate portfolio to remain high for banks that hold large amounts of high-risk loans.
Read the full analyst report on "JPM"
Read the full analyst report on "FITB"
Read the full analyst report on "USB"
Read the full analyst report on "ZION"
Read the full analyst report on "STI"
Read the full analyst report on "PNC"
Read the full analyst report on "BBT"
Read the full analyst report on "RF"
Zacks Investment Research

Zacks Analyst Blog Highlights: U.S. Bancorp, JP Morgan Chase, Fifth Third Bancorp, Zions Bancorp and SunTrust Banks – Press Releases

Zacks Market Commentaries — Tue, 03 Nov 2009 11:30:33 +0000

For Immediate Release

Chicago, IL – November 3, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: U.S. Bancorp (USB), JP Morgan Chase (JPM), Fifth Third Bancorp (FITB), Zions Bancorp (ZION) and SunTrust Banks (STI).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday’s AnalystBlog:

Bank Failures Zoom to 115

The nine banks had 153 offices, out of which California National Bank had 68 branches. California National Bank was the biggest of FBOP's banks, the nation's 101st largest with assets of $7.1 billion.

Failure of these institutions represents another impact on the Federal Deposit Insurance Corporation's (FDIC) fund for protecting customer accounts, as it has been appointed receiver for these banks. The failure of 115 banks has cost the federal deposit insurance fund more than $25 billion so far this year. The FDIC insures deposits at 8,195 institutions with roughly $13.5 trillion in assets.

When a bank fails, it reimburses customers for deposits of up to $250,000 per account. The outbreak of financial institutions failing has significantly stretched the regulator's deposit insurance fund. As on June 30, 2009, the fund corpus fell to $10.4 billion, the lowest since 1993, from $13.0 billion in the prior quarter.

Minneapolis-based U.S. Bank, a division of U.S. Bancorp (USB), has agreed to assume the deposits and most of the assets of these nine banks. The FDIC and U.S. Bank agreed to share losses on about $14.4 billion of the combined purchased assets.

In the second quarter of 2009, the number of banks on the FDIC's list of problem institutions grew to 416 from 305 in the first quarter. This is the highest since the savings and loan crisis in 1994.

Increasing loan losses on commercial real estate are expected to cause hundreds more bank failures in the next few years. The FDIC anticipates the bank failures to cost about $100 billion over the next four years.

In order to replenish the declining fund, the FDIC board recently proposed that the U.S. banks should pay fees for three years in advance. Also, the regulators are considering requesting the healthy banks to bail out the government soon as it is necessary to replenish the deposit insurance fund, which has slipped to 0.22% of insured deposits, below the mandated minimum of 1.15%.

The failure of Washington Mutual last year was the largest in U.S. history. It was acquired by JP Morgan Chase (JPM). The other major acquirers of failed institutions since 2008 include Fifth Third Bancorp (FITB), U.S. Bancorp, Zions Bancorp (ZION), SunTrust Banks (STI), among others.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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312-265-9380
Visit: www.zacks.com

Zacks Investment Research

Sallie Mae Beats Estimate – Analyst Blog

Zacks Market Commentaries — Wed, 21 Oct 2009 14:27:26 +0000

SLM Corporation (SLM) or commonly know as Sallie Mae, reported third quarter core earnings of $164 million or 26 cents per share. Results were well ahead of the Zacks Consensus Estimate of 8 cents per share. The company had earned 19 cents in the year-ago period.

Results reflected improvements in the credit market and an increase in loan originations. However, loan loss provisions remain high.

Quarterly results included a gain of $74 million on the repurchase of debt and a $55 million accounting adjustment to reflect slower loan prepayments.

Sallie Mae posted a net income attributable to common stock of $116.5 million, or 25 cents per share, compared with a loss of $186 million, or 40 cents, in the year-ago period. Core earnings return on assets was 0.31%, up 6 basis points (bps) year-over-year.

Sallie Mae originated $6.9 billion in federal student loans in the reported quarter. This represents a 25% increase from the prior-year period. The company wants to service these loans which are eligible for the U.S. Department of Education’s purchase program.

However, the origination of private education loans (PELs) decreased significantly during the quarter. Sallie Mae originated $893 million in PELs compared to $2.1 billion in the year-ago quarter. Results reflected conservative underwriting approach and a decrease in loan demand, reflecting recession.

Net interest income (on a core basis) for the quarter was $689.6 million, down 3.2% year-over-year. Credit metrics weakened during the reported quarter. Provision for private education loan losses was $413 million, up from the second quarter's $362 million, while charge-offs rose to $443 million from $355 million in the previous quarter.

Annualized net charge-offs were 8.1% of average managed PELs in repayment (up 140 bps sequentially) while delinquencies increased 40 bps sequentially to 10.0% of managed PELs in repayment. Though management expects loan charge-offs to decrease from the current quarter, they are still expected to remain at historic highs.

Core fee income including the debt repurchase gain was $331 million. Results were well ahead of the prior-year period’s income of $64 million. However, we note that the prior-year quarter’s results included $242 million impairment in the company’s purchased-paper line of business.

The company reported operating expenses of $309 million, a 2.5% decrease from the prior-year quarter’s expense of $317 million.

Sallie Mae also remains focused on bolstering its capital levels. This included the completion of $2.8 billion in private education loan securitizations, reducing the asset-backed commercial paper or ABCP outstanding facilities to $9.4 billion from $12.5 billion at the end of the previous quarter, repurchasing of $1.4 billion of unsecured debt which generated a gain of $74 million and funding $3.2 billion through the Straight A conduit program.

The company is also restructuring its business in response to recent legislative moves and current capital market challenges. As part of the cost reduction efforts, Sallie Mae recognized $3.6 million of expenses in the quarter.

However, the House of Representatives has recently approved a bill that would effectively eliminate the role of private lenders in the student loan market and establish the government as the sole lender of student loans under a program run by the US Education Department.

If enacted, the bill would put an end to the Federal Family Education Loan Program and severely impact banks, particularly student lenders such as Sallie Mae. Besides Sallie Mae, other companies who could be at risk under the new legislation are Student Loan Corp. (STU), Nelnet Inc. (NNI), ITT Educational Services (ESI), SunTrust Banks (STI) and Corinthian Colleges Inc. (COCO).

Nevetheless, we expect that if the bill is enacted, Sallie Mae will be a major participant in the Department of Education’s servicing contract, under which it will service and collect government guaranteed loans. Pending further developments, we recommend to Hold the shares of Sallie Mae.
Read the full analyst report on "SLM"
Read the full analyst report on "NNI"
Read the full analyst report on "STU"
Read the full analyst report on "ESI"
Read the full analyst report on "STI"
Read the full analyst report on "COCO"
Zacks Investment Research

U.S. Bank Failures Reach 99 in ‘09 – Analyst Blog

Zacks Market Commentaries — Mon, 19 Oct 2009 14:01:27 +0000

U.S. bank failures continue unabated as U.S. regulators on Friday closed down San Joaquin Bank of Bakersfield, CA. This takes the total number of failed federally insured banks to 99 in 2009, compared to 25 in 2008 and 3 in 2007.

As of September 29, San Joaquin Bank, a subsidiary of San Joaquin Bancorp, had about $775 million in assets, $631 million in deposits and 5 branches. The bank had not been included in a previous list of 89 institutions that were undercapitalized as of March 31. But its first quarter amended filing showed that there were additional loan charge-offs and a higher net loss.

As of June 30, San Joaquin Bank’s Tier 1 leverage ratio was 4.12% and the total risk-based capital ratio was 6.70%. Though the Tier 1 leverage ratio was above the minimum level of 4% considered adequately capitalized, its total risk-based capital ratio was well below the minimum level of 8%.

The failure of San Joaquin Bank represents another impact on the Federal Deposit Insurance Corporation’s (FDIC) fund for protecting customer accounts as it has been appointed receiver for the bank. The bank failure is expected to cost the deposit insurance fund an estimated $103 million.

The FDIC insures deposits at 8,195 institutions with roughly $13.5 trillion in assets. When a bank fails, it reimburses customers for deposits of up to $250,000 per account. The outbreak of financial institution failures has significantly stretched the regulator’s deposit insurance fund. At June 30, 2009, the fund corpus fell to $10.4 billion, the lowest since 1993, from $13.0 billion in the prior quarter.

Ontario, California-based Citizens Business Bank, a subsidiary of CVB Financial (CVBF), will assume all of the deposits of San Joaquin Bank. So there will be no losses to any depositor.

In order to replenish the declining fund, the FDIC board recently proposed that the U.S. banks should pay fees for three years in advance. Also, the regulators are considering requesting the healthy banks to bail out the government as soon as it is necessary to replenish the deposit insurance fund, which has slipped to 0.22% of insured deposits, below the mandated minimum of 1.15%.

In the second quarter of 2009, the number of banks on the FDIC's list of problem institutions grew to 416 from 305 in the first quarter. This is the highest since the savings and loan crisis in 1994. Increasing loan losses on commercial real estate are expected to cause hundreds more bank failures in the next few years. The FDIC anticipates the bank failures to cost about $70 billion over the next five years.

The failure of Washington Mutual last year was the largest in the U.S. history. It was acquired by JP Morgan Chase (JPM). The other major acquirers of failed institutions since 2008 include Fifth Third Bancorp (FITB), U.S. Bancorp (USB), Zions Bancorp (ZION), SunTrust Banks (STI), PNC Financial (PNC), BB&T Corporation (BBT) and Regions Financial (RF).

The failed banks are victims of recession and rising loan losses. As a result of the ongoing market turmoil, these institutions experienced massive capital erosion stemming from losses due to a significant exposure to collateralized mortgage obligations, commercial real estate loans and other commercial and industrial loans. All these factors were responsible for a drag on profitability and write-downs.

According to the FDIC, the U.S. banks overall lost $3.7 billion in the second quarter of 2009, compared to a profit of $7.6 billion in the prior quarter.  Though current signals indicate that the economy may stabilize, we expect loan losses on commercial real estate portfolio to remain high for banks that hold large amounts of high-risk loans.
Read the full analyst report on "CVBF"
Read the full analyst report on "JPM"
Read the full analyst report on "FITB"
Read the full analyst report on "USB"
Read the full analyst report on "ZION"
Read the full analyst report on "STI"
Read the full analyst report on "PNC"
Read the full analyst report on "BBT"
Read the full analyst report on "RF"
Zacks Investment Research

Fifth Third Eyes FDIC Deals – Analyst Blog

Zacks Market Commentaries — Wed, 23 Sep 2009 22:05:44 +0000

Fifth Third Bancorp (FITB) is planning to acquire banks with the assistance of the Federal Deposit Insurance Corporation (FDIC). The company intends to expand within its operating footprint instead of venturing beyond that.

While the company has already evaluated some of the FDIC-assisted purchases, the deposit mix was neither suitable nor large enough. The company intends to acquire such banks with the FDIC’s assistance, which would significantly increase its market share in one or more markets.

Fifth Third already has the experience of acquiring such troubled banks. Last year, the company completed the conversion of Bradenton-based Freedom Bank, which bank regulators had declared insolvent on Oct. 31, 2008 and the FDIC was named the receiver.

Fifth Third Bank assumed approximately $250 million in failed Freedom Bank’s deposits from the FDIC. The transaction gave Fifth Third approximately $685 million in deposits in the Bradenton-Sarasota-Venice Metropolitan Statistical Area (MSA), and significantly raised Fifth Third's deposit market share in that market.

Deposit growth has consistently been Fifth Third's top priority. The company’s expansion strategy has clearly been retail-oriented, involving a combination of de novo branching and acquisitions. In June 2008, Fifth Third completed its acquisition of First Charter Corporation, a regional financial services company with assets of $4.8 billion, 57 operative branches in North Carolina and 2 in Georgia. This marked the company’s entry into the North Carolina market and added to its small presence in Georgia, thus diversifying its geographic footprint.

FDIC insures deposits of 8,195 institutions with roughly $13.5 trillion in assets. The organization reimburses customers for deposits of up to $250,000 per account if the bank fails. The turmoil in the financial market and the subsequent failure of more than 90 banks have significantly impacted FDIC’s deposit insurance fund. The fund corpus has decreased to $10.4 billion at Jun 30, 2009 from $13.0 billion reported at the end of the prior quarter.

Besides Fifth Third, the other acquirers of failed institutions since 2008 include U.S. Bancorp (USB), Zions Bancorp (ZION), Regions Financial (RF) and SunTrust Banks (STI).
Read the full analyst report on "FITB"
Read the full analyst report on "USB"
Read the full analyst report on "ZION"
Read the full analyst report on "STI"
Read the full analyst report on "RF"
Zacks Investment Research

Zacks Industry Rank Analysis Highlights: D.R. Horton, KB Home, Pulte Homes, Allstate, Hartford Financial Services, Travelers, Loews, Humana, Stericycle, C.R. Baird, Celgene, Gilead Sciences, AK Steel, Nucor, Regions Financial and Zions Bancorp – Press Releases

Charles Rotblut — Thu, 17 Sep 2009 12:00:10 +0000

For Immediate Release

Chicago, IL – September 17, 2009 – Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week’s analysis include D.R. Horton (DHI), KB Home (KBH), Pulte Homes (PHM), Allstate (ALL), Hartford Financial Services (HIG), Travelers (TRV), Loews (L), Humana (HUM), Stericycle (SRCL), C.R. Baird (BCR), Celgene (CELG), Gilead Sciences (GILD), Anadarko Petroleum (APC), EOG Resources (EOG), AK Steel (AKS), Nucor (NUE), U.S. Steel (X), Fifth Third (FITB), Regions Financial (RF), Suntrust Banks (STI) and Zions Bancorp (ZION).

Zacks Industry Rank Analysis is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.

This week: Third-Quarter Earnings Forecast

Though the economy has stabilized, third-quarter results for the majority of companies will still be below year prior levels.

Per share profits for the S&P 500 are projected to fall 15.4%. The median company is forecast to report a 14% drop in per share earnings. (The difference being that the S&P 500 forecast is a weighted projection.) More than 340 companies may have experienced a year-over-year drop in profits.

On a revenue basis, things are not much better. Median company sales are forecast to have dropped 7.2%.* More than 360 companies are expected to report a year-over-year drop in earnings.

It's important to realize that during July and August 2008, the economy was in fairly good shape. Lehman did not collapse until September 2008. Furthermore, the credit crunch's grip severely tightened over the 2-month span of September and October 2008. As a result, many companies are now facing tough comparisons, meaning year-over-over declines in profits now.

It should be noted, however, that not all comparisons will be difficult. In fact, some industries are forecast to report actual earnings growth.

Industries Likely To Show Growth

Homebuilders

It may sound shocking, but homebuilders are likely to have some of the best year-over-year comparisons in terms of profitability.

There are 2 reasons for this. First, conditions in the housing industry were deteriorating last year, with mortgages becoming increasingly hard to get. Second, the housing market is now stabilizing, as is evidenced by the rising number of new and existing home sales.

This change will allow D.R. Horton (DHI), KB Home (KBH) and Pulte Homes (PHM) to encourage shareholders with bottom line improvements by 50% or more. The improvements are relative, however, since all 3 companies will report sizable losses for Q309.

Insurance

Several insurance companies could impress investors with double-digit growth. Though some, like Allstate (ALL) and Hartford Financial Services (HIG), have the benefit of prior-year losses, others like Travelers (TRV) and Loews (L) are experiencing true growth. (Revenues and earnings will rise for TRV and L).

The surprisingly calm hurricane season (fingers crossed that it stays this way) has helped property and causality insurers. Nearly all insurance companies have also benefited from the rebound in the financial markets. The economy is a drag, though there seem to be certain segments where premiums are rising.

Health Care

Despite all the talk about reform, profits for the entire medical sector continue to rise. The sector is less economically sensitive and less affected by swings in commodity prices. As result, several medical companies are likely growing both revenues and earnings this quarter.

Those with the strongest growth rates will include Humana (HUM), Stericycle (SRCL), C.R. Baird (BCR), Celgene (CELG) and Gilead Sciences (GILD).

Industries Likely to Report Contraction

Commodity-Related

Commodity-related companies face the toughest year-over-year comparisons. Oil peaked in July 2008 and, though the commodity bubble deflated throughout the remainder of the quarter, profits were still very, very strong. As a result, energy and metals companies are projected to report significant drops in Q309 profits.

In the Energy sector, exploration & production (E&P) companies such as Anadarko Petroleum (APC) and EOG Resources (EOG) will report the biggest declines. Among metals companies, AK Steel (AKS), Nucor (NUE) and U.S. Steel (X) could all report losses after large profits in Q308.

Banks

Though government intervention has stabilized much of the financial sector, many banks remain unprofitable. High unemployment, a sustained high level of foreclosures and a weak commercial real estate market are all problem spots for the sector. As a result, analysts are projecting Fifth Third (FITB), Regions Financial (RF), Suntrust Banks (STI) and Zions Bancorp (ZION) to post losses.

It's All About Expectations

The one positive for the third-quarter earnings season is that there is a general expectation that the numbers will be bad. Therefore, even those companies that report losses will be measured up against the consensus estimates and not the year prior results. What we could well see is a repeat of second-quarter earnings season, where brokerage analyst forecasts proved to be too pessimistic.

As always, pay attention to guidance and the level of visibility companies have about the fourth quarter and the early part of 2010. The markets will want assurance that business conditions are starting to improve, even if sales still remain at depressed levels.

*12 companies were excluded from the revenue forecasts due to a lack of broker estimates. The inclusion of these companies would have not significantly altered the median revenue forecast.

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Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3:1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit From the Pros by going to http://at.zacks.com/?id=5610.

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Zacks Investment Research

Fitch Downgrades Sallie Mae – Analyst Blog

Zacks Market Commentaries — Wed, 16 Sep 2009 15:45:46 +0000

The corporate ratings of student lender SLM Corp. or Sallie Mae (SLM) was downgraded by Fitch Ratings yesterday. The outlook assigned was negative. The ratings downgrade reflects the agency’s concern about the company’s business model. Fitch expects the company to continue to shift to a fee-for-service business model with its subsidiary Sallie Mae Bank originating higher-risk private education loans.

Fitch downgraded the long-term issuer default and senior debt ratings to "BBB-" from "BBB", while preferred stock was downgraded to "BB" from "BB+". The short-term issuer default rating and short-term debt ratings were affirmed at "F3". About $34.4 billion of debt and preferred stock is affected by these actions.

To restore the $92 billion student loan market, the House Education committee approved a legislation, which closes the Federal Family Education Loan Program and shifts most of the student lending into the Education Department's Direct Loan program.

The bill is expected to go the House for a vote this week. If enacted, Sallie Mae is expected to be a major participant in the Department of Education’s servicing contract under which it will service and collect government guaranteed loans. Though the bill would allow some of the private firms to remain in the market as loan servicers, this business line would however be much smaller compared to that of loan originations.

The servicing contracts are also subject to renewal in five years and the federal government has the discretion regarding the distribution of the contracts and the servicing volume. Hence, any improper distributions of the servicing contracts will weaken the company’s profitability.

Sallie Mae’s management expects credit losses to pile up in the third quarter as non-traditional loans and loans without a co-borrower account for a lower percentage of loans entering repayment. Also, near-term asset quality trends remain a matter of concern.

Besides Sallie Mae, the other companies whose businesses could be at risk under the new legislation are Student Loan Corp. (STU), Nelnet Inc. (NNI), ITT Educational Services (ESI), SunTrust Banks (STI) and Corinthian Colleges Inc. (COCO).
Read the full analyst report on "SLM"
Read the full analyst report on "STU"
Read the full analyst report on "NNI"
Read the full analyst report on "ESI"
Read the full analyst report on "STI"
Read the full analyst report on "COCO"
Zacks Investment Research

Third-Quarter Earnings Forecast – Zacks Industry Rank Analysis

Charles Rotblut — Wed, 16 Sep 2009 05:00:00 +0000

Though the economy has stabilized, third-quarter results for the majority of companies will still be below year prior levels.

On a revenue basis, things are not much better. Median company sales are forecast to have dropped 7.2%.* More than 360 companies are expected to report a year-over-year drop in earnings.

It should be noted, however, that not all comparisons will be difficult. In fact, some industries are forecast to report actual earnings growth.

Industries Likely To Show Growth

Homebuilders

It may sound shocking, but homebuilders are likely to have some of the best year-over-year comparisons in terms of profitability.

Insurance

Health Care

Those with the strongest growth rates will include Humana (HUM), Stericycle (SRCL), C.R. Baird (BCR), Celgene (CELG) and Gilead Sciences (GILD).

Industries Likely to Report Contraction

Commodity-Related

Banks

It's All About Expectations

Sector Rank as of Sep 16
Sector	This Week's Zacks Rank	Last Week's Zacks Rank	FY09 Revisions Ratio	FY09 Estimates Revised Up	FY09 Estimates Revised Down
Consumer Staples	2.63	2.65	2.40	168	70
Conglomerates	2.73	2.73	4.67	14	3
Retail-Wholesale	2.76	2.74	1.88	506	269
Auto-Tires-Trucks	2.77	2.76	0.73	22	30
Computer and Technology	2.90	2.91	2.19	599	273
Medical	2.93	2.96	1.30	193	149
Construction	2.97	2.97	1.20	53	44
Basic Materials	2.98	3.02	1.55	118	76
Consumer Discretionary	3.00	2.97	1.05	122	116
Oils-Energy	3.00	3.01	0.87	238	274
Utilities	3.02	3.03	0.89	55	62
Industrial Products	3.05	3.03	1.36	87	64
Business Services	3.08	3.01	0.97	30	31
Finance	3.13	3.09	1.07	335	312
Aerospace	3.23	3.23	0.33	19	58
Transportation	3.23	3.23	0.70	81	115

View the Zacks Industry Rank List at http://www.zacks.com/zrank/zrank_inds.php. This interactive list allows you to see all of the companies, and their Zacks Rank, within more than 200 industries. The table above is the Zacks Sector Rank List, which shows the trend in estimate revisions on a broader scale.

*12 companies were excluded from the revenue forecasts due to a lack of broker estimates. The inclusion of these companies would have not significantly altered the median revenue forecast.Zacks Investment Research

Corus Bank Fails – 92 So Far in ‘09 – Analyst Blog

Zacks Market Commentaries — Mon, 14 Sep 2009 13:56:29 +0000

Regulators shut down 3 more banks including Corus; total failed banks in '09 reach 92

Three more banks including Corus Bank NA, a subsidiary of Corus Bankshares (CORS), were shuttered by the U.S. regulators on Friday as the recession continues to take its toll on banks. This takes the total number of failed federally insured banks in this year to 92, compared to 25 in 2008 and 3 in 2007.

Based in Chicago, the Corus Bank was a major lender to condominium, office and hotel projects. Corus is one of the largest banks to fail this year, with about $7 billion in total assets, $7 billion in deposits and 11 branches.

Two other small banks were Lacey, WA-based Venture Bank, with $970 million in assets and $903 million in deposits and Woodbury, MN-based Brickwell Community Bank, with $72 million in assets and $63 million in deposits.

The failure of these institutions represents another sizable impact on the Federal Deposit Insurance Corporation’s (FDIC) fund for protecting customer accounts, as it has been appointed the receiver for these banks. The failure of these three banks is expected to cost the deposit insurance fund an estimated $2 billion. The failure of Corus alone is expected to cost about $1.7 billion.

The FDIC insures deposits at 8,195 institutions with roughly $13.5 trillion in assets. When a bank fails, it reimburses customers for deposits of up to $250,000 per account. The outbreak of failing financial institutions has significantly stretched the regulator’s deposit insurance fund. At Jun 30, 2009, the fund corpus fell to $10.4 billion, the lowest since 1993, from $13.0 billion in the prior quarter.

The FDIC sold all of the deposits and $3 billion of Corus’ assets to MB Financial Bank, a subsidiary of MB Financial (MBFI). Much of Corus' assets are condominium loans backed by developments, and the FDIC is expected to sell them off within the next 30 days. This acquisition follows MB Financial's takeover of the failed InBank of Oak Forest, Illinois, last week.

Raleigh, North Carolina-based First-Citizens Bank & Trust Company will assume all of the deposits and $874 million of the assets of Venture Bank. FDIC and First-Citizens Bank agreed to share losses on about $715 million of Venture Bank’s assets. The FDIC said it will retain the remaining assets for disposal later.

Brickwell's $63 million deposits and all of its $72 million assets have been assumed by Mitchell, South Dakota-based CorTrust Bank.

In the second quarter of 2009, the number of banks on the FDIC's list of problem institutions grew to 416 from 305 in the first quarter. This is the highest since the savings and loan crisis in 1994. Increasing loan losses on commercial real estate are expected to cause hundreds more bank failures in the next few years. The FDIC anticipates the bank failures to cost about $70 billion over the next five years.

Recently, the FDIC allowed private investors to buy failed financial institutions. The regulator’s board voted to reduce the cash that private equity funds must maintain in banks they acquire.

The FDIC has no immediate plans to borrow money from the government to replenish the deposit insurance fund. However, it may increase the fees for U.S. banks this year to strengthen the fund. The agency has already raised $5.6 billion through an added assessment.

On August 14, banking operations of Colonial BancGroup were seized by the FDIC. Colonial’s deposits and assets were sold to BB&T Corporation (BBT). Following this, Guaranty Bank failed on Aug 21. The FDIC sold all of Guaranty Bank’s deposits and $12 billion of the assets to BBVA Compass, the U.S. division of Spain’s second-largest bank Banco Bilbao Vizcaya Argentaria (BBV). Colonial is the largest and Guaranty the second-largest bank failure so far this year, and the sixth and tenth-largest, respectively, in the U.S. history.

The failure of Washington Mutual last year is the largest bank failure in U.S. history. It was acquired by JP Morgan Chase (JPM). The other major acquirers of failed institutions since 2008 include Fifth Third Bancorp (FITB), U.S. Bancorp (USB), Zions Bancorp (ZION), SunTrust Banks (STI), PNC Financial (PNC) and Regions Financial (RF).

The failed banks are the victims of recession and rising loan losses. As a result of the ongoing market turmoil, these institutions experienced massive capital erosion stemming from losses arising from a significant exposure to collateralized mortgage obligations, commercial real estate loans and other commercial and industrial loans. All these factors were responsible for a drag on profitability and write-downs. According to the FDIC, U.S. banks overall lost $3.7 billion in the second quarter of 2009, compared to a profit of $7.6 billion in the prior quarter.

The current year has been difficult for consumers to pay off debt as a result of high unemployment, falling home prices and declining personal wealth.

However, on Thursday, U.S. Treasury Secretary Timothy Geithner said that the government won't provide additional funds to stabilize the financial markets and the government’s economic team has removed a $750 billion line item from the federal budget projections, since it is unlikely to be necessary.

But we think that although the economy is in a far better shape now than a year ago, there are persistent problems which need to be addressed by the government before shifting the strategy to growth. We believe that the U.S. economy will regain the growth momentum once these issues are resolved.

Most of the taxpayer-provided money was provided to financial institutions as these are the backbone of the economy and the primary victims of the recession. However, we continue to face further bank failures.

There are lingering concerns related to the banking industry as well as the economy. As a result, in its latest banking industry update, Moody's Investor Service (MCO) repeated that the U.S. banking system will continue to suffer at least through the end of the next year. We expect loan losses on commercial real estate portfolio to remain high for banks that hold large amounts of high-risk loans.
Read the full analyst report on "CORS"
Read the full analyst report on "MBFI"
Read the full analyst report on "BBT"
Read the full analyst report on "BBV"
Read the full analyst report on "JPM"
Read the full analyst report on "FITB"
Read the full analyst report on "USB"
Read the full analyst report on "ZION"
Read the full analyst report on "ST"
Read the full analyst report on "PNC"
Read the full analyst report on "RF"
Read the full analyst report on "MCO"
Zacks Investment Research

Bank Failures Continue – Analyst Blog

Zacks Market Commentaries — Mon, 31 Aug 2009 14:01:03 +0000

Three more U.S. banks failed; tally reaches 84 this year

Bank failures continue unabated as U.S. regulators on Friday closed down three more banks in California, Maryland and Minnesota. This takes the total number of failed federally insured banks this year to 84, compared to 25 in 2008 and 3 in 2007.

The failed banks were Ventura, California-based Affinity Bank, with about $1 billion in assets and $922 million in deposits; Baltimore-based Bradford Bank, with $452 million in assets and $383 million in deposits; and Forest Lake, Minnesota-based Mainstreet Bank, with $459 million in assets and $434 million in deposits.

Failure of these banks represents another sizable impact on the Federal Deposit Insurance Corporation’s (FDIC) fund for protecting customer accounts, as it has been appointed receiver for these banks. The failure of Affinity Bank is expected to cost the deposit insurance fund an estimated $254 million; that of Bradford Bank about $97 million and that of Mainstreet Bank about $95 million.

The FDIC insures deposits at 8,195 institutions with roughly $13.5 trillion in assets and when a bank fails, it reimburses customers for deposits of up to $250,000 per account. The outbreak of failing financial institutions has significantly stretched the regulator’s deposit insurance fund. At June 30, 2009, the fund corpus fell to $10.4 billion, the lowest since 1993, from $13.0 billion in the prior quarter.

San Diego-based Pacific Western Bank has agreed to acquire the deposits and assets of Affinity Bank. The FDIC and Pacific Western agreed to share losses on about $934 million of Affinity's loans and other assets.

Buffalo, New York-based Manufacturers and Traders Trust Company (M&T) has agreed to assume the deposits and assets of Bradford Bank. The FDIC will share losses on about $338 million of Bradford Bank's loans and other assets with M&T.

Stillwater, Minnesota-based Central Bank will acquire the deposits and assets of Mainstreet Bank. The FDIC will share losses on about $268 million of Mainstreet Bank's loans and other assets with Central Bank.

In the second quarter of 2009, the number of banks on the FDIC's list of problem institutions grew to 416 from 305 in the first quarter. This is the highest number since the savings and loan crisis in 1994. The FDIC anticipates U.S. bank failures to cost $70 billion through 2013.

According to the FDIC Chairman, the agency has no immediate plans to borrow money from the government to replenish the deposit insurance fund. However, the FDIC may impose an additional fee on U.S. banks this year to bolster the fund. The agency has already raised $5.6 billion through an added assessment.

In large, the failures are concentrated among newer companies. To address this issue, the FDIC said Friday that it is extending the term for maintaining higher capital levels for new banks to seven years from three years. During this period, the banks will face more frequent examinations.

Earlier this month, banking operations of Colonial BancGroup was seized by the FDIC. Colonial’s deposits and assets were sold to BB&T Corporation (BBT). Following this, Guaranty Bank failed on August 21. The FDIC sold all of Guaranty Bank’s deposits and $12 billion of the assets to BBVA Compass, the U.S. division of Spain’s second-largest bank Banco Bilbao Vizcaya Argentaria (BBV). Colonial is the largest and Guaranty the second-largest bank failure so far this year, and the 6th-largest and 10th-largest, respectively, in U.S. history. Guaranty was about half the size of Colonial Bank.

The failure of Washington Mutual last year is the largest bank failure in U.S. history. It was acquired by JPMorgan Chase (JPM). The other major acquirers of failed institutions during 2008 and 2009 include Fifth Third Bancorp (FITB), U.S. Bancorp (USB), Zions Bancorp (ZION), SunTrust Banks (STI), PNC Financial (PNC) and Regions Financial (RF).

The failed banks are victims of recession and rising loan losses. As a result of the ongoing market turmoil, these institutions experienced massive capital erosion stemming from losses arising from significant exposure to collateralized mortgage obligations (CMOs), commercial real estate loans and other commercial and industrial loans. All these factors were responsible for a drag on profitability and write-downs. According to the FDIC, U.S. banks overall lost $3.7 billion in the second quarter of 2009, compared to a profit of $7.6 billion in the prior quarter.

The current year has been difficult for consumers to pay off debt as a result of high unemployment, falling home prices and declining personal wealth.

Though current signals indicate that the economy may stabilize, we expect loan losses on commercial real estate portfolio to remain high for banks that hold large amounts of high-risk loans.
Read the full analyst report on "BBT"
Read the full analyst report on "BBV"
Read the full analyst report on "JPM"
Read the full analyst report on "STI"
Read the full analyst report on "RF"
Read the full analyst report on "FITB"
Read the full analyst report on "USB"
Read the full analyst report on "ZION"
Read the full analyst report on "PNC"
Zacks Investment Research

Company News for July 22, 2009 – Corporate Summary

Zacks Market Commentaries — Wed, 22 Jul 2009 14:28:55 +0000

• Procter & Gamble (NYSE:PG) is reportedly engaged in later-stage discussions regarding the possible sale of its prescription drug unit, which could bring in as much as $3 billion. Possible bidders include private equity firm Cerberus Capital management and Warner Chilcott (NASDAQ: WCRX)

• Boeing (NYSE:BA) reported estimate-beating second quarter earnings of $1.41 a share, ahead of estimates by 20 cents, on inline revenues that rose 1.1% to $17.15 billion. The firm said it sees 2009 earnings of $4.70 to $5.00 per share, well ahead of Street estimates of $4.52

• US Bancorp (NYSE:USB) reported second quarter earnings of 12 cents a share, two pennies above estimates, as revenues gained 7.1% to $4.2 billion

• Altria (NYSE:MO) reported second quarter earnings of 50 cents a share, beating estimates by 3 cents, on revenues of $6.7 billion, which topped estimates

• Eli Lilly (NYSE:LLY) reported better-than-expected second quarter earnings of $1.12, a dime ahead of forecasts, on in-line revenues that rose 0.8% to $5.3 billion. The firm raised its 2009 earnings guidance to $4.20 to $4.30 per share, versus its prior guidance of $4.00 to $4.25 per share

• Pfizer (NYSE:PFE) beat consensus forecasts, posting second quarter earnings of 48 cents a share, one penny above estimates, on inline revenues, which fell 9.4% to $11 billion

• PepsiCo (NYSE:PEP) topped Street expectations with second quarter earnings of $1.06, versus estimates of $1.00, on revenues of $10.59 billion, off estimates of $10.99 billion. The company reaffirmed 2009 guidance of medium-to-high single-digit, core earnings per share growth from last year's $3.68

• Whirlpool (NYSE:WHR) reported estimate-topping second quarter results of $1.04, ahead of Street estimates of 51 cents, on a revenue miss at $4.17 billion versus estimates of $4.2 billion. The company's 2009 guidance of $3.50-$4.00 exceeded consensus projections of $3.41

• SunTrust Banks (NYSE:STI) reported its second quarter loss of 41 cents beat estimates by 11 cents, on inline revenues of $2.2 billion, down 15.6%

• Bank of New York (NYSE:BK) reported a second quarter earnings miss at 46 cents versus estimates of 53 cents, as revenues dropped 17.7% to $3.2 billion

Zacks Investment Research

Zacks Industry Rank Analysis Highlights: Stericycle, Quest Diagnostic, Biogen Idec, AmeriSourceBergen, Abbott Labs, Tesoro, AK Steel, Nucor, United States Steel, Fifth Third, Zions Bancorp, Suntrust Banks, Franklin Resources and Micron – Press Releases

Zacks Market Commentaries — Thu, 25 Jun 2009 13:17:37 +0000

For Immediate Release

Chicago, IL - June 25, 2009 - Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week's analysis include Stericycle (SRCL), Quest Diagnostic (DGX), Biogen Idec (BIIB), AmeriSourceBergen (ABC), Abbott Labs (ABT), Sunoco (SUN), Tesoro (TSO), AK Steel (AKS), Nucor (NUE), United States Steel (X), Fifth Third (FITB), First Horizon National (FHN), Zions Bancorp (ZION), Suntrust Banks (STI), Franklin Resources (BEN), AllianceBernstein Holding (AB), Texas Instruments (TXN), National Semiconductor (NSM) and Micron (MU).

Zacks Industry Rank Analysis is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.

This Week: Second-Quarter Earnings Outlook

Second-quarter earnings will be ugly.

Median EPS is projected to drop 21.2%. Nearly 75% of S&P 500 members are forecast to report earnings that are lower than a year ago. 62 companies are projected to have lost money.

These numbers are not unexpected given that we remain in the midst of a recession. They could even prove to be too pessimistic given the propensity of companies to surprise and the relative improvements in economic conditions.

Growth Industries

The one sector projected to show the strongest growth is also the one with the highest political risk - Medical. The majority of medical care providers, health insurers, pharmacy benefit managers and drug companies should report a year-over-year increase in profits.

Zacks #2 Rank ("buy") stocks expected to report growth include Stericycle (SRCL) (+14.4%), Quest Diagnostic (DGX) (+13%), Biogen Idec (BIIB) (+9.8%), AmeriSourceBergen (ABC) (+7%) and Abbott Labs (ABT) (+5%).

The medical sector is less economically sensitivity than other sectors. Plus, the expansion of Medicare Part D has made prescriptions more affordable.

The obvious risk, however, is the ongoing discussions about healthcare reform. Though these talks have no impact on current earnings, they could significantly impact future earnings.

Another area of growth is refining. Sunoco (SUN) and Tesoro (TSO) are expected to have increased second-quarter profits by 46% and 223.7% respectively. These impressive numbers are a reflection of last year's spike in oil prices.

The problem is that the recent rise in oil prices is hurting margins.

Full-year earnings estimates are falling for both companies, which means even if TSO and other refiners top expectations, guidance could be weak. Our oil analyst, Sheraz Mian, downgraded TSO last month to a long-term sell recommendation.

Industries With Profit Declines

Since most industries will show a year-over-year decline in median EPS growth, I'm going to focus on 2 industries with the biggest projected declines.

Steel is among the worst, with 3 companies - AK Steel (AKS), Nucor (NUE) and United States Steel (X) - projected to report year-over-year declines in excess of 130% each.

These companies are facing very tough comparables because of last year's commodity bubble. Though AK Steel (AKS) said on Tuesday that its results would show a sequential quarterly improvement, any narrower loss would be because of cost-cutting and not improving business conditions.

NUE is a Zacks #4 Rank ("sell") stock. AKS and X are Zacks #3 Rank ("hold") stocks.

Banks will not fare much better. Regional banks are forecast to report a median decline of 98.7% and the large banks are projected to report a 61.3% decrease. Though the government has deemed some banks too big to fail, the FDIC has shut down 40 since the start of the year.

Home foreclosures have yet to peak and credit card default rates are rising. At the same, the ongoing housing slump and tighter credit standards continue to hurt mortgage originations. And though Q208 was not great for the banks, the credit crunch was not as severe as what was witnessed in the second half of 2009.

The largest year-over-year declines is likely to come from Fifth Third (FITB) (-689.3%, the bank is swinging from a profit, on an adjusted basis, to a loss), First Horizon National (FHN) (-211.6%), Zions Bancorp (ZION) (-189.7%) and Suntrust Banks (STI) (-166%).

Where To Look For Surprises

There are 2 industry groups that I would keep an eye on for potential positive surprises - Finance-Investment Management and Electronic-Semiconductor.

As I said last week, profit forecasts are rising for several mutual fund managers, including Franklin Resources (BEN) and AllianceBernstein Holding (AB).

Positive mutual fund inflows and growth in assets under management have some analysts rethinking their forecasts. However, since many of the covering analysts have not followed suit, the consensus earnings estimates could prove to be too low.

The semiconductor industry appears to be in the early stages of a recovery. Therefore, while profits will be terrible (down -61.5%), they could very well be better than forecast.

Texas Instruments (TXN) raised its Q2 forecast earlier this month, SEMI's (a chip industry association) book-to-bill ratio has increased for 3 consecutive months and analysts have been revising their full-year forecasts higher. Plus, National Semiconductor (NSM) beat by 18 cents when it reported last week.

We'll get another early indicator of how chip earnings look relative to expectations this afternoon, when Micron (MU) reports. The consensus earnings estimate calls for a loss of 43 cents per share.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3:1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit From the Pros by going to http://at.zacks.com/?id=5610.

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Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Contact: Charles Rotblut, CFA
Company: Zacks.com
Phone: 312-265-9352
Email: pr@zacks.com
Visit: www.zacks.com

Zacks Investment Research

Second-Quarter Earnings Outlook – Zacks Industry Rank Analysis

Charles Rotblut — Wed, 24 Jun 2009 05:00:00 +0000

Second-quarter earnings will be ugly.

Median EPS is projected to drop 21.2%. Nearly 75% of S&P 500 members are forecast to report earnings that are lower than a year ago. 62 companies are projected to have lost money.

Growth Industries

The medical sector is less economically sensitivity than other sectors. Plus, the expansion of Medicare Part D has made prescriptions more affordable.

The obvious risk, however, is the ongoing discussions about healthcare reform. Though these talks have no impact on current earnings, they could significantly impact future earnings.

Another area of growth is refining. Sunoco (SUN) and Tesoro (TSO) are expected to have increased second-quarter profits by 46% and 223.7%, respectively. These impressive numbers are a reflection of last year's spike in oil prices.

The problem is that the recent rise in oil prices is hurting margins.

Full-year earnings estimates are falling for both companies, which means even if SUN and TSO top expectations, guidance could be weak. Our oil analyst, Sheraz Mian, downgraded TSO last month to a long-term sell recommendation.

Industries With Profit Declines

Since most industries will show a year-over-year decline in median EPS growth, I'm going to focus on 2 industries with the biggest projected declines.

Steel is among the worst, with 3 companies - AK Steel (AKS), Nucor (NUE) and United States Steel (X) - projected to report year-over-year declines in excess of 130% each.

These companies are facing very tough comparables because of last year's commodity bubble. Though AKS said yesterday that its results would show a sequential quarterly improvement, any narrower loss would be because of cost-cutting and not improving business conditions.

NUE is a Zacks #4 Rank ("sell") stock. AKS and X are Zacks #3 Rank ("hold") stocks.

The largest year-over-year declines are likely to come from Fifth Third (FITB) (-689.3%, the bank is swinging from a profit, on an adjusted basis, to a loss), First Horizon National (FHN) (-211.6%), Zions Bancorp (ZION) (-189.7%) and Suntrust Banks (STI) (-166%).

Where To Look For Surprises

There are 2 industry groups that I would keep an eye on for potential positive surprises - Finance-Investment Management and Electronic-Semiconductor.

As I said last week, profit forecasts are rising for several mutual fund managers, including Franklin Resources (BEN) and AllianceBernstein Holding (AB).

The semiconductor industry appears to be in the early stages of a recovery. Therefore, while profits will be terrible (down -61.5%), they could very well be better than forecast.

We'll get another early indicator of how chip earnings look relative to expectations tomorrow, when Micron (MU) reports. The consensus earnings estimate calls for a loss of 43 cents per share.

Zacks Premium and Zacks Elite subscribers can view the Zacks Industry Rank List at http://www.zacks.com/zrank/zrank_inds.php. This interactive list allows you to see all of the companies, and their Zacks Rank, within more than 200 industries. Shown below is the Zacks Sector Rank List, which shows the trend in estimate revisions on a broader scale.

Sector Rank as of Jun 24
Sector	This Week's Zacks Rank	Last Week's Zacks Rank	FY09 Revisions Ratio	FY09 Estimates Revised Up	FY09 Estimates Revised Down
Retail-Wholesale	2.57	2.52	2.79	419	150
Consumer Staples	2.78	2.80	1.91	174	91
Medical	2.87	2.91	1.20	243	202
Consumer Discretionary	2.89	2.85	0.93	136	146
Computer and Technology	2.93	2.94	1.98	513	259
Utilities	2.98	2.97	0.74	60	81
Oils-Energy	3.01	3.02	0.94	340	363
Business Services	3.02	3.01	1.02	50	49
Construction	3.05	3.18	0.44	36	81
Conglomerates	3.07	2.96	0.64	9	14
Aerospace	3.08	3.13	0.44	11	25
Auto-Tires-Trucks	3.11	3.06	0.51	21	41
Basic Materials	3.13	3.10	0.71	131	185
Industrial Products	3.16	3.18	0.78	85	109
Finance	3.17	3.17	0.85	454	533
Transportation	3.30	3.25	0.40	77	191

Charles Rotblut, CFA, is the senior market analyst for Zacks.com. He can be reached at crotblut@zacks.com.

Zacks Investment Research

The Strangle Options Play: When How To Use This Trading Strategy

Contrarian Profits — Tue, 09 Jun 2009 18:51:00 +0000

pIn my column last week, I showed you how to use straddle options to take advantage of market/stock volatility when the direction is uncertain. This week, we hop over the fence to the straddle’s sister strategy - the strangle options play./p pTo refresh your memory, a straddle is when you essentially bet on both sides of a trade by using options that have the same strike price and same expiration date./p pFor example, if you like strongBank of America/strong (NYSE: a href="http://www.google.com/finance?q=BAC"BAC/a), currently trading around $12, you could buy a $12 call option and a $12 put option. In doing so, the goal is that once the stock moves in a particular direction, one option will move high enough that it offsets the loss#8230;/p

U.S. Unveils the Results of Bank Stress Tests

QualityStocks — Fri, 08 May 2009 14:10:57 +0000

U.S. regulators finally revealed the results of the long-awaited stress tests for the nation’s largest banks. Regulators urged ten of the country’s nineteen largest financial institutions to raise about $75 billion in new capital to withstand possible future losses. These institutions will attempt to raise capital by selling common stock among other methods. Among the institutions [...]

Bank of America: Rumors & Denials – Analyst Blog

Zacks Market Commentaries — Wed, 06 May 2009 18:03:43 +0000

Highlights include Bank of America Corp. (BAC), Citigroup Inc. (C), Wells Fargo & Co. (WFC), SunTrust Banks, inc. (STI) and Regions Financial Corp. (RF).

Over the past several days there have been many rumors and "leaked reports" on the need of additional capital by all the banks "stress tested" by the regulators -- and by Bank of America (BAC) and Citigroup (C) in particular. This morning, many newspapers have reported that the capital shortfall for Bank of America is $35 billion.

The report appears to be true, given that The New York Times has quoted bank's chief administrative officer. It also appears that the bank is planning to convert the TARP preferred shares to common equity.

While the amount of shortfall is not shocking, the fact that the bank had recently been denying that it needs additional capital certainly is shocking.

Last week, The Financial Times reported that Bank of America was preliminarily found to be need of more than $10 billion of capital, and that the bank was working on plans to raise fresh funds. The report was termed as "completely inaccurate," by the bank (well, technically it was inaccurate since the actual shortfall was much bigger).

During the 1Q09 Earnings Call, Bank's CEO Ken Lewis stated, "We absolutely don't think we need additional capital." Earlier in March, Lewis had even said that, "[The] request for $20 billion of government money to prop up its acquisition of Merrill Lynch was a tactical mistake."

Now there are two possibilities: either the bank's top management (CEO in particular) was completely unaware of its financial health, or they were hiding the facts from the investors. Both are equally serious issues. The banks are supposed to regularly "stress test" their portfolios, as a form of risk assessment and arrive at an adequate capital cushion to protect against the projected losses.

The bank's assessment should not have been vastly different from the assessment done by the regulators, given how "un-stressful" the Fed's stress tests were. And if the former is not true, then the bank's management is certainly guilty of misleading its investors and shareholders.

The focus now is on other banks being reported to be in need to more capital, including Citigroup, Wells Fargo (WFC), SunTrust (STI) and Regions Financial (RF).

Read the full analyst report on "WFC"
Read the full analyst report on "RF"
Zacks Investment Research

Earnings Trends Highlights: Verizon, AT&T, Texas Instruments, BJ Services and Keycorp – Press Releases

Dirk Van Dijk — Tue, 05 May 2009 10:16:41 +0000

Earnings Trends Highlights: Verizon, AT&T, Texas Instruments, BJ Services and Keycorp

For Immediate Release

Chicago, IL - May 5, 2009 - Zacks Research Director, Dirk Van Dijk says that S&P 500 earnings are continuing to show red ink. He tracks companies on the Zacks.com web site, naming names, while forecasting trends for the months ahead.

Key Points from Van Dijk's Latest Earnings Assessment

Total earnings are running 21.9% below last year, but up sharply from Q4
Financials much are better than expected, but quality of earnings is awful
Ex-Financials, total earnings are down 28.4% from a year ago and down 15.8% from Q4
Total net income down in all sectors but Financials, Utilities and Health Care
Health Care, Tech and Discretionary all showing lots of positive surprises
Full S&P 500 total net income expected to be 27.2% lower than Q1 2008
Decline expected to continue in Q2, with earnings down 31.9%
Total net income expected to fall 14.9% for all of 2009, after 18.9% fall in 2008
Bottom up estimate for S&P 500 now $57.76 in 2009 versus $59.36 last week.

Total Net Income Growth

First quarter total net income is 21.9% below what the same 289 firms reported a year ago, but 35.0% above what those firms reported in the fourth quarter. However, relative to the fourth quarter, almost all the improvement has come from the "earnings" of the Financial sector. (I put the term earnings in quotation marks due to the extraordinarily low quality of the earnings at the big banks that are driving the turnaround. It is hard to take seriously earnings that are based on mark to market for liabilities but not for assets. However, the accountants have signed off on them, so we include them in the database. )

Excluding the 51 Financial firms that have reported, total net income is down 28.4% from a year ago and 15.8% lower than in the fourth quarter.

Aside from the Financials, only the Utility sector is showing any significant gain in total net income at 6.1%. Health Care squeezes into the plus column, but by less than 0.1%.

Worst hit so far are the Materials (-71.4%) and Energy (-55.9%) sectors. They however are facing some very tough comparisons. The commodity boom was in full swing a year ago, and materials like copper were flying just as high as oil prices were...today, they are not flying quite so high.

The Consumer Discretionary (-54.7%) and Industrial (-37.4%) have also seen large drops in total net income. What do the 4 bad sectors have in common? They are the four most cyclical sectors of the economy.

Leaving aside the special case of the Financials, the 3 sectors that are doing best - Utilities, Health Care and Consumer Staples (-9.2%) - are noteworthy for being non-cyclical. Thus the pattern of earnings growth (or the lack there of) is exactly what you would expect in the middle of the worst economic downturn since the Depression.

The weak earnings are offset by the fact that the bar was set very low this quarter. Brokerage analysts expected Armageddon and we only got a disaster. As a result, positive earnings surprises are outpacing disappointments by a ratio of 2.3:1. The median surprise is a very healthy 4.8%.

Some of the sectors with the worst growth in total net income actually have the highest surprise ratios. In the Energy and Materials sectors positive surprises are running 3.5:1 over disappointments. Consumer Discretionary firms are seeing surprises running 4.3:1 over disappointments.

On the other hand, Health Care is doing even better than any of those sectors with a ratio of 4.8:1.

Scorecard and Median EPS Growth Rates

Surprise ratio at 2.30, median surprise 4.76% with 289 firms reporting
Median EPS decline reported so far is 18.1%
A 12.0% decline is seen in the first quarter for those yet to report
Positive surprises concentrated in the Discretionary, Health Care and Tech Sectors
Every sector but Telecom and Health Care is down so far among the reported firms
Among yet to report, Utilities, Health Care barely positive, the rest negative

We now have over half the reports in and positive surprises are outnumbering disappointments. That is however, mostly because the bar was set very low. Firms learned a long time ago that it is better to under promise and over deliver, so it is quite normal for positive surprises to outnumber disappointments.

This quarter's ratio is actually slightly below what we were accustomed to seeing in recent years. Still, better more positive surprises than more disappointments.

Half the firms have reported declines in EPS of 18.1% or more. Over two-thirds have reported negative EPS growth. Telecom is leading the EPS growth pack, but that is based on the results of only 4 firms. Health Care is the only other sector where more than half the firms are reporting growing EPS, with a median gain of 7.1%.

In 4 sectors, Industrials, Tech, Financials and Materials more than half the firms have seen EPS decline by a third or more.

The Zacks Revisions Ratio: 2009

Revisions ratio for full S&P 500 is up to 0.65, from 0.51 last week
Two months ago the ratio was 0.26; the improvement has been steady and strong
Five sectors above "one"; 4 are in positive territory
Although still in negative territory, the revisions ratio has risen significantly
Telecom and Tech lead the pack, both Consumer sectors are also strong
Energy and Financials still seeing more than 3 cuts for every increase.
Ratio of firms with rising to falling mean estimates rises to 0.51 from 0.40
Total number of revisions (4-week total) up to 3,161 from 2,386 last week (32.5%)
Increases up to 1,246 from 805 (54.8%); cuts up to 1,915 from 1,581 (21.1%)

The revisions ratio improved sharply, but remains in negative territory. (Generally we consider anything below 0.80 to be negative, and anything above 1.25 to be positive.)

Telecom and Tech are now in positive territory, with both Consumer sectors also knocking on the door. This is a very positive sign coming not long after every sector had been deep in negative territory.

Telecom and Technology leads the pack this week. Both Verizon (VZ) and AT&T (T) had far more increases than cuts. Within the Tech sector Stocks with very positive revisions activity worth mentioning include Apple (AAPL), Broadcom (BRCM), Intel (INTC) and Texas Instruments (TXN).

At the other end of the spectrum, Energy and Financials still have estimate cuts swamping increases. Very weak Energy stocks include BJ Services (BJS) and Anadarko (APC). Among the Financials, companies that are noteworthy for their weakness include Keycorp (KEY) and Suntrust Banks (STI).

The Zacks Revisions Ratio: 2010

The Overall picture for 2010 is similar to that of 2009
Revisions ratio up to 0.59 from 0.46
Positive surprises are leading to more upward revisions
Ratio of rising to falling mean estimates rises to 0.50 from 0.47
Tech and Staples the strongest; Energy and Utilities the weakest for 2010
Total revisions activity should peak in a few weeks
Total number of revisions rises to 2,355 from 1,757 (34.0%)
Estimate increases rises to 577 from 480 (20.2%); cuts rise to 1,200 from 1,142 (5.1%)
Energy, Utilities and Financials slammed

The 2010 revisions ratio story is pretty much the same as 2009. A low but improving revisions ratio. Just a month ago the 2010 revisions ratio was at 0.27, now it is at 0.59.

The Industrials sector has shown significant improvement, but still has more than 3 cuts per increase. Not long ago, cuts in the sector were running over 20;1 over increases. The Tech sector is the strongest, with particular strength among semiconductor stocks.

Earnings Shares and P/Es

P/Es are too low since earnings estimates are too high
Health Care expected to take earnings crown from Energy in 2009 and keep it in 2010
Energy's earnings share expected to plunge to 11.9% from 23.7%
Financials' 2009 earnings share expected to rise to 10.7% from -1.7% in 2008.
Consumer Discretionary's market cap share far above earnings shares (overvalued?)
Health Care's market cap is share well below earnings shares (undervalued?)
12-month forward S&P P/E of 13.87 equates to earnings yield of 7.21%, which is very attractive relative to 10-year T-note yield of 3.16%, but only mediocre relative to 5.43% A-rated 10-year corporate.
T-note rates are rising and more realistic earnings yields of near 5.72% based on lower earnings ($50) means the spread, while still attractive, is not overwhelming.

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About the Zacks Rank

Since 1988, the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988, #1 Rank Stocks have generated an average annual return of +28%. During the 2000-2002 bear market, Zacks #1 Rank stocks gained +43.8%, while the S&P 500 tumbled -37.6%. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). Since 1988, Zacks Rank #5 stocks have underperformed the S&P 500 by 82% annually (+2% versus +10%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=5186.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. The company continually processes stock reports issued by 3,000 analysts from 150 brokerage firms. It monitors more than 200,000 earnings estimates, looking for changes.

Then, when changes are discovered, they’re applied to help assign more than 4,400 stocks into five Zacks Rank categories: #1 Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. This proprietary stock-picking system continues to outperform the market by a nearly 3-to-1 margin.

The best way to unlock profitable Zacks' stock recommendations and market insights is through the free daily email newsletter: "Profit from the Pros." It provides a steady flow of profitable ideas GUARANTEED to be worth your time. Register for your free subscription to Profit from the Pros by going to http://at.zacks.com/?id=5187.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Contact: Dirk Van Dijk, CFA
Company: Zacks.com
Phone: 312-265-9211
Email: pr@zacks.com
Visit: www.Zacks.com

Zacks Investment Research

Forecasts Respond to Positive Surprises – Earnings Trends

Dirk Van Dijk — Mon, 04 May 2009 05:00:00 +0000

Highlighted stocks include Verizon (VZ), AT&T (T), Apple (AAPL), Broadcom (BRCM), Intel (INTC), Texas Instruments (TXN), BJ Services (BJS), Anadarko (APC), Keycorp (KEY) and Suntrust Banks (STI).

Key Points:

Total earnings are running 21.9% below last year, but up sharply from Q4
Financials much are better than expected, but quality of earnings is awful
Ex-Financials, total earnings are down 28.4% from a year ago and down 15.8% from Q4
Total net income down in all sectors but Financials, Utilities and Health Care
Health Care, Tech and Discretionary all showing lots of positive surprises
Full S&P 500 total net income expected to be 27.2% lower than Q1 2008
Decline expected to continue in Q2, with earnings down 31.9%
Total net income expected to fall 14.9% for all of 2009, after 18.9% fall in 2008
Bottom up estimate for S&P 500 now $57.76 in 2009 versus $59.36 last week.

Total Net Income Growth

Excluding the 51 Financial firms that have reported, total net income is down 28.4% from a year ago and 15.8% lower than in the fourth quarter.

Aside from the Financials, only the Utility sector is showing any significant gain in total net income at 6.1%. Health Care squeezes into the plus column, but by less than 0.1%.

On the other hand, Health Care is doing even better than any of those sectors with a ratio of 4.8:1.

Total Net Income Growth (Reported)
Sector	Q3 '08 A	Q4 '08 A	Q1 '09 A	Q2 '09 E	2007 A	2008 A	2009 E	2010 E
Financials	-63.48%	-1009.83%	23.50%	-59.48%	-21.69%	-79.68%	36.68%	103.44%
Utilities	-2.87%	5.12%	6.07%	-8.67%	16.82%	5.07%	-2.97%	4.70%
Health Care	6.83%	8.07%	0.07%	-3.68%	20.70%	11.72%	-2.52%	9.94%
Cons. Stap.	7.56%	3.14%	-9.16%	11.16%	1.58%	7.41%	-1.39%	9.07%
Telecom	-7.37%	-8.95%	-19.08%	-23.92%	28.26%	3.63%	-18.67%	6.75%
Technology	10.90%	-24.61%	-30.25%	-30.48%	15.80%	17.49%	-21.34%	22.57%
Industrials	-1.21%	-21.06%	-37.40%	-39.71%	13.16%	-1.06%	-30.16%	7.96%
Cons. Disc.	-26.83%	-69.54%	-54.72%	-40.11%	14.91%	-20.85%	-19.93%	54.87%
Energy	42.37%	-23.50%	-55.94%	-65.34%	7.09%	17.85%	-57.69%	28.41%
Materials	12.76%	-62.68%	-71.37%	-67.61%	17.73%	-0.58%	-59.53%	71.85%
S&P	-9.88%	-37.32%	-21.86%	-34.24%	3.26%	-13.86%	-19.32%	25.02%

Total Net Income (Reported)
Sector	Q1 '09	Q1 '08	Q4 '08	Q4 '07
Health Care	$22,925	$22,909	$22,981	$21,265
Financials	$17,910	$14,502	-$18,707	$2,056
Technology	$12,253	$17,568	$16,670	$22,112
Industrials	$11,435	$18,265	$17,114	$21,682
Cons. Stap.	$7,609	$8,377	$8,161	$7,912
Telecom	$5,196	$6,421	$5,812	$6,383
Energy	$4,891	$11,102	$8,555	$11,184
Cons. Disc.	$3,110	$6,869	$2,199	$7,221
Materials	$1,804	$6,303	$1,515	$4,059
Utilities	$1,771	$1,579	$1,529	$1,382
S&P	$89,509	$114,555	$66,296	$105,771

Total Net Income Growth (Not Reported)
Sector	Q3 '08 A	Q4 '08 A	Q1 '09 E	Q2 '09 E	2007 A	2008 A	2009 E	2010 E
Financials	-151.23%	-984.75%	99.65%	0.00%	-7.52%	-178.28%	-168.36%	16.52%
Health Care	8.99%	12.11%	6.54%	-1.32%	13.02%	11.74%	1.59%	11.70%
Cons. Stap.	18.37%	0.42%	-10.18%	2.26%	12.35%	22.01%	-2.43%	9.15%
Utilities	-7.07%	-3.38%	-22.21%	45.79%	8.08%	1.87%	-1.22%	11.11%
Industrials	-44.09%	-139.32%	-22.24%	-3.23%	1.06%	-49.90%	51.98%	22.91%
Technology	-0.06%	-4.88%	-32.77%	-30.02%	2.65%	23.22%	-21.34%	15.37%
Telecom	-65.78%	-62.29%	-49.75%	-60.97%	-18.84%	-51.43%	-49.68%	-1.86%
Energy	65.24%	-27.36%	-58.60%	-60.69%	9.36%	23.71%	-57.03%	39.83%
Materials	-27.00%	-130.01%	-86.25%	-70.27%	-8.61%	-40.01%	-71.73%	138.51%
Cons. Disc.	-60.83%	-199.49%	-90.82%	23.97%	-7.02%	-85.61%	10.35%	323.15%
S&P	-14.64%	-101.11%	-36.29%	-27.66%	3.09%	-28.17%	-5.25%	27.44%

Total Net Income Growth (Combined)
Sector	Q3 '08 A	Q4 '08 A	Q1 '09 E	Q2 '09 E	2007 A	2008 A	2009 E	2010 E
Financials	-90.09%	-992.86%	37.29%	-43.79%	-18.19%	-107.22%	-584.48%	66.28%
Health Care	7.07%	8.51%	0.78%	-3.41%	19.79%	11.72%	-2.06%	10.14%
Cons. Stap.	13.38%	1.54%	-9.76%	5.99%	7.20%	15.39%	-1.99%	9.11%
Utilities	-5.72%	-0.63%	-13.70%	26.67%	10.76%	2.91%	-1.80%	9.02%
Telecom	-15.97%	-16.59%	-21.62%	-27.13%	18.24%	-4.42%	-20.97%	6.34%
Technology	7.46%	-18.88%	-31.08%	-30.34%	11.41%	19.25%	-21.34%	20.29%
Industrials	0.64%	-19.77%	-34.40%	-38.54%	13.93%	0.94%	-29.55%	6.87%
Energy	57.26%	-26.09%	-57.74%	-62.31%	8.57%	21.71%	-57.25%	36.08%
Cons. Disc.	-42.26%	-137.34%	-73.96%	-24.25%	1.73%	-56.40%	-14.44%	117.57%
Materials	2.20%	-81.98%	-74.33%	-68.06%	10.21%	-9.91%	-61.45%	79.56%
S&P	-11.56%	-62.00%	-27.20%	-31.94%	3.20%	-18.94%	-14.89%	25.87%

Scorecard and Median EPS Growth Rates

Surprise ratio at 2.30, median surprise 4.76% with 289 firms reporting
Median EPS decline reported so far is 18.1%
A 12.0% decline is seen in the first quarter for those yet to report
Positive surprises concentrated in the Discretionary, Health Care and Tech Sectors
Every sector but Telecom and Health Care is down so far among the reported firms
Among yet to report, Utilities, Health Care barely positive, the rest negative

This quarter's ratio is actually slightly below what we were accustomed to seeing in recent years. Still, better more positive surprises than more disappointments.

In 4 sectors, Industrials, Tech, Financials and Materials more than half the firms have seen EPS decline by a third or more.

First-Quarter Scorecard (Reported)
Sector	1Q '09 (A)	2Q '09 (A)	2008 (A)	2009 (E)	2010 (E)	% Reported	Median % Surprise	# Pos Surprise	# Neg Surprise	# Match
Telecom	21.64%	-15.88%	4.54%	-9.68%	6.68%	44.44%	6.39%	3	1	0
Healthcare	7.13%	2.40%	14.40%	5.28%	11.35%	70.37%	4.20%	29	6	3
Cons. Stap.	-2.99%	-5.88%	4.96%	0.00%	7.62%	41.46%	0.00%	8	5	4
Utilities	-5.32%	-7.80%	7.83%	-3.14%	7.07%	23.53%	4.83%	6	2	0
Cons. Disc.	-18.70%	-22.91%	-5.37%	-16.56%	10.43%	55.70%	14.23%	34	8	2
Energy	-26.42%	-48.70%	21.40%	-42.56%	-2.92%	48.72%	4.35%	14	4	1
Industrial	-33.85%	-23.91%	12.87%	-18.14%	10.89%	76.27%	2.44%	27	15	3
Tech	-40.18%	-39.41%	13.56%	-31.65%	10.90%	56.00%	8.60%	26	8	8
Financial	-40.78%	-48.15%	-21.79%	-28.95%	7.22%	62.96%	-2.08%	23	27	1
Materials	-53.79%	-39.71%	3.14%	-36.51%	12.97%	72.41%	6.94%	14	4	3
S&P 500	-18.10%	-20.93%	6.90%	-14.52%	9.71%	57.80%	4.76%	184	80	25

First-Quarter EPS Growth (Not Reported)
Sector	1Q '09 (E)	2Q '09 (E)	2008 (A)	2009 (E)	2010 (E)
Utilities	3.13%	4.26%	9.28%	1.40%	7.30%
Healthcare	1.24%	9.21%	13.39%	9.45%	10.66%
Cons. Stap.	-0.91%	4.81%	13.33%	11.11%	9.67%
Financial	-9.04%	-1.75%	11.79%	-5.39%	11.28%
Tech	-11.11%	-1.85%	16.98%	19.10%	12.58%
Telecom	-11.76%	5.70%	-14.78%	3.03%	-5.49%
Industrial	-23.91%	-24.49%	17.76%	13.78%	3.45%
Cons. Disc.	-26.67%	-23.44%	7.14%	-13.93%	13.43%
Energy	-56.42%	-70.27%	11.15%	22.02%	27.76%
Materials	-73.08%	-63.64%	-1.25%	-39.86%	18.88%
S&P 500	-12.03%	-5.45%	11.42%	5.78%	10.87%

The Zacks Revisions Ratio: 2009

Revisions ratio for full S&P 500 is up to 0.65, from 0.51 last week
Two months ago the ratio was 0.26; the improvement has been steady and strong
Five sectors above "one"; 4 are in positive territory
Although still in negative territory, the revisions ratio has risen significantly
Telecom and Tech lead the pack, both Consumer sectors are also strong
Energy and Financials still seeing more than 3 cuts for every increase.
Ratio of firms with rising to falling mean estimates rises to 0.51 from 0.40
Total number of revisions (4-week total) up to 3,161 from 2,386 last week (32.5%)
Increases up to 1,246 from 805 (54.8%); cuts up to 1,915 from 1,581 (21.1%)

The revisions ratio improved sharply, but remains in negative territory. (Generally we consider anything below 0.80 to be negative, and anything above 1.25 to be positive.)

Sector	Avg. 4wk EPS Change (FY1)	Revisions Ratio	Firms With FY1 EPS Increase	Firms With FY1 EPS Decrease
Telecom	0.05%	1.90	5	4
Technology	2.35%	1.68	29	38
Consumer Staple	-0.05%	1.22	14	23
Consumer Disc	-2.61%	1.22	36	40
Health Care	-0.07%	1.09	29	23
Materials	-8.06%	0.57	8	18
Utilities	-0.82%	0.39	10	22
Industrials	-8.02%	0.34	9	44
Financial Services	-6.27%	0.29	19	59
Energy	-12.52%	0.21	0	39
S&P 500	-3.37%	0.65	159	310

The Zacks Revisions Ratio: 2010

The Overall picture for 2010 is similar to that of 2009
Revisions ratio up to 0.59 from 0.46
Positive surprises are leading to more upward revisions
Ratio of rising to falling mean estimates rises to 0.50 from 0.47
Tech and Staples the strongest; Energy and Utilities the weakest for 2010
Total revisions activity should peak in a few weeks
Total number of revisions rises to 2,355 from 1,757 (34.0%)
Estimate increases rises to 577 from 480 (20.2%); cuts rise to 1,200 from 1,142 (5.1%)
Energy, Utilities and Financials slammed

The 2010 revisions ratio story is pretty much the same as 2009. A low but improving revisions ratio. Just a month ago the 2010 revisions ratio was at 0.27, now it is at 0.59.

Sector	Avg. 4wk EPS Change (FY2)	Revisions Ratio	Firms With FY2 EPS Increase	Firms With FY2 EPS Decrease
Technology	1.40%	1.65	34	33
Consumer Staples	-0.05%	1.52	22	15
Consumer Discr	0.81%	1.18	37	37
Telecom	-0.72%	0.76	4	5
Health Care	-0.41%	0.63	19	34
Materials	-7.96%	0.48	7	20
Industrials	-6.44%	0.29	4	49
Financial Services	-9.73%	0.27	17	60
Utilities	-1.39%	0.25	9	21
Energy	-10.85%	0.25	2	37
S&P 500	-3.34%	0.59	155	311

Earnings Shares and P/Es

P/Es are too low since earnings estimates are too high
Health Care expected to take earnings crown from Energy in 2009 and keep it in 2010
Energy's earnings share expected to plunge to 11.9% from 23.7%
Financials' 2009 earnings share expected to rise to 10.7% from -1.7% in 2008.
Consumer Discretionary's market cap share far above earnings shares (overvalued?)
Health Care's market cap is share well below earnings shares (undervalued?)
12-month forward S&P P/E of 13.87 equates to earnings yield of 7.21%, which is very attractive relative to 10-year T-note yield of 3.16%, but only mediocre relative to 5.43% A-rated 10-year corporate.
T-note rates are rising and more realistic earnings yields of near 5.72% based on lower earnings ($50) means the spread, while still attractive, is not overwhelming.

Earnings Shares and P/Es
Sector	2008%	2009%	2010%	Market Cap %	P/E 2008	P/E 2009	P/E 2010
Technology	17.06%	15.90%	15.20%	18.81%	14.2	17.9	14.9
Health Care	16.74%	19.29%	16.88%	13.44%	10.3	10.5	9.6
Cons Staple	13.21%	15.23%	13.20%	13.17%	12.8	13.1	12.0
Energy	23.65%	11.89%	12.86%	12.33%	6.7	15.7	11.5
Financials	-1.73%	10.78%	14.24%	11.88%	NM	16.7	10.0
Industrials	13.98%	11.58%	9.84%	10.17%	9.4	13.3	12.4
Cons Disc.	4.17%	4.19%	7.25%	9.68%	29.8	34.9	16.0
Utilities	4.50%	5.32%	4.61%	3.81%	10.9	10.8	9.9
Telecom	4.53%	4.05%	3.42%	3.56%	10.1	13.3	12.5
Materials	3.88%	1.76%	2.51%	3.15%	10.5	27.1	15.1
S&P 500	100.00%	100.00%	100.00%	100.00%	12.9	15.1	12.0

Neil Malkin contributed significantly to this report.

Data in this report, unless stated otherwise, is through the close on Thursday 4/30/2009

Zacks Investment Research

Stock Market News for April 7, 2009 – Market News

Zacks Market Commentaries — Tue, 07 Apr 2009 14:16:12 +0000

U.S. markets closed modestly lower Monday paring losses recorded earlier in the day amid banking worries and investor concerns that gloomy earnings and outlook will hurt technology, commodities and industrial shares. The KBW Banking index slipped 3.8% after a prominent banking analyst advised selling banking stocks. Calyon Securities analyst Mike Mayo in a report titled "Seven Deadly Sins of Banking" warned bank losses could exceed levels seen during the Great Depression. Stocks advanced in the late afternoon session paring some losses but the rally was checked after reports emerged that talks for IBM Corp.'s (NYSE: IBM) $7 billion deal to buy Sun Microsystems (NASDAQ: JAVA) had hit a roadblock. Sun Microsystems (NASDAQ: JAVA) shares plunged 23%.

Mayo started coverage on several banking stocks with an "underperform" or "sell" rating. Among securities initiated with a sell rating were: BB&T Corp (NYSE:BBT), Fifth Third Bancorp (NASDAQ:FITB), KeyCorp (NYSE:KEY), SunTrust Banks (NYSE:STI) and US Bancorp (NYSE:USB). Underperform ratings were assigned to Bank of America (NYSE:BAC), Citigroup (NYSE:C), Comerica (NYSE:CMA), JP Morgan (NYSE:JPM), PNC Financial Services Group (NYSE:PNC), and Wells Fargo (NYSE:WFC).

Toward the end of the day, however, banking analyst Meredith Whitney supported the outlook for the banks, expecting a rise in share prices upon realization of the group's rising tangible book values, although still maintaining that the sector may not get "out of the woods" until mid-2010. This morning a London newspaper report cited an IMF projection likely to place banks' toxic debt level at as much as $4 trillion, up from its January estimates of $2.2 trillion.

Among declining banking stocks, JP Morgan Chase (NYSE: JPM) lost 3.7% to $28.20, Well Fargo (NYSE: WFC) dropped 6.7% to $15.25 and SunTrust Banks (NYSE: STI) fell 8.1% to $12.70. The Dow Jones Industrial Average slid 41.74 points, or 0.5%, to 7975.85. Tech-heavy Nasdaq declined 15.16 points or 0.93% at 1,606.71. The Standard & Poor's 500 Index .SPX lost 7.02 points, or 0.83 percent, to 835.48.

Investors preferred to remain on the sidelines on the eve of the earnings season which kicks off today with Alcoa's (NYSE:AA) expected post of a quarterly loss after the close. NYSE volume slowed to 1.3 billion shares, as declining issues outpaced advancing shares by more than two to one. The Vix volatility measure headed up from Friday's two-month lows, with a 3.1% jump to 40.93.

The Baltic Dry Index, widely interpreted as a measure of world trade, fell to its lowest point since February 4, down 1.3% on Monday, sending economically-sensitive oil and gas and basic material sector stocks down 2.2% and 1.7%, respectively. Rio Tinto (NYSE:RTP) announced plans to slow construction of an aluminum refinery and cut bauxite production citing dwindling demand. Deutsche Bank (NYSE:DB) slashed its projections for steel maker earnings, citing lower prices and demand.

Automakers remained in focus as Ford (NYSE:F) reported results of a tender offer which reduced the firm's debt by 28% from $25.8 billion at the end of 2008. The auto maker's shares topped the list of S&P performers Monday, rising 16%, upon its elimination of $9.9 billion in debts. Nevertheless, S&P dropped its credit ratings on the company. Moreover, a Barron's article noted the company likely to benefit from problems at General Motors (NYSE:GM) and Chrysler. General Motors (NYSE:GM) shares gained 8.1%, topping the list of gaining issues on the DJIA.

Goldman Sachs (NYSE:GS) removed Cisco Systems (NASDAQ:CSCO) from its "conviction buy" list, saying growth expectations were "largely priced in."

Today's expected reports include February's consumer credit figures (2:00 PM ET). Consumer credit is expected to show a contraction of $3.0 billion following its $1.8 billion increase in January. The SEC meets tomorrow at 9:00 PM ET to address the uptick rule. Among companies due to release quarterly results are: Alcoa (NYSE:AA), Bed Bath and Beyond (NASDAQ:BBBY), Chattem (NASDAQ:CHTT), and Mosaic (NYSE:MOS).

Zacks Investment Research

Stocks Pull Back On Profit Taking

Daniel Shepard — Wed, 25 Mar 2009 02:44:15 +0000

Tuesday March 24, 2009 Navivest DJIA 7660.21 -115.65 -1.49% Nasdaq 1516.52 -39.25 -2.52% S#38;P 500 806.25 -16.67 -2.03% One day after stocks put up an incredible rally on the U.S. Treasury’s plan to clean up the toxic assets weighing down the balance sheets of the nation’s banks, traders took profits, causing the stock market to give up [...]div id='wikinvestWireDiv664'!--Wikinvest API HTML Response-- !--metadata generated='Tue, 24 Mar 2009 20:10:51 -0700'-- div class='wikinvestWireContainer' wikinvestWirePageId='279649' wikinvestWirePartnerName='Navivest' span class='wikinvestWireHeader'More on this topic/span span class='wikinvestWireWhatsThis' a href='http://www.wikinvest.com/blogger/wikinvest_wire' target='_blank'(What#39;s this?)/a /span div class='wikinvestWireItemList' !--Wikinvest Wire Related Item--div class='wikinvestWireItem' style='line-height:1.3em; margin:0pt;' a target='_blank' class='wikinvestWireItemLink' wikinvestWirePageId='278303' href='http://zerohedge.blogspot.com/2009/03/is-jp-morgan-buying-private-jet-hangar.html' onclick='Wikinvest.Wire.BloggerTracker.trackUrlClick( 279649, 278303 );' Is JP Morgan Buying A Private Jet Hangar?/a span class='wikinvestWireItemMetadata' (Zero Hedge, 3/23/09) /span /div!--/Wikinvest Wire Related Item-- !--Wikinvest Wire Related Item--div class='wikinvestWireItem' style='line-height:1.3em; margin:0pt;' a target='_blank' class='wikinvestWireItemLink' wikinvestWirePageId='278278' href='http://zerohedge.blogspot.com/2009/03/karl-will-global-head-of-jp-morgan-tech.html' onclick='Wikinvest.Wire.BloggerTracker.trackUrlClick( 279649, 278278 );' Karl Will, Global Head of JP Morgan Tech Mamp;A Quits/a span class='wikinvestWireItemMetadata' (Zero Hedge, 3/23/09) /span /div!--/Wikinvest Wire Related Item-- !--Wikinvest Wire Related Item--div class='wikinvestWireItem' style='line-height:1.3em; margin:0pt;' a target='_blank' class='wikinvestWireItemLink' wikinvestWirePageId='279124' href='http://blog.ockhamresearch.com/index.php/2009/03/cramer-jp-morgan-help-extend-the-rally' onclick='Wikinvest.Wire.BloggerTracker.trackUrlClick( 279649, 279124 );' Cramer: JP Morgan Will Help Extend the Rally/a span class='wikinvestWireItemMetadata' (The Razor#039;s Edge, 3/24/09) /span /div!--/Wikinvest Wire Related Item-- /div span class='wikinvestWireFooter' Read more on a target='_blank' class='wikinvestWireWikinvestItemLink' wikinvestWirePageId='178' href='http://www.wikinvest.com/stock/J_P_Morgan_Chase_(JPM)' wikinvesttrackingurl='http://www.wikinvest.com/stock/J_P_Morgan_Chase_(JPM)' onclick='Wikinvest.Wire.BloggerTracker.trackUrlClick( 279649, 178 );'J P Morgan Chase/a at a href='http://www.wikinvest.com' target='_blank'Wikinvest/a /span /div !--/Wikinvest API HTML Response--/div

Aspire Misery Index for the Week Ended January 30, 2009 (updated Friday a.m. Jan. 30)

Small Cap Pulse — Fri, 30 Jan 2009 22:57:00 +0000

Aspire Misery Index for the Week Ended, January 30, 2009 Another week chalked with downbeat earnings performance, profit warnings, and further indications of economic erosion here in the U.S., and abroad is almost behind us, and now we can start focusing on the Super Bowl. Here is a list of bullets to consider when setting expectations for stock, portfolio and indices performance (not 100% comprehensive but a pretty good gauge of this weekrsquo;s lowlights in the U.S. economy): GDP ndash; The U.S. economy contracted by 3.8% in the Q4, the most since 1982. The good news is that economists were expecting the number to come in at 5.4%. For 2008, GDP growth was 1.8%. Consumer Spending ndash; dropped by 3.5% last quarter following a 3.8% in the prior quarter. Durable Goods ndash; durable goods orders fell for the fifth straight month in December by 2.6%. Economists had expected a 2% decline. Orders fell 5.7% for the year, the second biggest decline on record. Retail Industry ndash; The National Retail Federation released a forecast for retailers in 2009 to record a 0.5% drop in revenue. Sales for the first half of 2009 are expected to decline by 2.5%, then a 1.1% decline in Q3 and a 3.6% increase in Q4. Auto Industry ndash; The National Association of Auto Dealers expects sales of at least 12.7 million vehicles in the U.S. this year. Mitsubishi extended the downtime at its Illinois factory for an extra five weeks. A irline Industry ndash; The International Air Transport Association said the industry lost $5 billion in 2008 on lower traffic.nbsp;nbsp; Mobile Phone Industry - Global mobile phone market will shrink 9% in 2009, its first decline since 2001 and with the first half set to be especially grim, Strategy Analytics said. Job Cuts ndash; Caterpillar (20,000 jobs), Sprint Nextel (8,000 jobs), Deere (700 jobs), Home Depot (7,000 jobs), GM (2,000 jobs), Wyeth (8,000 jobs ndash; on consolidation from Pfizer purchase), Brooks Automation (350 jobs, or 20% of workforce), Corning (3,500 jobs), Quiksilver (200 jobs), Weyerhauser (221 jobs), STM Microelectronics (4,500 jobs), IBM (estimated 4,000 jobs), Target (1,000 headquarters jobs),nbsp; Volvo (laying off 650 at Virginia plant), JL French Automotive Castings (300 jobs), Starbucks (7,000 more jobs), Citrix (about 462 jobs), Boeing (10,000 jobs), Jabil Circuit (3,000 jobs), AOL (700 jobs), nbsp;Wet Seal (41 jobs), Readerrsquo;s Digest (about 280 jobs), Revel (lays off 400), Pacific Sunwear (57 jobs), Analogic (140 jobs), Kodak (3,500 to 4,500 jobs), Black amp; Decker (1,200 jobs), Teradyne (14% of workforce), Bon-Ton (1,150 jobs), Cessna (2,000 jobs), AstraZeneca (another 6,000 jobs), New Jersey hospital system (cutting 180 jobs), Caterpillar (added 2,100 more jobs to its already announced 20,000 jobs), Unemployment ndash; The Conference Board said unemployment could rise to 9%. Nevadarsquo;s jobless rate reached 9.1% in December. Unemployment in Kansas rose to 4.9% in December from 4% the year prior. Coloradorsquo;s unemployment rate in December hit 6.1%. South Carolinarsquo;s unemployment rate rose to 9.5%. Indianarsquo;s unemployment rate rose to 8.2% in December. Arkansasrsquo; unemployment rate rose to 6.2% in December. Mainersquo;s unemployment rate rose to 7% in December. Montanarsquo;s unemployment rate rose to 5.4% in December. West Virginiarsquo;s jobless rate is expected to increase to between 8.7% and 9.5% by the last quarter of 2009. The Labor Department reported that weekly jobless claims rose to 588,000 while the continuing claims rose to an all-time high of almost 4.8 million. Nebraska unemployment rose to 4% in December. nbsp; Profit Warnings ndash; Caterpillar, Applied Industrial Tech, Eaton, Max Capital Group, Moog, McGraw Hill, Quanex, Lexmark, Jacobs Engineering, U.S. Steel, AK Steel, Yahoo, Total Systems, Rayonier, ATamp;T, McCormick, Tyco, Norsk Hyrdo, Cirrus Logic, Baker Hughes, Canon, Qualcomm, Textron, Oshkosh, NEC, Honda, Hitachi, Credit Ratings ndash; Fitch lowered Johnson Control ratings, Moodyrsquo;s downgraded Sealy, Samp;P cut Ryder System, Samp;P and Moodyrsquo;s cut Blythrsquo;s ratings, Samp;P cut rates on PPL Corp and PPL Electric, Samp;P cut ratings on SunTrust Banks, Samp;P cuts Hexion, Moodyrsquo;s cuts Intrsquo;l Game Technology, Samp;P cut Golden Nugget, Chapter 11 ndash; Hartmarx (Obamarsquo;s suit maker), Smurfit-Stone, Closing the Doors ndash; Weyerhauser is closing two mills in southwestern Washington, Starbucks is closing 300 stores, Venture Capital ndash; Investments in Q4 fell by 33% Y/Y to $5.4 billion.nbsp; Investment into biotech and medical device companies fell 31% Y/Y to $1.6 billion. Investment into software companies fell by 28% Y/Y to $1 billion. The only sector bucking the trend was alternative energy and clean tech, which raised $908.2 million in the Q4, up 26% over the same period last year. For the full year, VC invested $28.3 billion, down 8% Y/Y. State Budgets ndash; Nevadarsquo;s unemployment rate rose to 9.1% in December; Home Sales ndash; Existing home sales rose 6.5% in December while the median home sales price fell 15.3% Y/Y to $175,400. For 2008, homes sales were down 13% TO 4.9 million homes, the lowest level since 1997. The National Association of Realtors said southern existing home sales fell almost 7% in December on a Y/Y basis, while the median sales price fell 8% to $158,600; existing home sales in the Midwest fell almost 5% in December on a Y/Y basis and the media sale price declined to $140,800. The Commerce Department reported new homes fell 14.7% in December to the slowest pace since 1963. The median price of new homes sold in December was $206,500, a decline of 9.3% Y/Y. Home Prices - Samp;P Case/Shiller index reported that home prices in 20 U.S. cities declined by 18.2% in November on a Y/Y basis. Ken Rose, UC Berkeley Economist projected home prices to slide 6% in 2009. Leading Indicators ndash; The Conference Boardrsquo;s monthly forecast of economic activity increased 0.3% in December. Stock Dividends ndash; the AP reported that dividends are being cut at the fastest pace in at least 50 years. Colleges ndash; universities are cutting budgets, and college endowments are down 3% in the fiscal year ending June 30, 2008, and in the first five months of FY2009, endowments are down 23% (source: TIAA-CREF and NACUBO). Tourism ndash; The U.N. World Tourism Organization said global tourism could decline by up to 2% in 2009. Hawaiirsquo;s tourism industry saw a 16.5% decline in December, and 10.8% for the year. pa href="http://feeds.feedburner.com/~a/smallcappulse/feed?a=13Fjnk"img src="http://feeds.feedburner.com/~a/smallcappulse/feed?i=13Fjnk" border="0"/img/a/p

Business Week’s Gene Marcial Recommends Regional Banks

CEO Blogger — Tue, 23 Sep 2008 17:05:51 +0000

http://trackthepros.com/stocks/category/404 a. Although PNC and BB&T have moved up considerably, they are still better positioned to power ahead and outpace their peers; PNC’s low exposure to collateralized debt obligations (CDOs) and structured investment vehicles. That, on top of PNC’s relatively good capital levels and low debt ratio of 6.8, helped PNC’s strong [...]

Maverick Capital Management 13F | Lee Ainslie Hedge Fund Holdings Analysis

Richard C. Wilson — Mon, 22 Sep 2008 12:41:00 +0000

Maverick Capital

Maverick Capital Management Holdings Analysis

This post is being written as part of HedgeFundBlogger.com's Investment Securities Tool which analyzes the holdings of hedge fund managers.

Lee Ainslie started Maverick Capital back in 1993 with $38 million. Nowadays, the fund is worth $10 billion. Ainslie, like many of the other fund managers I've profiled, has a background rooted in learning from legendary great Julian Robertson at Tiger Management. So, due to the fact that these proteges learned from the best and have had great success running their own hedge funds, I continually try to find a reason not to follow these funds. And, needless to say I'm never successful. Some contacts over at Maverick have explained that their hedge fund strategy is straight up stock picking, both long and short. They made it clear though, that they do not employ pairs trades. Although, some of their long/short setups might be in the same sector. They try to hedge their positions like a true hedge fund by picking out the shining stars in certain sectors, as well as identifying the pieces of garbage. Now, of course, this presents us with a problem in that the 13F filings only show long positions (unless they're holding puts on a name, we can see those). So, a good amount of Maverick's portfolio (the entire short side) is unbeknownst to us, because they have reported zero put positions. But, let's look on the bright side in that we can see all their long positions. Maverick uses a value approach (obviously learned from Julian) and one of their most popular metrics is finding companies and comparing their enterprise value to sustainable free cash flow.

So, now that we've got a little background on Maverick, let's see what they were up to. The following are Maverick Capital's current holdings as of June 30th 2008, as released in their most recent 13F filing with the SEC. The positions in this most recent 13F were compared to last quarter's 13F and here are the changes made to their portfolio:

New Positions:
First Solar (FSLR): 1,202,118 shares. This position is 2.93% of Maverick's portfolio.
Lorillard (LO): 3,820,856 shares. This position is 2.36% of Maverick's portfolio.
CVS Caremark (CVS): 5,912,073 shares. This position is 2.09% of Maverick's portfolio.
Netapp (NTAP): 9,331,862 shares. This position is 1.81% of Maverick's portfolio.
ITT Educational Services (ESI): 2,422,090 shares. This position is 1.79% of Maverick's portfolio.
Macy's (M): 9,008,174 shares. This position is 1.56% of Maverick's portfolio.
Hansen Natural (HANS): 5,712,952 shares. This position is 1.47% of Maverick's portfolio.
Polo Ralph Lauren (RL): 2,431,244 shares. This position is 1.36% of Maverick's portfolio.
Dicks Sporting Goods (DKS): 7,589,473 shares. This position is 1.20% of Maverick's portfolio.
Cigna Corp (CI): 2,931,045 shares. This position is 0.93% of Maverick's portfolio.
Digital River Inc (DRIV): 1,974,144 shares. This position is 0.68% of Maverick's portfolio.
Viacom Inc (VIA): 2,442,500 shares. This position is 0.67% of Maverick's portfolio.
Forest Labs (FRX): 1,789,900 shares. This position is 0.56% of Maverick's portfolio.
Lamar Advertising (LAMR): 1,542,918 shares. This position is 0.50% of Maverick's portfolio.
Visa (V): 565,005 shares. This position is 0.41% of Maverick's portfolio.
South Financial Group (TSFG): 50,000 shares. This position is 0.38% of Maverick's portfolio.
Athena Health (ATHN): 1,245,819 shares. This position is 0.34% of Maverick's portfolio.
National City Corp (NCC): 6,625,176 shares. This position is 0.28% of Maverick's portfolio.
Sohu.com Inc (SOHU): 170,485 shares. This position is 0.11% of Maverick's portfolio.
MSCI Inc (MXB): 287,186 shares. This position is 0.09% of Maverick's portfolio.
Universal American (UAM): 1,004,391 shares. This position is 0.09% of Maverick's portfolio.
Comscore (SCOR): 436,640 shares. This position is 0.09% of Maverick's portfolio.
Citizens Republic Bancorp (CRBC): 937,500 shares. This position is 0.02% of Maverick's portfolio.

Added to:
Berkshire Hathaway (BRK.B): Increased position by 1412%. Position is now 0.45% of their portfolio.
Gmarket (GMKT): Increased position by 317%. Position is now 0.19% of their portfolio.
Infinera (INFN): Increased position by 171%. Position is now 0.54% of their portfolio.
American Capital (ACAS): Increased position by 141%. Position is now 0.30% of their portfolio.
Nordstrom (JWN): Increased position by 136.61%. Position is now 2.79% of their portfolio.
America Movil (AMX): Increased position by 129.88%. Position is now 3.91% of their portfolio.
Lexmark (LXK): Increased position by 109.39%. Position is now 1.42% of their portfolio.
Citrix (CTXS): Increased position by 109.36%. Position is now 2.20% of their portfolio.
Bank of New York Mellon (BK): Increased position by 55.42%. Position is now 3.15% of their portfolio.
Baxter Intl (BAX): Increased position by 51.69%. Position is now 2.90% of their portfolio.
Advanced Micro Devices (AMD): Increased position by 45.89%. Position is now 2.87% of their portfolio.
Raytheon (RTN): Increased position by 41.72%. Position is now 2.58% of their portfolio.
Fidelity National Info (FIS): Increased position by 40.56%. Position is now 2.05% of their portfolio.
Covidien (COV): Increased position by 32.99%. Position is now 2.32% of their portfolio.
Liberty Media Corp (LMDIA): Increased position by 28.09%. Position is now 1.59% of their portfolio.
Resmed (RMD): Increased position by 26.46%. Position is now 0.74% of their portfolio.
Burlington Northern (BNI): Increased position by 22.73%. Position is now 1.83% of their portfolio.
Google (GOOG): Increased position by 22.27%. Position is now 1.72% of their portfolio.
Genentech (DNA): Increased position by 21.38%. Position is now 1.40% of their portfolio.
Zimmer Holdings (ZMH): Increased position by 20.28%. Position is now 1.73% of their portfolio.
Cypress Bioscience (CYPB): Increased position by 19.98%. Position is now 0.20% of their portfolio.
Apple (AAPL): Increased position by 19.45%. Position is now 4.09% of their portfolio.
Research in Motion (RIMM): Increased position by 15.41%. Position is now 4.08% of their portfolio.
MetroPCS Comm (PCS): Increased position by 13.6%. Position is now 0.77% of their portfolio.
Home Inns & Hotels (HMIN): Increased position by 7.72%. Position is now 0.54% of their portfolio.
Gilead Sciences (GILD): Increased position by 6.66%. Position is now 2.37% of their portfolio.
Marvell Technology (MRVL): Increased position by 5.24%. Position is now 3.08% of their portfolio.
Newstar Financial (NEWS): Increased position by 5.21%. Position is now 0.14% of their portfolio.
Cardinal Health (CAH): Increased position by 3.33%. Position is now 1.56% of their portfolio.
Amylin Pharma (AMLN): Increased position by 2.84%. Position is now 0.58% of their portfolio.
Discovery Holding (DISCA): Increased position by 1.74%. Position is now 1.21% of their portfolio.
Palm (PALM): Increased position by 1.40%. Position is now 0.51% of their portfolio.
Lumber Liquidators (LL): Increased position by 1.14%. Position is now 0.26% of their portfolio.
China Nepstar (NPD): Increased position by 0.75%. Position is now 0.18% of their portfolio.
First Advantage (FADV): Increased position by 0.65%. Position is now 0.15% of their portfolio.
Under Armour (UA): Increased position by 0.17%. Position is now 0.83% of their portfolio.
Mylan Inc (MYL): Increased position by 0.06%. Position is now 1.09% of their portfolio.
Monsanto (MON): Increased position by 0.04%. Position is now 1.68% of their portfolio.
Potash (POT): Increased position by 0.03%. Position is now 2% of their portfolio.

Reduced positions:
Thermo Fisher (TMO): Reduced their position by 4.91%. Position is now 1.68% of their portfolio.
Western Union (WU): Reduced their position by 10.2%. Position is now 2.08% of their portfolio.
Marsh & Mclennan (MMC): Reduced their position by 12%. Position is now 1.55% of their portfolio.
Textron Inc (TXT): Reduced their position by 18.93%. Position is now 1.44% of their portfolio.
Wyeth (WYE): Reduced their position by 20.6%. Position is now 1.46% of their portfolio.
Leap Wireless (LEAP): Reduced their position by 23.40%. Position is now 0.39% of their portfolio.
Trubion Pharma (TRBN): Reduced their position by 24.38%. Position is now 0.04% of their portfolio.
Dish Network (DISH): Reduced their position by 27.75%. Position is now 1.13% of their portfolio.
Avon Products (AVP): Reduced their position by 33.23%. Position is now 1.36% of their portfolio.
JP Morgan Chase (JPM): Reduced their position by 38.68%. Position is now 0.89% of their portfolio.
Cognizant (CTSH): Reduced their position by 42.97%. Position is now 0.85% of their portfolio.
DirecTV (DTV): Reduced their position by 49.69%. Position is now 0.83% of their portfolio.
Suntrust Banks (STI): Reduced their position by 50%. Position is now 0.16% of their portfolio.
Gamestop (GME): Reduced their position by 51.64%. Position is now 0.81% of their portfolio.
Corcept (CORT): Reduced their position by 57.49%. Position is now 0.01% of their portfolio.
Bluefly (BFLY): Reduced their position by 90%. Position is now 0.11% of their portfolio.
Berkshire Hathaway (BRK.A): Reduced their position by 95%. Position is now 0.66% of their portfolio.

Removed Positions (Positions Maverick sold out of completely):
Hanesbrands (HBI)
Autozone (AZO)
Bankrate (RATE)
CNET (CNET)
Crocs (CROX)
Cumulus Media (CMLS)
Harmonic (HLIT)
Loews (L)
Move Inc (MOVE)
Nucor (NUE)
OfficeMax (OMX)
Qualcomm (QCOM)
Salesforce (CRM)
Sandisk (SNDK)
Sears (SHLD)
Starbucks (SBUX)
UnitedHealth (UNH)

Positions with no change:
VMWare (VMW). Position is 0.59% of their portfolio.
BPW Acquisition (BPW). Position is 0.18% of their portfolio.
FIrst Marblehead (FMD). Position is 0.05% of their portfolio.
Ultra Clean Holdings (UCTT). Position is 0.01% of their portfolio.
Vivus (VVUS). Position is 0.01% of their portfolio.

Top 20 holdings by % of portfolio:
1. Apple (AAPL): 4.09% of the portfolio
2. Research in Motion (RIMM): 4.08% of the portfolio
3. America Movil (AMX): 3.91% of the portfolio
4. Bank of New York Mellon (BK): 3.15% of the portfolio
5. Marvell Tech (MRVL): 3.08% of the portfolio
6. First Solar (FSLR): 2.93% of the portfolio
7. Baxter Intl (BAX): 2.90% of the portfolio
8. Advanced Micro (AMD): 2.87% of the portfolio
9. Nordstrom (JWN): 2.79% of the portfolio
10. Raytheon (RTN): 2.58% of the portfolio
11. Gilead (GILD): 2.37% of the portfolio
12. Lorillard (LO): 2.36% of the portfolio
13. Covidien (COV): 2.32% of the portfolio
14. Citrix (CTXS): 2.20% of the portfolio
15. CVS Caremark (CVS): 2.09% of the portfolio
16. Western Union (WU): 2.08% of the portfolio
17. Fidelity National Info (FIS): 2.05% of the portfolio
18. Potash (POT): 2.00% of the portfolio
19. Burlington Northern (BNI): 1.83% of the portfolio
20. Netapp (NTAP): 1.81% of the portfolio

----------------------------------------------------

Breakdown: Maverick changed up their portfolio a decent amount over the past quarter. Most notable are their changes within their top 10 holdings. Hedge fund favorite Qualcomm (QCOM) was Maverick's 3rd largest holding last filing. This filing, they no longer even hold a position. Additionally, they were selling off chunks of other top 10 holdings from last quarter. They sold off 33% of their position in Avon Products (AVP), which was their 4th largest holding just one quarter ago. They also sold over 51% of their Gamestop (GME) position, which last quarter was their 7th largest holding. With those positions vacating their place in the top 10 holdings of Maverick's portfolio, new holdings obviously took their place. America Movil (AMX), another hedge fund favorite, was Maverick's 9th largest holding last time. This time, they increased their position by 129% and it is now their 3rd largest holding. They obviously used the weakness in this name to add to their position, just like fellow 'Tiger Cub' fund Lone Pine Capital. Maverick also added heavily to Nordstrom (JWN), increasing their position by 136% and making it now their 9th largest holding.

Maverick was out adding to tech across the board. Apple (AAPL) and Research in Motion (RIMM) are their top 2 largest holdings respectively, as they boosted their positions in both by over 14% each. Additionally, they added to their Marvell (MRVL) position, bringing it up to the fund's 5th largest position now. Maverick also continues to build a position in Advanced Micro Devices (AMD), as it now is their 8th largest holding.

Among their new positions this quarter are First Solar (FSLR), Lorillard (LO), and CVS Caremark (CVS). I highlight these three in particular because Maverick started large, new positions in all three names. First Solar (FSLR) was brought up all the way to the fund's 6th largest holding after not even owning shares last quarter. They started a new position in CVS Caremark (CVS) and brought it up to the fund's 15th largest holding. Also, they added heavily to Lorillard (LO) as well, making this new position their 12th largest holding. This position is interesting because we also saw Lone Pine Capital (ran by Stephen Mandel Jr.) start a new position in this exact same name. And, actually, this is not the only position that both Maverick and Lone Pine both started together. In this 13F filing, we see that Maverick started a position in Hansen Natural (HANS). And, Lone Pine recently disclosed that they have a 7.8% stake in HANS. It's definitely common to see many similar positions within the portfolios of various 'Tiger Cub' managers who now run their own funds because they all undoubtedly keep in touch and come from the same school of thought.

One last thing I would like to point out is Maverick selling completely out of various consumer related names. They sold completely out of their positions in Autozone (AZO), Hanesbrands (HBI), Sears (SHLD), Starbucks (SBUX), Crocs (CROX), and OfficeMax (OMX).

You can view their most recent 13F as filed with the SEC here.

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SunTrust Banks Inc. (STI)

Steve Patterson — Wed, 09 Jul 2008 17:35:00 +0000

After reaching a new 52 week low on Monday, SunTrust jumped 10% along with all financials on Tuesday but returned to its selling pattern on Wednesday falling 5%.

All about oil and the financials — and some thoughts on the “surprising” crisis in …

Mike Larson — Fri, 20 Jun 2008 14:45:55 +0000

The big story over the last couple of days continus to be oil. Yesterday, oil prices tanked by more than $5 after China raised the domestic price of refined products (gasoline, diesel, etc.). Why would that matter? The idea is that if more consumers have to pay the "real" price of energy (China, Malaysia, Venezuela, and other countries subsidize or cap the price of energy products for their citizens), energy use will fall and so will energy prices. Today, oil prices have come bouncing right back (+$3.50 or so as I write) amid reports that Israel is contemplating an attack on Iran's nuclear facilities. That kind of volatility really gets the market's blood pumping.

The other big news of the week? Many companies in the financial sector continues to plumb new depths. Almost every day, we hear about fresh losses, more capital raisings, and more regulatory trouble. The regional banks have been the latest firms to take their lumps, as covered in the New York Times yesterday. An excerpt:

"For the banks’ shareholders, the numbers tell a sad story: Wednesday’s decline brought the loss for the S.& P. bank index to 39.3 percent so far this year. Fifth Third’s odd name almost seems like a bad joke. Fifth Third has lost two-thirds of its value this year. Shares of two other banks based in Ohio, the National City Corporation, of Cleveland, and Huntington Bancshares, of Columbus, have suffered similar declines.

"Banks based in the Southeast are hurting, too. The Regions Financial Corporation, the biggest bank in Alabama, has lost half its value. Standard & Poor’s predicted this week that Regions would cut its dividend to conserve its capital in the face of rising losses on real estate loans. The share price of SunTrust Banks, which operates across the Southeast, has fallen almost 41 percent.

"Small and midsize lenders are in far less danger than they were during the 1980s and early 1990s, when about 1,600 federally insured institutions failed during a savings and loan crisis. But the breadth and depth of the current troubles have caught bank executives by surprise. Federal regulators are particularly concerned about the exposure of smaller banks to the commercial real estate market, which has softened in some parts of the country.

"But another worry is that raising money will become increasingly costly for banks that need capital. In a report issued this week, analysts at Goldman Sachs said banks might need as much as $65 billion on top of the $120 billion they have already raised."

I especially like the part about bank executives being caught by "surprise." How could so many of these guys NOT see this coming? How could they NOT realize the housing and mortgage markets were swept up in a gigantic bubble, one that would result in one of the worst downturns in decades ... and the biggest threat to the financial system since the S&L crisis? Plenty of observers, myself included, began warning about the dire risks of just such an outcome years ago, and turned up the "heat" on those warnings within the past 12 months.

Yet regulators and bankers continue to be surprised at virtually every step of the way. Remember it was only about a year ago that officials were giving speeches about how the problem was "contained" to subprime mortgages. I'll never forget this March 28, 2007 excerpt from Mr. Bernanke's testimony before Congress:

"Although the turmoil in the subprime mortgage market has created severe financial problems for many individuals and families, the implications of these developments for the housing market as a whole are less clear. The ongoing tightening of lending standards, although an appropriate market response, will reduce somewhat the effective demand for housing, and foreclosed properties will add to the inventories of unsold homes. At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency."

As for all those "bottom fishers/value destroyin ... er ... creating" funds that keep buying into every new bank/broker/insurance company sale of common and preferred shares, warrants, bonds, and so on? The Times sums it up this way:

"So far the vast majority of investors who bought into financial companies in the hope that the industry was out of the woods have lost, and lost big."