Today - Monday, March 2, 2015
- Last week, Morgan Stanely (MS +1.1%) cut a deal for $2.6B to settle a federal probe into pre-crisis mortgage activities, but the bank - in its 10-K - disclosed the New York Attorney General has informed it of a potential lawsuit relating to roughly 30 subprime MBS deals.
- Morgan has set aside $2.8B for legal costs from still-unresolved cases, Other potential suits could come from California, Virginia, and Illinois.
- Previously: Morgan Stanley removes overhang with mortgage settlement (Feb. 26)
- A 16-year veteran at Goldman (NYSE:GS), Gordon Dyal was global M&A head from 2004-2011, and has been co-chairman of the investment-banking division since.
- Also exiting is Jim Katzman, the head of the bank's west coast M&A business. He's been with Goldman for 17 years.
- Last week, it was announced that Gene Sykes - co-head of global M&A - was being kicked upstairs to become co-chairman of the group, with two others coming in to join Gregg Lemkau as his new co-heads.
- Previously: Goldman shakes up M&A leadership (Feb. 26)
- Previously: Goldman Sachs cutting Singapore investment bank jobs (March 2)
- STAG didn't acquire any properties in February, but as of today had inked agreements to buy seven industrial buildings for $94M. Included in those deals are three build-to-suit transactions for about $31M, and scheduled to close in Q2.
- The company also signed non-binding LOI's for another 10 properties for $61M.
- As of today, the pipeline of potential purchases is for 112 buildings and more than $1.3B.
- Source: Press Release
- Q4 net income of $2.1M or $0.05 per share. 7.8M shares repurchased during quarter for average price of $3.74 each, includes 4.9M shares purchased on Dec. 10 in the "Dutch Auction" for $3.75 each.
- Company continues to look for a buyer, or some other strategic alternative.
- No conference call has been scheduled.
- Outlook: "We continue to believe that current market conditions in our primary lending markets are consistent with a peak of a credit cycle... Our primary asset is unencumbered cash and we do not have sufficient net earning assets to generate positive net operating income at this time."
- Previously: MCG Capital beats by $0.05, beats on revenue (March 2)
- MCGC flat on the session at $3.90.
- Nationstar Mortgage (NSM -4.2%) and Walter Investment (WAC -1.6%) add to last week's sizable post-earnings losses as FBR's Paul Miller throws in the towel on Nationstar - downgrading to Market Perform from Outperform - and makes Walter an Underperform from Market Perform.
- Previously: Earnings fall, but operating cash flow flat at Nationstar (Feb. 26)
- Previously: Walter Investment -16% as legal and regulatory costs rise (Feb. 26)
10:32 AM| Comment!
- Popular (BPOP +1.7%) and First BanCorp (FBP +1.1%) are "major winners" from the closing of Doral Financial, says Sterne Agee's Brett Rabatin, and weekend deals to take over Doral assets could add $1 per share to BPOP's tangible book value.
- The shutdown of Doral, says Rabatin, should give investors confidence steps are being taken to improve the banking climate on the island. The space, he says, is highly value-oriented and underappreciated. BPOP, FBP, and OFG Bancorp (NYSE:OFG) are all buy-rated, with BPOP Rabatin's island favorite.
- BPOP's slide deck on the Doral acquisition
- Previously: Doral Financial taken over by FDIC (Feb. 27)
- Q4 net investment income of $18.1M or $0.55 per share vs. $15.4M and $0.51 in Q3. Dividend is $0.54.
- Net increase in net assets from operations of $500M or $0.01 per share. The company experience a decline of $8.8M or $0.29 per share in Q3.
- Net asset value per share of $16.11 slips from $16.64. Friday's close was $23.67.
- Non-accrual assets as a percentage of total portfolio of 5.8%; as a percentage of fair value of 3%.
- Earnings call is underway.
- Previously: Triangle Capital beats by $0.04, beats on revenue (March 2)
- TCAP flat premarket
- As it works to shore up its relations with regulators (including an expected fail in the stress test this week), Santander Holdings USA has - as expected - chosen former JPMorgan consumer bank chief Scott Powell as its CEO, reports the WSJ.
- The unit owns Santander Bank as well as 60.5% of subprime lender Santander Consumer USA (NYSE:SC).
- It's the latest move by Ana Botin who took over Santander (NYSE:SAN) in September after her father's sudden passing. In addition to shaking up management in Spain, she's cut the dividend and raised $9B in capital.
- Today's move is less about changing the business plan of Santander's U.S. unit, and more about getting back in the good graces of American regulators, reports the Journal, citing a number of sources.
- Government Properties Income Trust (NYSE:GOV) agrees to buy 3.4M shares of Select Income REIT (NYSE:SIR) from Lakewood Capital Management for $27.85 per share (vs. Friday's closing price of $24.69).
- The move will boost GOV's stake in SIR to about 28.8% of the company from 24.3%.
- Both GOV and SIR, of course, are run by the Portnoy's Reit Management & Research (RMR), and Lakewood had built a stake in Select income maybe with the intention of removing the Portnoys from power there as they had been removed from Commonwealth REIT (now renamed Equity Commonwealth).
- Source: Press Release
- Previously: Activist targets Select Income REIT (Jan. 14)
- One of this country's largest participants in the bubbly subprime auto lending market, Wells Fargo (NYSE:WFC), reports the NYT, for the first time is imposing a cap on the amount of subprime loans it will offer - no more than 10% of overall auto loan originations, which last year was about $30B.
- The move could have big effect as Wells Fargo - having sidestepped the worst of the mortgage mess - has earned a reputation for knowing something about managing risk.
- The cap is already being felt across the auto market, and dealers are noting the bank increasingly rejecting loans which previously might have been accepted.
- Capital One (NYSE:COF), Santander Consumer (NYSE:SC), Ally Financial (NYSE:ALLY) ... ball's in your court now.
- Previously: Ally mulling return to mortgages, credit cards (Feb. 20)
- Square 1 (NASDAQ:SQBK) will receive 0.5997 shares of PacWest (NASDAQ:PACW) common stock for each share of Square 1 they own - total consideration of $27.49 based on the most recent price.
- Square 1 in HQ'd in Durham, NC and has about $3.1B in assets, and L.A.-based PacWest has $16.2B in assets. Combined, the two will have nearly $20B in assets, 80 branches in CA, and one in NC.
- The deal is expected to close in Q4.
- Source: Press Release
- Citigroup (NYSE:C) will become the exclusive co-issuer of Costco's (NASDAQ:COST) co-brand credit cards, and Visa (NYSE:V) will replace American Express (NYSE:AXP) as the credit card network for Costco in the U.S. and Puerto Rico, beginning April 1, 2016.
- On CNBC as the news hit, AmEx shareholder Warren Buffett: Citi won't get rich off the Costco deal.
- Source: Press Release
- C +0.6%, V +2.4% premarket
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