It seems that the TARP-related news from Bank of America (BAC) Thursday morning has many thinking about how much capital other banks will need to raise in order to pay back taxpayers.

One of those banks that some have speculated about is Wells Fargo (WFC). According to Keefe, Bruyette & Woods (KBW), Wells Fargo may need to raise as much as $34 billion in new capital in order to repay TARP. Fortunately for Wells Fargo, KBW believes that the companies strong pre-provision and pre-tax earnings will help limit how much capital Wells Fargowould have to raise.

Continue reading How much would Wells Fargo need to pay off TARP like Bank of America?

How much would Wells Fargo need to pay off TARP like Bank of America? originally appeared on BloggingStocks on Thu, 03 Dec 2009 12:00:00 EST. Please see our terms for use of feeds.

According to the Wall Street Journal, Bank of America (NYSE: BAC) is offering to repay part of the government bailout money it received last year, and the U.S. isn't ignoring the offer.

Supposedly, the U.S. wants the bank to pay at least $500 million in order to stave off a pact that would result in the government losing on certain assets. People familiar with the matter classify the moves as an "extra measure" of federal aid for Bank of America in order to complete its acquisition of Merrill Lynch. Supposedly, both sets of the discussions would allow Bank of America to "reduce a layer of federal involvement in its affairs."

Continue reading Is Bank of America trying to pay back the government or pull a fast one?

Is Bank of America trying to pay back the government or pull a fast one? originally appeared on BloggingStocks on Tue, 01 Sep 2009 13:00:00 EST. Please see our terms for use of feeds.

Continue reading Fed to okay TARP repayment for some banks, appoint a Pay Czar

Fed to okay TARP repayment for some banks, appoint a Pay Czar originally appeared on BloggingStocks on Mon, 08 Jun 2009 10:10:00 EST. Please see our terms for use of feeds.

Cincinnati-based Fifth Third Bancorp (NASDAQ: FITB) announced Wednesday that it plans to sell stock in order to raise capital. FITB plans to sell $750 million of common stock in order to meet its commitment to push its capital beyond the $1.1 billion it needs according to the recent stress tests.

The bank will perform two transactions to help provide the common equity. FITB plans to sell up to an aggregate of $750 million of its common shares occasionally with an "at the market" offering through Morgan Stanley and Merrill Lynch. The firm expects to use a part of the proceeds of shares issued under the offering to fund the cash portion of its offer to exchange cash and common shares for Series G convertible preferred depositary shares.

Continue reading Fifth Third to raise capital by selling stock

Fifth Third to raise capital by selling stock originally appeared on BloggingStocks on Thu, 21 May 2009 09:45:00 EST. Please see our terms for use of feeds.

Remember way back when the U.S. Treasury said it would no longer keep buying toxic assets, but instead would give TARP money directly to the banks to stimulate lending? The Treasury gave 550 banks $200 billion with the understanding that they would use the money to increase their lending.

Forget about it. Banks are not doing what they were directed to do with the TARP money. The U.S. Treasury reported that lending by the 21 largest banks actually fell by 2.2% across all consumer lending categories in February compared with the prior month. Declines were seen in commercial real estate, general business lending, as well as credit cards and student loans. The only bright spot was mortgage refinancing. With the low interest rates now available, refinancing was up 35% in February.

Continue reading TARP bankers are lending less and will prolong the recession

TARP bankers are lending less and will prolong the recession originally appeared on BloggingStocks on Fri, 17 Apr 2009 10:00:00 EST. Please see our terms for use of feeds.

First of all, let me say that Federal law prohibits the disclosure of all bank "stress tests" and bank examinations, so everything said here is pure hearsay.

Nevertheless, we have some good news: Banks are holding up well under Federal examination. All 19 banks will pass their stress tests. The bad news is that they still may need additional taxpayer money.

Continue reading Shh! All 19 banks will pass 'stress tests'

Shh! All 19 banks will pass 'stress tests' originally appeared on BloggingStocks on Fri, 10 Apr 2009 12:00:00 EST. Please see our terms for use of feeds.

Bank of America (NYSE: BAC) CEO Ken Lewis has based what is left of his reputation on the fact that the firm does not need another dime in government money. As a matter of fact, he regrets taking as much TARP cash as he did.

According to Bloomberg, Oppenheimer & Co. believes that "Bank of America Corp., the largest U.S. bank, needs to raise $36.6 billion in equity to bring capital ratios in line with its peers." In this environment, that money is not going to come from the private sector. The only entity with the stones to put it up is the U.S. government.

While the money may not come in exchange for common stock, any instrument is likely to have some conversion provisions, which means that dilution is possible. With a market cap of $44 billion, current Bank of America shareholders will be facing a large haircut if Oppenheimer is right. The stock trades at $7.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Bank of America may need more capital originally appeared on BloggingStocks on Thu, 09 Apr 2009 07:00:00 EST. Please see our terms for use of feeds.

Continue reading Citigroup and Morgan Stanley may add to bank shenanigans

Citigroup and Morgan Stanley may add to bank shenanigans originally appeared on BloggingStocks on Tue, 17 Mar 2009 10:10:00 EST. Please see our terms for use of feeds.

This whole bank bailout mess is getting ridiculous. The newest wrinkle is that insurance companies are getting approval to acquire banks so that they can get a chunk of the TARP bank bailout money. Why we are bailing out insurance companies is a mystery.

Nevertheless, banking regulators last month approved applications from Hartford Financial Services Group Inc. (NYSE: HIG) and Lincoln National Corp Ind. (NYSE: LNC) to become savings and loan holding companies so they can get a bite of the TARP money. In addition, about a dozen insurers have applied for capital injection.

Insurance companies have been seeking federal funds to boost their coffers after large investment losses.

Continue reading Is the bank bailout plan getting out of hand?

Is the bank bailout plan getting out of hand? originally appeared on BloggingStocks on Tue, 10 Feb 2009 12:20:00 EST. Please see our terms for use of feeds.

There is talk by the Federal Reserve, the U.S. Treasury, the U.S. Congress and bankers about creating a "bad bank" and let the government use the next tranche of the bailout money to take the losses from the banks and put them in this bad bank.

First of all, why anyone would want to create something "bad" is beyond a rational person's comprehension. Why not create something "good." Why not take the second half of the TARP money and create a "good bank,"one that is solvent, a bank that everyone can trust, a bank for the future not the past. If we create a "bad bank," there is no future. The money is just wasted again.

Continue reading Create a 'good bank,' not a 'bad bank'

Create a 'good bank,' not a 'bad bank' originally appeared on BloggingStocks on Mon, 26 Jan 2009 15:03:00 EST. Please see our terms for use of feeds.