After almost a year of initiating the $700 billion Troubled Asset Relief Program (TARP) to rescue the nation’s financial industry, the U.S. Treasury Department said on Thursday that it would auction off stock warrants it acquired from three big banks that received a significant portion of taxpayers’ money and have fully repaid the same. The [...]

(JPM) Treasury to Auction TARP Warrants

This is the next installment in our series about Expert Advice from the United Soybean Board. While attending the National Association of Farm Broadcasting Convention I spoke with USB Treasurer Marc Curtis who farms in Mississippi. Marc serves on the USB Production Committee so he’s especially happy that the organization can offer Expert [...]

After almost a year of initiating the $700 billion Troubled Asset Relief Program (TARP) to rescue the nation’s financial industry, the U.S. Treasury Department said on Thursday that it would auction off stock warrants it acquired from three big banks that received a significant portion of taxpayers’ money and have fully repaid the same. The government is taking this step to free the lenders from the federal bailout program. 

The three banks, whose warrants will be sold via auctions over the next month, are JPMorgan Chase (JPM), Capital One Financial (COF) and TCF Financial Corporation (TCB). These three banks, that received a total of $28.9 billion from the TARP, have fully repurchased Treasury's preferred stock investment. The current move to sell their warrants will completely free these banks from government intervention. 

The government still holds warrants of 261 banks, out of which only 15 have paid back the bailout money but not repurchased their warrants yet. Many other financial institutions that have already repaid bailout money include American Express (AXP), Goldman Sachs (GS), Morgan Stanley (MS), BB&T Corporation (BBT) and US Bancorp (USB). Also, banks like Bank of America (BAC), Wells Fargo (WFC) and Citigroup (C) are expected to exit TARP over the next 12 to 18 months. 

Treasury will sell the warrants through a modified Dutch auction. According to the format, the three banks will be able to bid for the warrants themselves. However, the price at which banks could buy back the warrants became a contentious issue as banks started repaying their bailouts. 

We think that the repayment of government money and repurchase of warrants can be viewed as a sign of recovery of the institutions as well as the economy. Also, the full repayment of government money by the bailed-out firms will help protect their executive compensation packages.
Read the full analyst report on "JPM"
Read the full analyst report on "COF"
Read the full analyst report on "TCB"
Read the full analyst report on "AXP"
Read the full analyst report on "GS"
Read the full analyst report on "MS"
Read the full analyst report on "BBT"
Read the full analyst report on "USB"
Read the full analyst report on "BAC"
Read the full analyst report on "WFC"
Read the full analyst report on "C"
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After almost a year of initiating the $700 billion Troubled Asset Relief Program (TARP) to rescue the nation’s financial industry, the U.S. Treasury Department said on Thursday that it would auction off stock warrants it acquired from three big banks that received a significant portion of taxpayers’ money and have fully repaid the same. The government is taking this step to free the lenders from the federal bailout program.[More...]

NOTE TO EDITORS: The Following Is an Investment Opinion Being Issued by RothmanResearch.com.

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US Bancorp (NYSE: USB) closed yesterday at $23.64. So far the stock has hit a 52-week low of $8.06 and 52-week high of $29.90. US Bancorp stock has been showing support around 22.81 and resistance in the 24.09 range. Technical indicators for the stock are Bullish and S&P gives USB a neutral 3 STAR (out of 5) ho...(Click the story link or go to http://www.marketintelligencecenter.com for the full story)

JPMorgan Chase & Company (JPM) is in discussions to take full control of its U.K. joint-venture partner, Cazenove Group, for about £1 billion ($1.7 billion). JPMorgan entered into a partnership with Cazenove five years ago. At that time, JPMorgan paid about £100 million for a 50% ownership in Cazenove. Now, JPMorgan intends to buy the remaining 50% [...]

(JPM) JPMorgan Chase to Buy Rest of Cazenove Group

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Five Year Agreement Spans Across North America

JPMorgan Chase & Company (JPM) is in discussions to take full control of its U.K. joint-venture partner, Cazenove Group, for about £1 billion ($1.7 billion).
 
JPMorgan entered into a partnership with Cazenove five years ago. At that time, JPMorgan paid about £100 million for a 50% ownership in Cazenove.
 
Now, JPMorgan intends to buy the remaining 50% of the investment-banking partnership for 500−525 pence per share.
 
Chief Executive Naguib Kheraj, the former finance chief of Barclays PLC (BCS) is running JPMorgan Cazenove since last year. Cazenove first became one of London's leading stockbrokers in the mid-1930s.
 
Deciding on the full acquisition of Cazenove has been crucial for Jamie Dimon, CEO of JPMorgan. Dimon organized a similar purchase of the bank’s remaining stake in Highbridge Capital Management this year.
 
In the last few years, JPMorgan has been able to maintain its top position in global investment banking. The company also emerged from the financial crisis stronger than many of its peers such as Bank of America Corporation (BAC), Wells Fargo & Company (WFC) and US Bancorp (USB).
 
We think that JPMorgan is in a relatively good shape from a capital perspective. We expect the company’s capital position to be a major differentiator going forward vis-à-vis its peers as it implies lower risk of additional capital raises and more opportunity for market share gains. Also, in the second quarter of 2009, the company repaid the entire $25 billion in preferred capital received as part of the Troubled Asset Relief Program (TARP).
 
We anticipate continued synergies from the company’s diversification and strong capital position, but increasing provisions and worsening credit quality will be a drag on upcoming results. 

Read the full analyst report on "JPM"
Read the full analyst report on "BCS"
Read the full analyst report on "BAC"
Read the full analyst report on "WFC"
Read the full analyst report on "USB"
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