Jamie Dimon, as an iconic biography describes him, was the "Last Man Standing." JPMorgan Chase & Co.'s bargain buyouts of a busted Bear Stearns and a failed Washington Mutual made the global bank and its CEO the undisputed white-knight victors emerging from the 2008 financial crisis.

But two University of Chicago Booth School of Business economists make an interesting, and very contrary, point in a new research report. Instead of capitalizing on the market fray last year, JPMorgan and its shareholders actually lost $33.6 billion of market value when the Treasury Department bailed out the banking industry.

That seems a hard concept to grasp, considering that the bank had earned $9.4 billion through the first three quarters of 2009. What Luigi Zingales and Pietro Veronisi argue, however, is that by propping up weaker money-center banks, the Treasury reduced what might have been much higher market values for JPMorgan Chase if other giants were to fail.

"By effectively allowing JPM's main competitors who were in trouble to survive," Veronisi said in email, "the Paulson plan may have induced a downward revision of market participants' expectation of JPM's future profitability...and this possible scenario may have decreased the probability of [a] favorable scenario for JPM."

In their study, titled "Paulson's Gift," the two economists examined how direct capital injections affected the market value for the recipient banks, taking into account the losses avoided had any of them fallen into insolvency or bankruptcy in the midst of the credit crunch.

JPMorgan, which received $25 billion in aid (that it has since repaid) turned out to be the "big loser" in terms of lowered value measured by common and preferred stock, plus debt. Conversely, some of the other banks and Wall Street firms came out revitalized. Leading the way was Morgan Stanley, which gained $11 billion in value, while Goldman Sachs and Citigroup gained $8 billion each.

Zingales and Veronisi used complex formulas measuring factors such as the major banks' credit default swap rate history, since CDS rates would reflect a reduced probability of failure via a lower perceived risk on an institution's debt. "We find that the bulk of the value added stems from the banks that were more at risk of a run," the report states (a run here being the pulling back of overnight credit lifelines).

Overall, Zingales and Veronisi's study showed a cumulative $131 billion boost in asset value to the nine institutions that received the initial $125 billion in bailout funds and a net benefit of between $89 billion and $107 billion in new enterprise value, after deducting the estimated $25 to $47 billion in taxpayer expenses.

Zero Tolerance on Builder Loans

Compared to peak levels of activity in the first quarter of 2007, lenders of all sizes have managed to cut down their commercial/land development loan portfolios between 20 and 25 percent, according to third-quarter 2009 figures compiled by FIG Partners in Atlanta.

Yet despite the pruning, FIG estimates that 22 percent of banks still have construction loan concentrations above the suggested regulator guidelines of 100 percent of total risk-weighted capital. Perhaps not surprisingly, the states in which banks have the highest concentrations are the states that have had the most failures in the past year - Georgia, Florida, California and Illinois.

In a recent newsletter, FIG said that it is hearing from bank chief executives and chief financial officers that examiners are essentially taking a "zero tolerance" approach with these banks - even if the loans are still performing - and are "far more adamant about enforcing" the regulatory threshold than they were when the guidelines came out nearly four years ago. FIG says the "battle cry" over construction loan portfolios will only get louder and likely force these banks to either raise more capital or merge with banks that have less construction exposure.

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