XLF below its Feb lows. Banks (1.81%), Financial services (1.57%), Insurance (0.97%). Interesting article on banks regarding the laxness of penalties the government is imposing on banks and the government's failure to file charges against bank executives. Reinsurers didn’t catch a bid after positive call heading into the Atlantic storm season. Mortgage insurers and multi-line insurance names lagged the sector. Visa bucked the trend as credit card debt dropped to lowest level in 8 years.
Big Banks
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BAC, C, WFC, JPM, GS, MS, FITB, STT, USB, HBAN, HCBK, PBCT, FHN, RF, BBT
Mid/SmallcapBanks/S&L
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FBP, WAL, EWBC, GSBC, HMPR, IBKC, PRWT, RBPAA, WBCO,NYB,DCOM,SBIB,CVBF,GAIN,LKFN,TFSL,IBCP,BRKL
Brokers
KCG, SCHW, AMTD, ETFCD
Asset Managers/Inv co’s
- BX, FIG, GLG, GROW, JNS, LAZ, MF, LM,KFN
Insurance
- GNW, HIG, MET, ALL, TRV
CreditCards
- AXP, COF, MA, V, DFS
Specialty Finance/Mort Insurers
- ACAS, ABK, MBI, MTG, RDN
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Credit Card Debt Drops to Lowest Level in 8 Years
from CNBC
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The average combined debt for bank-issued credit cards — those with a MasterCard or Visa logo — fell to $4,951 in the second quarter, down 13 percent from $5,719 last year, according to TransUnion.
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The credit reporting agency said it was the first time card debt fell below $5,000 since the first quarter of 2002.
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More borrowers also made payments on time. The number of cardholders past due by 90 days or more fell to 0.92 percent in the second quarter, from 1.17 percent last year.
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Canadian bank report this am
…CIBC Third Quarter Cash EPS Ex Items C$1.66, Est. C$1.53
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US banks pay record-low rates
from NY Post
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Us banks, such as Citigroup and Bank of America, are paying savers the lowest average rates on record amid elevated joblessness and weak loan demand, data collected by Market Rates Insight shows. Rates paid on interest checking, savings, money market and certificates of deposit fell in July to a national...
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Frank to hold hearing on regulation of Wall Street pay practices
from Wash Post
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Rep. Barney Frank, chairman of the House Financial Services Committee, said Tuesday that he will hold a hearing this fall to examine whether regulators are being tough enough in curbing pay practices at Wall Street firms that can lead to excessively risky practices.
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Goldman Sachs is losing market share underwriting corporate bonds, falling to 10th place, with a 3.7% share of this year’s offerings, vs 9th place last year, according to data compiled by Bloomberg
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AIG to decide on AIA pre-IPO sale by next week-sources
from Reuters
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AIG
discloses in filing details of CEO Robert Benmosche’s achievements that allowed him to earn a $3.5m performance- linked bonus after joining the company a year ago
o
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Goldman Meets Chinese Version of Taibbi
from
DealBook
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Goldman Sachs, reviled in the U.S. for its role in the financial crisis, is now getting hammered in the world's No. 2 economy with a sensationalist new book accusing the investment bank of trying to destroy China
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Landsbanki Bond Holders Will Get Next to Nothing, Minister Says
- BBG
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Creditors of failed Icelandic lender Landsbanki Islands hf will get next to nothing back from their investments after assets are sold to cover the bank’s priority claims, Finance Minister Steingrimur Sigfusson said.
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FMR
First Mercury Financial extends share repurchase program; declares unchanged dividend
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CME
Group looks into tweaking its swap-clearing platform - WSJ
ORCC Online Resources upgraded to Outperform from Perform at Oppenheimer - Oppenheimer believes Online Resources is in the early stages of a turnaround
and views valuation as attractive. Target $7.
Macquarie upgraded AJG, AFG, WSH, OB
USB – Rochdale’s Bove positive, reits buy $27
Cantor/WABC: Best Small-Cap Bank Acquiror/Best Defensive Name: Upgrade to BUY
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We regard Westamerica as the best acquiror (see text below) and best defensive name among small-cap banks. Due to (a) Westamerica's recent FDIC-assisted acquisition of Sonoma Valley Bank (SVBank) and (b) our view of Westamerica as the best small-cap bank to own in a double-dip, we are upgrading WABC shares to BUY from HOLD.
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We regard the recent acquisition of SVBank from the FDIC as very positive. Based on (a) a heavily-discounted bid, after intense due diligence, (b) abundant core deposits (about 70% of total deposits) and (c) a strong community business-bank franchise, we expect SVBank to contribute at least $0.17/share annually (2% ROA) when fully integrated (probably 1Q:11). The lack of loss-sharing indicates to us that Westamerica is likely to make open-bank acquisitions, if the price is right.
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In 2Q:10, Westamerica had an ROA of 2.0%, ROE of 18%, net interest margin of 5.62%, all-in cost of funds of 0.31%, core efficiency ratio of 44% and nonperforming assets equal to 1.8% of loans. Most banks cannot come close to matching these metrics in their very best year, much less in a very weak economy. For this reason, we regard Westamerica as a great defensive name. If there is a double-dip, we believe Westamerica will have even more acquisition opportunities.
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Our $62 target price is based on a premium P/E multiple (16x) times our 2011 EPS estimate of $3.90; a premium P/E multiple is justified,
in our view, by very low operating risk, including very strong credit quality, no TARP and a good dividend yield (2.8%). See "Valuation" below.
