NEW YORK (
Bank of America
was the winner among the largest U..S. banking names on Monday, with shares rising 2% to close at $7.97, on an otherwise bleak day for the sector.
The broad indexes saw slight declines, as investors yet again fretted over a possible default by Greece, which was continuing frantic negotiations for a second bailout package totaling 130 billion euro ($171 billion) in time for a March 20 deadline for bond repayments totaling 14.5 billion euro ($19.1 billion). Meanwhile, the Greek government announced that it would lay off 15,000 public sector workers by the end of the year.
The KBW Bank Index
pulled back 1% to close at 44.70, with all but five of the 24 index components showing declines for the session.
Bank of America has been boosting its capital ratios through major asset sales, which were planned to include its MBNA Europe, however,
Dow Jones Newswires
on Monday reported that the sale had been "abandoned," citing unnamed sources.
Bank of America declined a request for comment. Dow Jones reported that suitors for MBNA Europe included
Bank of America's shares have now risen 45% year-to-date, after sinking 58% during 2011, mainly from the legacy mortgage putback risk, from the company's purchase of Countrywide Financial in 2008.
The company had "$15.9 billion reserved to address potential representations and warranties mortgage repurchase claims" as of Dec. 31.
With the shares still on fire, following Friday's glowing unemployment report and the tossing of
lawsuit against Bank of America over $700 million in mortgage-backed securities originally purchased from Countrywide, investors are now anticipating some clarity on the company's ultimate mortgage putback risk, heading into the anticipated settlement between the nation's largest loan servicers, federal regulators, and states' attorneys general.
Then again, the settlement
Even sell-side analysts are getting a little nervous, with KBW's Fred Cannon saying on Monday that "there is no reason to believe, in our opinion, that financials are fundamentally undervalued and can continue to outperform the S&P without expanded earnings capacity."
Bank of America's shares are still heavily discounted, trading for just 0.7 times tangible book value, according to HighlineFI, but the shares are now looking relatively pricey, at 11 times the consensus 2012 EPS estimate of 72 cents, among analysts polled by Thomson Reuters.
Interested in more on Bank of America? See TheStreet Ratings' report card for this stock.
Capital One Financial
was the financial loser on Monday, with shares dipping 3% to close at $47.90.
The shares are now up 13% year-to-date.
announced on Monday that after a meeting Wednesday for discussions on Capital One's pending acquisition of
ING Direct (USA)
, and would make a "final announcement" after the meeting. The ING Direct deal has faced an unusual level of scrutiny, including several public hearings by the Fed last hear.
Capital One expects to complete ING Direct acquisition during the first quarter, followed by the purchase of
U.S. credit card portfolio which is expected to be completed during the second quarter, could alleviate investor concerns about integration risk and an expected common equity raise of between $750 million and $1.25 billion.
Capital One's shares trade for1.4 times tangible book value, and for just 8.5 times the consensus 2012 earnings estimate of $5.81.
Interested in more on Capital One Financial? See TheStreet Ratings' report card for this stock.
3 Industries and 3 Stocks Riding a 2012 M&A Boom
Written by Philip van Doorn in Jupiter, Fla.
To contact the writer, click here:
To follow the writer on Twitter, go to
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.