Who Hasn't Gotten a Bailout?
Some banks are still waiting to see if the government is going to inject capital.
The Capital Purchase Program (CPP) of the Troubled Asset Relief Program, (TARP) closed on Nov. 14 to all public companies wishing to apply for the government bailout. We have heard from most of our coverage companies; 53 took it, seven said no, although six said they applied and have not received word; and eight have not said anything about their intentions. With news coming in every day, it is likely that as soon as you read this, it will be somewhat out of date. But we wanted to take a look at who has not gotten CPP funding, and what we and the market are suggesting is going to happen to these players.
Thanks, But No Thanks
We cover a handful of companies that simply said thanks, but no thanks when it came to applying for the government capital injection. All have strong capital bases already. Their fundamental results have largely held up so far in this downturn. Two of them are in Texas ( Cullen/Frost (CFR) and Prosperity (PRSP)), where housing prices did not seem to reach bubble proportions and high oil prices kept the economy buzzing until recently. This outlook is changing, and we are starting to see more weakness in this state. Still, these guys are doing well and are well-positioned to take the upcoming credit problems. Commercially focused and highly conservative, we believe these banks are likely long-term survivors. However, our view appears to be in line with the market, and bargains among these types of names are basically nonexistent.
Jaime Peters does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.