TARPedBanks (< 20)

More TARP Paybacks

June 10, 2009 – Comments (3) | RELATED TICKERS: WFSL , FNFG , VLY

For those not familiar, this profile was set up last November to track performance of banks that took TARP money.  This is primarily a housekeeping journal to record closing some of the picks as the banks repurchase TARP preferred. 

According to the latest TARP Transactions Report, seven banks have repurchased all their TARP preferred and one bank has made a partial repurchase since my last update.

Of the seven, the two listed below were on the TARPedBanks scorecard and those picks have been ended.

Washington Federal, Inc.             WFSL
First Niagara Financial Group      FNFG

Five of the banks weren't on the scorecard, either because they didn't meet CAPS rating criteria or because I missed them.

Berkshire Hills Bancorp, Inc.       BHLB
Alliance Financial Corporation    ALNC
Somerset Hills Bancorp               SOMH
SCBT Financial Corp.                   SCBT

One bank, Valley National Bancorp (VLY) has repurchased a portion of their TARP preferred.  VLY is a TARPedBanks pick and will stay on the scorecard until they complete the repurchase.

A number of the big banks have been approved to repay TARP, but none have completed the transactions yet.  I'll do my best to keep this current, but work and life occaisionally get in the way.  I've decided the criteria for ending one of these picks will be completing repurchase of the TARP preferred. 

I don't plan on trying to keep tabs on the warrants, although that's an interesting side bar to the program.  My hope is the government will auction the warrants in a way that allows individual investors to get in on the bidding.

During the TARPed Banks contest, I updated the pick list to include as many of the banks participating in TARP as possible.  I had missed many of them, but adding a bunch of tickers five or six months after the start will make comparing performance to the indices difficult.  If I have time this weekend, I'll take a stab at comparing the performance TARPed banks to unTARPed banks.

The player performance, however, is easy to track.  I'm ranked 67610 out of 67615.  That's up slightly from the dead last ranking from a few months ago, but down from a month or so ago.  At one point last month, I think the profile rocketed all the way up to something like a 0.05 or 0.10 rating.  The rally in financials that started back in March helped a little vs the SPY for awhile, but it seems to be slipping again.

As before, investing in a broad basket of TARPed banks last fall would have been a really, really bad move.  Buying that basket in late March would have been a mixed bag.  However, within the group there are some stellar performances in both absolute terms and relative to the S&P.  Examples include:
PHH Corp - up over 200% since last Nov
Morgan Stanley and Goldman Sachs - both up well over 100% since last Nov
American Express - a near double since late March
Principal Financial Group and Great Southern Bancorp - near doubles since Nov 08/Jan 09

Many of the late March picks have made substantial moves in just a little over two months.

From looking at the player ranking, you would be correct in assuming their are lots of examples at the other end of the spectrum as well. 

Fool on!

Russ (aka rd80)