2013 has been challenging for Emerging Market Debt (EMD). After a solid 2012 in which the EMBI Global Diversified Index provided an 18% return, investors reacted to slowing economic growth and concerns about U.S. monetary policy by reducing exposure to the asset class, which declined by 8.5% in the first half of the year. What does near-term volatility imply for the rest of the year and beyond? Is it an opportunity, a warning sign, or something in between?
In the near term, our perspective is cautious EMD has hit an inflection point of market adjustments to the potential “beginning of the end” of ultra-easy global monetary conditions. Higher rates imply a rotation away from more volatile fixed income areas and into more traditional market segments. However, despite recent noise to the contrary, EM economies are generally improving and the financing needs of sovereign and corporate issuers are relatively moderate—potentially limiting supply and supporti ng credit fundamentals and spreads.
Just as important are the discounts in emerging markets (EM) vs. developed market (DM) counterparts, reflecting less the realities of credit and interest rate concerns and more the overall market inefficiencies and a yield premium associated with perceived risk.
5 Best Bank Stocks To Buy Right Now: Commercial Bancshares Inc (CMOH)
Commercial Bancshares, Inc. is a financial holding company. The Company’s banking subsidiary, The Commercial Savings Bank (the Bank), is engaged in the business of commercial and retail banking, with operations conducted through its main office and branches located in Upper Sandusky, Ohio and neighboring communities in Wyandot, Marion and Hancock counties. The Bank provides customary retail and commercial banking services to its customers, including acceptance of deposits for demand, savings and time accounts, individual retirement accounts (IRAs) and servicing of such accounts; commercial, consumer and real estate lending, including installment loans, and safe deposit and night depository facilities. Commercial Financial and Insurance Agency, LTD is its wholly owned subsidiary. The Bank also owns a 49.9% interest in Beck Title Agency, Ltd.
The Bank grants residential, installment and commercial loans to customers located prim arily in the Ohio counties of Wyandot, Marion and Hancock and the surrounding area. Commercial loans are primarily variable rate and include operating lines of credit and term loans made to small businesses primarily based on the ability to repay the loan from the cash flow of the business. Commercial real estate loans are primarily secured by borrower-occupied business real estate, and are dependent on the ability of the related business to generate adequate cash flow to service the debt. Residential real estate loans are made with primarily variable rates and are secured by the borrower’s residence. As of December 31, 2011, approximately 75.5% of the Company’s loan and lease portfolio consisted of commercial, construction and commercial real estate loans.
Securities are classified as available for sale. Securities available for sale are carried at fair value. The securities available for sale include obligations of the U nited Sates Government and federal agencies, obligations of ! state and political subdivisions, and mortgage-backed securities. As of December 31, 2011, total securities available for sale were approximately $24.5 million, which included approximately $4.06 million of obligations of the United Sates Government and federal agencies, approximately $14.3 million of obligations of state and political subdivisions, and approximately $6.4 million of mortgage-backed securities.
Sources of Funds
As of December 31, 2011, the Company had approximately $259.1 million of deposits, which included approximately $ 38.1 million of noninterest-bearing demand, approximately $103.7 million of interest-bearing demand, approximately $ 86.9 million of savings and approximately $ 30.2 million of time deposits $100,000 and greater. As of December 31, 2011 the Company had no borrowings with Federal Home Loan Banks (FHLB).
- [By Doug Hughes]
Commercial Bancshares (CMOH) operates as the holding company for The Commercial Savings Bank, with just over $300,000 in assets and $259,000 million in loans. This small, but very strong bank had 5% loan growth last year and net charge-offs of just 0.23%.
5 Best Bank Stocks To Buy Right Now: Cullen/Frost Bankers Inc (CFR)
Cullen/Frost Bankers, Inc. (Cullen/Frost), incorporated in 1977, is a financial holding company and a bank holding company. The Company offers commercial and consumer banking services, as well as trust and investment management, mutual funds, Section 1031 property exchange services, investment banking, insurance, brokerage, leasing, asset-based lending, treasury management and item processing services. At December 31, 2011, Cullen/Frost had consolidated total assets of $20.3 billion. The Company operates in two segments: Banking and Frost Wealth Advisors. The Company serves a variety of industries including, among others, energy, manufacturing, services, construction, retail, telecommunications, healthcare, military and transportation. On January 1, 2012, the Company acquired Stone Partners, Inc., a Houston-based human resources consulting firm that specializes in compensation, benefits and outsourcing services. During the year ended December 31, 2011, the Company acquired an insurance agency in the San Antonio market area.
Cullen/Frost’s subsidiaries include The New Galveston Company, Cullen/Frost Capital Trust II (Trust II), The Frost National Bank (Frost Bank), Frost Insurance Agency, Inc., Frost Brokerage Services, Inc. (FBS), Frost Premium Finance Corporation, Frost Investment Advisors, LLC, Frost 1031 Exchange, LLC, Frost Securities, Inc. and Main Plaza Corporation. The Banking operating segment includes both commercial and consumer banking services, Frost Securities, Inc. and Frost Insurance Agency. Commercial banking services are provided to corporations and other business clients and include an array of lending and cash management products. Consumer banking services include direct lending and depository services. Frost Insurance Agency provides insurance brokerage services to individuals and businesses covering corporate and personal property and casualty products, as well as group health and life insurance products. F rost Securities, Inc. provides advisory and private equity s! ervices to middle market companies. The Frost Wealth Advisors operating segment includes fee-based services within private trust, retirement services, and financial management services, including personal wealth management and brokerage services. The parent company’s principal activities include the direct and indirect ownership of the Corporation’s banking and non-banking subsidiaries and the issuance of debt and equity.
The New Galveston Company
The New Galveston Company is a wholly owned second-tier financial holding company and bank holding company. The Company directly owns all of Cullen/Frost’s banking and non-banking subsidiaries with the exception of Cullen/Frost Capital Trust II.
Cullen/Frost Capital Trust II
Trust II is a business trust formed for the purpose of issuing trust preferred securities and lending the proceeds to Cullen/Frost. Trust II is a variable interest entity for which the Company is not t he primary beneficiary.
The Frost National Bank
The Frost National Bank (Frost Bank) is primarily engaged in the business of commercial and consumer banking through approximately 115 financial centers across Texas in the Austin, Corpus Christi, Dallas, Fort Worth, Houston, Rio Grande Valley and San Antonio regions. At December 31, 2011, Frost Bank had consolidated total assets of $20.3 billion and total deposits of $16.8 billion. Frost Bank provides commercial banking services to corporations and other business clients. Loans are made for a variety of general corporate purposes, including financing for industrial and commercial properties and to a lesser extent, financing for interim construction related to industrial and commercial properties, financing for equipment, inventories and accounts receivable, and acquisition financing, as well as commercial leasing and treasury management services.
Frost Bank provides a range of consumer b anking services, including checking accounts, savings progra! ms, autom! ated teller machines, overdraft facilities, installment and real estate loans, home equity loans and lines of credit, drive-in and night deposit services, safe deposit facilities, and brokerage services. Frost Bank provides international banking services to customers residing in or dealing with businesses located in Mexico. These services consist of accepting deposits, making loans, issuing letters of credit, handling foreign collections, transmitting funds, and to a limited extent, dealing in foreign exchange.
Frost Bank acts as correspondent for approximately 316 financial institutions, which are primarily banks in Texas. These banks maintain deposits with Frost Bank, which offers them a range of services, including check clearing, transfer of funds, fixed income security services, and securities custody and clearance services. Frost Bank provides a range of trust, investment, agency and custodial services for individual and corporate clients. These services i nclude the administration of estates and personal trusts, as well as the management of investment accounts for individuals, employee benefit plans and charitable foundations. Frost Bank’s Capital Markets Division offers services, such as sales and trading, new issue underwriting, money market trading, and securities safekeeping and clearance.
Frost Insurance Agency, Inc.
Frost Insurance Agency, Inc. is a wholly owned subsidiary of Frost Bank. Frost Insurance Agency, Inc. provides insurance brokerage services to individuals and businesses covering corporate and personal property and casualty insurance products, as well as group health and life insurance products.
Frost Brokerage Services, Inc.
FBS is a wholly owned subsidiary of Frost Bank. FBS provides brokerage services and performs other transactions or operations related to the sale and purchase of securities of all types.
Frost Premium Finance Corporat ion
Frost Premium Finance Corporation is a who! lly owned! subsidiary of Frost Bank. Frost Premium Finance Corporation makes loans to qualified borrowers for the purpose of financing their purchase of property and casualty insurance.
Frost Investment Advisors, LLC
Frost Investment Advisors, LLC is a registered investment advisor entity and a wholly owned subsidiary of Frost Bank. Frost Investment Advisors, LLC provides investors access to various Frost-managed mutual funds.
Frost 1031 Exchange, LLC
Frost 1031 Exchange, LLC is a wholly owned subsidiary of Frost Bank. Frost 1031 Exchange, LLC assists customers in structuring the exchange of property such that the transactions result in a tax-deferred exchange in compliance with Section 1031 of the Internal Revenue Code.
Frost Securities, Inc.
Frost Securities, Inc. is a wholly owned subsidiary of The New Galveston Company. Frost Securities, Inc. provides advisory and private equity services to middle m arket companies in Texas.
Main Plaza Corporation
Main Plaza Corporation is a wholly owned non-banking subsidiary of The New Galveston Company. Main Plaza Corporation occasionally makes loans to qualified borrowers.
- [By Sarah Jones]
Richemont (CFR) rallied 8.3 percent to 73.80 Swiss francs, the biggest gain since December 2008. The Swiss company said full- year net income climbed about 30 percent as the dollar’s strength against the euro boosted sales growth. Analysts had expected a 25 percent gain in profit, according to the average of 17 estimates compiled by Bloomberg.
- [By Jack Adamo]
Steve Halpern: Another new recommendation is Cullen/Frost Bankers (CFR). There you’ve been recommending the 5.375% Perpetual Preferred Series A (CFR-PA). Now, you call Cullen/Frost one of the best little banks in Texas. What makes this such an attractive issue?
5 Best Bank Stocks To Buy Right Now: Lloyds Banking Group PLC (LYG)
Lloyds Banking Group plc, incorporated on October 21, 1985, is a holding company. The Company is a financial services group providing a range of banking and financial services, primarily in the United Kingdom, to personal and corporate customers. The Company operates in four segments: Retail, Commercial Banking, Wealth, Asset Finance and International and Insurance. Retail provides banking, mortgages and other financial services to personal customers in the United Kingdom. Commercial Banking provides banking and related services to business clients, from small businesses to large corporate. Wealth, Asset Finance and International provides private banking and asset management and asset finance in the United Kingdom and overseas and operates the Company’s international retail businesses. Insurance provides long term savings, protection and investment products in the United Kingdom and Europe and provides general insurance to personal customers in the United Kingdom.
The Retail division operates the retail bank in the United Kingdom and is a provider of current accounts, savings, personal loans, credit cards and mortgages. This includes a range of current accounts including packaged accounts and basic banking accounts. It is also the provider of personal loans in the United Kingdom, as well as being the United Kingdom’s credit card issuer. Retail is the private sector savings provider in the United Kingdom. It is also a general insurance and bancassurance distributor, offering a range of long-term savings, investment and general insurance products.
The Commercial Banking division supports the Company’s business clients from small businesses to corporate. Commercial Banking provides support to corporate clients through the provision of core banking products, such as lending, deposits and transaction banking services whilst also offering clients expertise in capita l markets (private placements, bonds and syndicated loans), ! financial markets (foreign exchange, interest rate management, money market and credit) and private equity.
Wealth, Asset Finance and International
Wealth, Asset Finance and International consists of the Company’s the United Kingdom and international wealth businesses, the Company’s the United Kingdom and international asset finance and online deposit businesses along with its international retail businesses. The Wealth business consists of private banking and asset management. Wealth’s private banking operations cater to the range of wealth clients from affluent to Ultra High Net Worth within the United Kingdom, Channel Islands and Isle of Man, and internationally. Asset Finance consists of a number of leasing and speciality lending businesses in the United Kingdom, including Lex Autolease and Black Horse Motor and Personal Finance along with its leasing and specialty lending businesses in Australia and its European online deposit business. T he international business comprises its non-core banking business outside the United Kingdom, with the exception of corporate business written through the Commercial Banking division. This primarily consists of Ireland, Retail Europe and Asia.
The Insurance division provides long-term savings, protection and investment products and general insurance products to customers in the United Kingdom and Europe. The United Kingdom Life, Pensions and Investments business provides long-term savings, protection and investment products distributed through the bancassurance, intermediary and direct channels of the Lloyds TSB, Halifax, Bank of Scotland and Scottish Widows brands. The European Life, Pensions and Investments business distributes products primarily in the German market under the Heidelberger Leben and Clerical Medical brands. The General Insurance business is a distributor of home insurance in the United Kingdom, with products sold through the branch network, direct channels and strategic corporate! partners! . It operates primarily under the Lloyds TSB, Halifax and Bank of Scotland brands.
- [By Sara Sjolin]
Shares of Lloyds Banking Group PLC (UK:LLOY) (LYG) lost 3.8% after the U.K. bank posted a full-year loss as provisions for mis-selling payment-protection insurance continued to weigh on its bottom line.
- [By Sara Sjolin]
Banks were among major decliners, playing a part in dragging the FTSE 100 index lower. Shares of Barclays PLC (UK:BARC) (BCS) fell 2.7%, Royal Bank of Scotland Group PLC (UK:RBS) (RBS) dropped 2.9%, Lloyds Banking Group PLC (UK:LLOY) (LYG) gave up 2.3% and sector heavyweight HSBC Holdings PLC (UK:HSBA) (HBC) (HK:5) erased 1.3%.
5 Best Bank Stocks To Buy Right Now: Banco Santander Brasil SA (BSBR)
Banco Santander (Brasil) S.A. (Santander Brasil), incorporated on August 9, 1985, is a full-service bank in Brazil. The Bank operates its business along three segments: Commercial Banking, Global Wholesale Banking and Asset Management and Insurance. Through its Commercial Banking segment, the Bank offers traditional banking services, including checking and savings accounts, home and automobile financing, unsecured consumer financing, checking account overdraft loans, credit cards and payroll loans to mid- and high-income individuals and corporations (other than to its Global Banking and Markets clients). Its Global Wholesale Banking segment provides financial services and solutions to a group of approximately 700 local and multinational conglomerates, offering such products as global transaction banking, syndicated lending, corporate finance, equity and treasury. Through its Asset Management and Insurance segment, the Company manages fixed income, money market, equity and multi-market funds and offers insurance products complementary to its core banking business to its retail and small- and medium-sized corporate customers.
As of December 31, 2010, the Bank’s total loans and advances to customers equaled R$160.6 billion (42.9% of its total assets). Net of allowances for credit losses, loans and advances to customers equaled R$151.4 billion as of December 31, 2010 (40.4% of its total assets). In addition to loans, it had outstanding R$93.5 billion as of December 31, 2010.
Substantially all of its loans are to borrowers domiciled in Brazil and are denominated in reais. Its commercial, financial and industrial loans include primarily loans to small and medium-sized enterprises (SMEs) in its Commercial Banking segment, and to Global Banking and Markets corporate and business enterprise customers in its Wholesale Global Banking segment. The principal products offered to SMEs in this categ ory include revolving loans, overdraft facilities, installme! nt loans, working capital and equipment finance loans. Credit approval for SMEs is based on customer income, business activity, collateral coverage and internal and external credit scoring tools. Collateral on commercial, financial and industrial lending to SMEs generally includes receivables, liens, pledges, guarantees and mortgages, with coverage generally ranging from 100% to 150% of the loan value depending on the risk profile of the loan. Its Wholesale Global Banking customers are offered a range of loan products ranging from typical corporate banking products (installment loans, working capital and equipment finance loans) to more sophisticated products (derivative and capital markets transactions).
The Bank’s Real estate-construction loans include construction loans made principally to real estate developers that are SMEs and corporate customers in its Wholesale Global Banking Segment. Loans in this category are generally secured by mortgages and recei vables, though guarantees may also be provided as additional security. Real estate-mortgage loans include loans on residential real estate to individuals. All loans granted under this category are secured by the financed real estate. Installment loans to individuals consist primarily of unsecured personal installment loans (including loans whose payments are automatically deducted from a customer’s payroll), revolving loans, overdraft facilities, consumer finance facilities and credit cards. Lease financing includes primarily automobile leases and loans to individuals. The vehicle financed acts as collateral for the particular loan granted.
The Bank’s investments include Government securities-Brazil, Government securities-other countries and other debt securities. As of December 31, 2010, the book value of the investment securities was R$84.7 billion (representing 22.6% of its total assets). Brazilian government securities totaled R$55.8 billion, or 65.9% of the Bank’s investment! securiti! es as of December 31, 2010. As of December 31, 2010, the Bank held no securities of single issuers or related group of companies whose aggregate book or market value exceed 10% of stockholders’ equity, other than Brazilian government securities, which represented 76.9% of its stockholders’ equity.
Sources of Funds
The Bank offers its customers a variety of deposit products, such as current accounts (also referred to as demand deposits), which do not bear interest; traditional savings accounts, which earn the Brazilian reference rate for savings accounts (taxa referencial) plus 0.5% per month, as set by the federal government, and time deposits, which are represented by certificates of bank deposits (CDBs), which normally have a maturity of less than 36 months and earn interest at a fixed or floating rate. In addition, it accepts deposits from financial institutions as part of its treasury operations, which are represented by certificates of int erbank deposit CDIs, and which earn the interbank deposit rate.
- [By Rudy Martin]
We are buying Banco Santander (Brasil) S.A. (BSBR) to gain broad additional exposure to the Brazilian.
BSBR offers a full-service range of financial services, including individual and corporate banking. We also hope to benefit from the stock’s 7.2% current indicated dividend yield.
5 Best Bank Stocks To Buy Right Now: Federal Home Loan Mortgage Corp (FMCC)
Federal Home Loan Mortgage Corporation (Freddie Mac) conducts business in the United States residential mortgage market and the global securities market. The Company operates in three segments: Single-family Guarantee, Investments, and Multifamily. The Single-family Guarantee segment reflects results from the Company’s single-family credit guarantee activities. The Investments segment reflects results from the Company’s investment, funding and hedging activities. The Multifamily segment reflects results from the Company’s investment (both purchases and sales), securitization, and guarantee activities in multifamily mortgage loans and securities. The Company conducts its operations in the United States and its territories.
Single-Family Guarantee Segment
In the Company’s Single-family Guarantee segment, it purchases single-family mortgage loans originated by the Company’s seller/servicers in the primary mortgage market. The Company uses the mo rtgage securitization process to package the purchased mortgage loans into guaranteed mortgage-related securities. The Company guarantees the payment of principal and interest on the mortgage-related security in exchange for management and guarantee fees. The Company’s customers are lenders in the primary mortgage market that originate mortgages for homeowners. These lenders include mortgage banking companies, commercial banks, savings banks, community banks, credit unions, Housing Finance Agency (HFAs), and savings and loan associations. The Company’s customers also service loans in its single-family credit guarantee portfolio.
Mortgage securitization is a process, by which the Company purchase mortgage loans that lenders originate, and pool these loans into mortgage securities that are sold in global capital markets. The United States residential mortgage market consists of a primary mortgage market that links homebuyers and lenders and a secondary mortga ge market that links lenders and investors. The Company part! icipates in the secondary mortgage market by purchasing mortgage loans and mortgage-related securities for investment and by issuing guaranteed mortgage-related securities. In the Single-family Guarantee segment, it purchase and securitize single-family mortgages, which are mortgages that are secured by one- to four-family properties. The types of mortgage-related securities it issue and guarantee include PCs, REMICs and Other Structured Securities and Other Guarantee Transactions. The Company also issue mortgage-related securities to third parties in exchange for non-Freddie Mac mortgage-related securities. The non-Freddie Mac mortgage-related securities are transferred to trusts that were specifically created for the purpose of issuing securities, or certificates, in the Other Guarantee Transactions.
In the Company’s Investments segment, it invests principally in mortgage-related securities and single-family performing mortga ge loans, which are funded by other debt issuances and hedged using derivatives. In the Company’s Investments segment, it also provides funding and hedging management services to the Single-family Guarantee and Multifamily segments. The Company’s customers for its debt securities predominantly include insurance companies, money managers, central banks, depository institutions, and pension funds. The Company funds its investment activities by issuing short-term and long-term debt. The Company’s PCs are an integral part of its mortgage purchase program. The Company’s Single-family Guarantee segment purchases many of its mortgages by issuing PCs in exchange for those mortgage loans in guarantor swap transactions. The Company also issue PCs backed by mortgage loans that it purchased for cash.
The Company’s multifamily segment issues Other Structured Securities, but does not issue REMIC securities. The Company multifamily s egment also enters into other guarantee commitments for mult! ifamily H! FA bonds and housing revenue bonds held by third parties. The Company acquires a portion of its multifamily mortgage loans from several large seller/servicers.
The Company competes with Federal National Mortgage Association (Fannie Mae), Government National Mortgage Association (Ginnie Mae), Mae Federal Housing Administration/the United States Department of Veteran Affairs (FHA/VA) and Federal Home Loan Bank (FHLB).
- [By John Kell and Lauren Pollock var popups = dojo.query(“.socialByline .popC”); ]
Bank of America Corp.(BAC) on Wednesday said it would pay about $9.5 billion to settle all litigation by a top U.S. federal regulator over mortgage securities sold to Fannie Mae(FNMA) (FNMA) and Freddie Mac(FMCC) (FMCC). Shares edged up 13 cents to $17.31 premarket.
- [By Ben Levisohn]
The S&P 500 fell 0.5% to 1,867.63, while the Dow Jones Industrial Average dropped 0.4% to 16,351.25. Goldman Sachs fell 2.1% to $169.89 today (weakness in commodities hitting the investment banks?), while United Technologies declined 1.8% to $115.64 and E.I. du Pont de Nemours dropped 2% to $66.01 after it said that bad weather and turmoil in the Ukraine would hit earnings. Fannie Mae (FNMA) fell 31% and Freddie Mac (FMCC) dropped 27% after leaders of the Senate banking committee Senate agreed on a plan to wind them down.
- [By Alexander MacLennan]
As the name implies, government sponsored entities (GSEs) have a relationship with the government that is more than the standard private corporation-to-government relationship. But after the financial crisis of 2008 and some changes to the financing terms in 2012, Fannie Mae (NASDAQOTCBB: FNMA ) and Freddie Mac (NASDAQOTCBB: FMCC ) are more in government control than almost any other shareholder-owned corporation.