The financials have been under siege since the dog days of summer and not without reason, but enough is enough! I believe that much of the bad news is priced into these companies.  Consider the NASDAQ Bank Index outperformed the broader markets over the long term with a performance of 415% during the last 15 years, while the S&P 500 was a solid 230%.  Meanwhile, more recently the NASDAQ Bank Index has been underperforming the broader markets with year-to-date performance at -22%, bucking the S&P 500 at +3%.  Nevertheless, I am still being extremely selective in which companies I choose to nibble at, as there simply is no sense of urgency, at the moment.  And lofty dividends alone should not be enough to entice the value driven investor!  An investor should consider professional guidance and not walk blindly into a stock based on an attractive yield, as principle could …

In my view, many of the dividends paid by banks and thrifts will ultimately be secure, especially if the senior management teams and Boards of Directors seriously review their respective businesses and balance sheets to ensure their credibility and the integrity of its long term strategy.  I expect these management teams to make the tough decisions that they are getting handsomely paid for and to not take the easy way out.

Recall the requirements of a well-capitalized institution are a minimum leverage capital ratio of 5.00%, a minimum Tier I risk-based capital ratio of 6.00%, and a minimum total risk-based capital ratio of 10.00%.  I believe the security of a dividend is not taken lightly by both management teams and shareholders in the mature sectors of financial services.  Many companies in this sector have worked diligently to grow their dividends for more than three decades and some, even longer.

In general, capital …