The Top 12 U.S. Banks: From Zombies to Hidden Gems

I'm finding that I'm a late arrival to the apparently long line of people who find Martin's work knowledgeable, insightful and balanced . Great article, thank you Martin.

Will AIG be a good investment at this time? I understand that except for a couple of grey areas, the company is otherwise solid.

thanks

*don't know

Hi
I want to ask you with all these ZOMBIES walking around any of us that have saving limitted below amounts coverd by FDIC can get hit? if yes how and why does FDIC have fund to cover and would our GOVROMENT let this banks sink?

Know that American taxpayers are LENDING to banks (whether 'healthy' or distressed) at an interest rate of 0%! (ZERO percent !) Require those banks to structure every new loan and restructure every existing loan at a 2% to 4% interest rate (based upon income).
2% interest rates would save the average mortgagee
about $600 every month, to spend as they will. This would 'free up' and cause the flow of $50,000,000,000 of 'extra spending money' into the American economy every month. The inherent byproduct of the resulting commerce is employment. This will also recreate housing demand and lead to restoring home values.

It is high mortgage rates which are exacerbating our stressed economy, creating foreclosures, and causing us toward a DEPRESSION.

If we do not create economic relief of this magnitude, 'domino effects' will soon devastate our entire economy with anarchy as the consequence.

Since you have analyzed the top 12 banks in the US, why do you not take a look at foreign banks that operate in the US. For example, 4 of the big 5 Canadian banks operate through subsidiaries in the US and consistently make money. They also have high dividend yields and do not need either TARP or bailout money.

Some of your 'hidden gems' and so-called solid banks like USBank did participate in the TARP and would be unlikely to shell out their promised dividends. Plus they may be severely limited by the current administrators punitive stance re: TARP funds.

But seriously, I would like to see a more focussed Think Tank put together to target this financial meltdown. I can't believe our best and brightest would not be able to come up with better solutions??

Your Chapter 11 solution for Citi and BAC is the first commonsense I've heard in this financial crisis. Thanks for the rest of the analysis also. Good post.

Let free mrkts solve problem. Create ETFs to buy toxic-assets & u create pricing mechanism quickly. Isn't that the uncertainty that is causing road-block to a resolution of systemic problems?

I bought BAC based on your Buy, Hold, Sell column recommendation – now I'm stuck with a "Zombie".

I agree with Mr. Knight!!!!
The banks CAUSED this problem with a little help from the Credit Relief Act and THE BUBBLE BUILDER Himself, Alan Greenspan!!! And now the entire WORLD is suffering!!! America has caught the BLACK PLAGUE and it spread…The banks should either be ready and willing to restructure loans at 2-4% or be forced too! A little more help came from the real estate agents, the lenders and mortgage brokers to create this “Bubble” while earning fortunes in real estate sales commissions while hiding behind "CAVEAT EMPTOR." in the Life Insurance industry, there is something called a FREE LOOK PERIOD which lasts 10-20 days where a policy buyer can cancel with a full refund. Maybe the REAL ESTATE INDUSTRY should be FORCED to employ the same FREE LOOK PROVISION on real estate transactions…? That would ENSURE DUE DILLIGENCE at the AGENT LEVEL because NO AGENT would want a commission CHARGE BACK of say, $30,000 in real estate commissions because of a FREE LOOK…

The bank that offers the proactive program to its embattled mortgagors will save a fortune in manpower, time, aggravation and the actual cost of foreclosure on a macro scale. This will also prevent a further landslide of real estate prices, which could also prevent municipal bankruptcy across the country. These proactive programs will ultimately keep balance sheets healthy and make lending very profitable once again. The profits will come through in sheer quality loan volume to be kept on the books until maturity or payoff, whichever comes first.
The CEO of the bank that becomes the architect and offers this highly publicized proactive relief program to anyone of its’ existing troubled borrowers will become a national hero and own the wallet-share of the United States of America. By making the loan more attractive with a rate discount for those with a complete banking relationship and a auto-payment program from a checking account to the loan, the Bank of America (Bank of Opportunity) would become that national hero overnight and become a global banking titan with a much friendlier appeal in the eye of the nations’ masses. The balance sheet will flourish for years to come!!!!

Because of lax regulatory oversight on the federal level and Wall Streets magnificently notorious bloodthirsty greed, the American dream of home ownership has in fact become, for many responsible American CITIZENS, their worst nightmare.

Get ready for the birth of the United Socialist Republic of North America, nationalize banks, then healthcare and transportation and you have SOCIALISM….. WAKE UP BANK CEO's and smell the stench you've created, get busy and FIX the AMERICA you've all but BANKRUPTED!!!!!

Thank you for this article Martin.

If US Bank Corp goes below $10/share, like it did a week ago, I suggest you take every dime you got, and go long on it! You'll have a 4-timer on your hands in less than 2 years! This company is the best of the banking industry, and pays a great dividend in the meantime (where can you get 15% returns while 'hanging out' nowadays?)

In reply to Sharon Warden of Feb 19,2009, her query–"What is the status of First National Bank of Omaha?" First National Bank Omaha was DENIED TARP funds, as was National City Bank just before it collapsed.These two banks were the ONLY TWO AMERICAN banks DENIED BAILOUT FUNDS, and ask yourself WHY were they denied TARP? Financial crimes? Is it insolvent? Yes, likely reasons. The entire sector died of debt years ago, and needs the taxpayer's money to continue to exist(and exist to fee the taxpayer to death!). PS:First National Bank Omaha's credit card APR in 2007 was 33%!!!!This was the bank that helped build the zombie fraud ENRON!