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Banks Trail the Market: Financial Losers

Reuters reported on Friday that Bank of America was considering additional assets to boost regulatory Tier 1 capital. The recently announced that its moves to issue new common while retiring preferred shares and long-term debt would increase its Tier 1 capital by $3.9 billion.

Interested in more on Bank of America? See TheStreet Ratings' report card for this stock.

Tuesday's winner among large U.S. banks was People's United Financial (PBCT - Get Report) of Bridgeport, Conn., with shares rising 1% to close at $12.84.

Based on a 16-cent quarterly payout, the shares have a dividend yield of 4.95%, which is a very aggressive payout for the company, which is trying to leverage excess capital.

People's United was included among TheStreet's 10 Large Banks With Very Strong Capital, with a Sept. 30 Tier 1 common equity ratio of 15.00%, according to SNL.

The shares look expensive in the current environment, trading for 1.5 times tangible book value and 15 times the consensus 2012 EPS estimate of 85 cents, among analysts polled by FactSet.

Interested in more on People's United Financial? See TheStreet Ratings' report card for this stock.

Shares of MetLife (MET - Get Report) rose only slightly to close at $31.20, even though the life insurer took a major step as part of its plan to lose its designation as a bank holding company, through its deal to sell most of its MetLife Bank subsidiary to General Electric (GE) unit GE Capital.

While the deal certainly looks like a good one for both companies, since GE Capital is looking to expand its deposit base and MetLife's banking business provides such a small boost to its revenue, it appears that even after MetLife completes its exit from the banking business by selling its mortgage origination operations, the company will still face Federal Reserve scrutiny, as outlined in the regulators proposed rules to strengthen its oversight of large banks and other "systemically important" financial services companies.

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-- Written by Philip van Doorn in Jupiter, Fla.

To contact the writer, click here: Philip van Doorn.

To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.



Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
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