XLF, Banking and Financial Sector Stocks
- Rande
- JenL_2
- Rande
- Kirk
- Kirk
- Rande
- Rande
- Kirk
- SteveT
- MichaelC_AU
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» Rande - Here's a rhetorical question -- with the 30-year rate breaking
Here's a rhetorical question -- with the 30-year rate breaking 6.7% earlier today (back down below now), why would the bank and financial stocks be rallying the way they are this morning? Big money looking at a potential peak in long rates? Bill Gross (PIMCO, Harbor Bond, Frement Bond, etc.) upped his "buy level" to 6.75% recently from a previous 6.4%. When he starts buying there will be a shipload of money behind him.-- posted by Rande
» JenL_2 - Schwab to Acquire U.S. Trust
And the Mergers Begin. This from 1/13 WSJ:Schwab Plans to Acquire U.S. Trust In Stock Deal Valued at $2.7 Billion
Leading online and discount broker Charles Schwab Corp. agreed Thursday to acquire U.S. Trust Corp. in a transaction valued at $2.7 billion.
Schwab, San Francisco, said the acquisition would bolster its offerings for affluent investors, broadening its product line to include both beginning investors as well as individuals with substantial accumulated wealth.
Schwab said it will exchange 3.427 of its shares for each share of U.S. Trust. The offer values each U.S. Trust share at $129, representing a 63% premium based on Schwab's closing stock price Wednesday. U.S. Trust closed Wednesday at $78.875.
U.S. Trust provides investment management and consulting, fiduciary services, financial and estate planning and private banking. Based in New York City, the company has 24 offices nationwide and 1,900 employees. As of Dec. 31, U.S. Trust had $86 billion of assets under management.
U.S. Trust Chairman and Chief Executive H. Marshall Schwarz and President and Chief Operating Officer Jeffrey S. Maurer will join the Schwab board. Both will maintain their current titles.
Schwab Chairman and Co-Chief Executive Charles R. Schwab and President and Co-Chief Executive David Pottruck will join the U.S. Trust board, which will remain in place.
Both Schwab and U.S. Trust will keep their separate brand identities, but will sharing certain functions across their complementary business lines. The companies said they expect the deal to close by July.
Schwab said it expects to become a financial holding company under the Financial Services Reform Act of 1999, which cleared the way for banks, insurers and securities firms to get into each other's businesses.
On a pro forma basis in 1999, based on the midpoint of the preannounced range for Schwab, the combined company would have had net revenues of $4.5 billion, net income of $663 million, and year-end customer assets of about $800 billion.
Subscribe to WSJ @ http://www.wsj.com
Let's look at some charts:
Schwab - No longer just your friendly Discount Broker, but a Financial Holding Company. It will be interesting to see how this acquistion effects Schwab's NAV short and long term.....Jen
-- posted by JenL_2
» Rande - More on Citigroup.
More on Citigroup. So far, so good for the financials. Check out the link to the "acquisition trail" statement (wonder if there's any "BTO" stocks on their list).» Kirk - Citigroup Blows out numbers - Yipee!
NEW YORK, Jan 18 (Reuters) - Citigroup Inc. (NYSE:C - news), the nation's No. 1 financial services company, said on Tuesday its fourth-quarter net profits topped Wall Street expectations by rising 287 percent to $2.62 billion, powered by investment banking, trading and an uptick in its global consumer banking operation.Full year net income rose to $9.87 billion, a 70 percent increase from $5.80 billion in 1998.
Core earnings in the fourth quarter jumped 86 percent to $2.61 billion from $1.40 billion while full year core earnings gained 57 percent to $9.95 billion from $6.34 billion.
Citigroup earned 75 cents a share net in the quarter, up from 19 cents in the 1998 fourth quarter, when unprecedented economic turmoil in emerging markets battered results.
Core earnings per share for the quarter were 75 cents a share as well, versus 40 cents a share in the prior year's quarter.
Wall Street had expected the company to earn 70 cents a share in the quarter, according to tracking service First Call/Thomson Financial.
``Each of our businesses reinforced its leadership during the year, creating a strong foundation for future profit growth,'' John S. Reed and Sanford I. Weill, Chairmen and Co-Chief Executive Officers of Citigroup, said in a statement.
Surging U.S. stock markets, on the back of the country's historic nine-year economic expansion, an insatiable appetite among investors for new stock offerings, and a worldwide boom in merger deals have bolstered securities businesses at big banks, as well as the major Wall Street houses.
Citigroup's consumer business, which includes credit cards and personal insurance, earned a record $1.17 billion in the fourth quarter, compared with $872 million a year earlier.
Its Salomon Smith Barney securities operation saw profits jump to $664 million from just $13 million in the fourth quarter last year. Its year-ago profits were battered by bond trading losses and poor investment banking results.
``Collaborative efforts among our operations are resulting in new ways to serve customer needs and creating powerful opportunities for our businesses,'' the Citigroup chiefs said.
They added that with revenues twice the level of expenses, the company's efficiency efforts are ``magnifying the impact of revenue gains on the bottom line.''
-- posted by Kirk
» Kirk - BAC (B of A) Earnings Per Share Rise 35%
Bank of America Operating Earnings Per Share Rise 35% to $1.23 In The Fourth Quarter; 1999 Operating Earnings Per Share up 29% to $4.68http://biz.yahoo.com/prnews/000118/nc_bofa_ea_1.html
Key:
Fourth Quarter Earnings (compared to a year ago)
Revenue rose 11 percent, paced by significant improvements in every fee- based business, especially investment banking, trading, mortgage banking and card income. Meanwhile, expenses and provision expense were lower. The completion of annual tax planning strategies resulted in a lower effective tax rate. Operating earnings represented an 18 percent return on common equity.
Lets see…expenses going down and income going up. Sounds like a real problem to me….NOT!
Efficiency
Noninterest expense decreased 3 percent to $4.55 billion, reflecting cost reductions resulting from recent mergers, somewhat offset by continued spending on technology-related projects associated with the merger of NationsBank and BankAmerica and higher incentive payments associated with the build out of the investment banking platform. The efficiency ratio was 56 percent, an improvement of 825 basis points.
Full-Year Earnings
Results for the year also reflected favorable operating leverage created by a 6 percent increase in revenue combined with a 4 percent reduction in expenses and a lower tax rate. The return on equity rose more than 300 basis points to 18 percent.
BTW, my cousin's husband works there. I talked to him Sunday and he is 100% invested and looks for good times to continue. His opinion of marketimers is not high either. He said biggest complaint is their stock options are not in the money due to troubles last year.
-- posted by Kirk
» Rande - JPM had a good report, but it looks like interest rates are taki
JPM had a good report, but it looks like interest rates are taking center stage. Long bond pushing up to 6.75%.From CBSM:
Meanwhile, J.P. Morgan blew past the $2 per share forecast for its fourth quarter, posting net income of $2.63 cents a share or $509 million vs. $89 million or 42 cents a share a year-ago.
-- posted by Rande
» Kirk - Blue Light Special
I rolled some of today's HWP profit taking into this.<img src=http://chart.neural.com/servlet/GIFChart... width=450 height=250>
Much VALUE here
http://finance.yahoo.com/q?s=c+bac+ftu+j...
<img src=http://chart.neural.com/servlet/GIFChart... width=450 height=250>
Anyone know what usually happens after a third successful test of a bottom?
-- posted by Kirk
» MichaelC_AU - Value
I agree that this industry is a value. I like the Long-term value play implications that banks have now.However, I would not expect a turn-around until Greenspan stops applying the brakes. Interest rate hikes are hurting now.
I expect a bank rally within 18 months, hopefully back to the 18-25 PE range. My bank(CNB) is at 9 PE and 5% yield, and repurchasing its shares, but I think a bank index would be better than having just one bank, as last year's acquisition expense write-offs proved to me.
-- posted by MichaelC_AU
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