This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Political Dividends: Weekly Financial Recap

NEW YORK (TheStreet) -- Mergers and politics dominated the headlines in the financial services industry this week as the midterm elections promise to upset the banking-regulation applecart and a new round of mergers in the trust bank space added to industry drama.

Later in the week, banks stocks were boosted by a report that the Federal Reserve may allow larger, well capitalized banks to begin upping their dividends.


On Monday, M&T Bank (MTB) agreed to acquire Wilmington Trust (WL) in a stock-for-stock transaction valued at about $351 million.

The transaction rings in at half of the bank's market value last week, with investors getting 0.051372 shares of M&T for each Wilmington share they own. Management described the deal as "painful and difficult" on their third earnings conference call. One class action firm is investigating whether or not Wilmington Trust was properly shopped.

Trust Banks Set for Mergers

Separately, Ambac Financial Group (ABK) is in talks with senior creditors to file a prepackaged bankruptcy, according to a Securities and Exchange Commission filing. The company warned the board that it will not make an interest payment on the company's debt due November 15. As of June 30, 2010, Ambac had debt of $1,622 million.


Goldman Sachs said the largest U.S. banks face "potential losses of $26 billion spread across several years" as they are forced to buy back securitized mortgages or take other credit losses on loans going through the foreclosure process.

Between JPMorgan Chase's (JPM) release of third-quarter earnings results on October 13 and Wells Fargo's (WFC) third-quarter release on August 20, the largest four banks - which also include Citigroup (C) and Bank of America (BAC) -- lost $28 billion in market capitalization, according to the report.

Tuesday's midterm election could mean major changes in the mortgage and housing markets. The House Financial Services Committee current chairman, Rep. Barney Frank (D., Mass.), will no longer be in the majority.

Frank's likely successor as chairman, Rep. Spencer Bachus (R., Ala.), has been a harsh critic of bailouts and housing-finance policy.

Spencer Bachus, Republican of Alabama
Spencer Bachus, Republican of Alabama

In recent months, Bachus has also become a tough critic of Fannie Mae and Freddie Mac - pledging to shut them down, asking for investigations into their practices and railing against their continued receipt of taxpayer funds. Bachus also voted against the Dodd-Frank financial reform bill, saying: "This is not real reform."


Uncle Sam is relenting on some bank demands to allow them to start paying dividends. The Fed is expected to allow strong banks to up their dividend payments, The Wall Street Journal reported Thursday.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,039.49 +60.36 0.36%
S&P 500 1,992.37 +5.86 0.30%
NASDAQ 4,532.1040 +5.6220 0.12%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs