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As I see it, 32 commercial banks and thrifts may see the feces hit the fan blades |
| Written by Reggie Middleton | |
| Thursday, 22 May 2008 | |
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I have identified 32 banks that are $@%%. It's really as simple as that. I have been publishing the research that I used to build my investment thesis. Thus far we have:
I am almost prepared to start listing more of my commercial banking shorts, but before I do I want to delve even further into the educational realm so there is no doubt as to why I am as bearish as I am. For those who can't wait to see my ultimate shorts, I will give you the complete list of what I call the "Deep Doo-Doo Banks". These are the banks that are steeped pretty deep in it. Are you ready? Can you handle the pressure? Okay, here we go! Wells Fargo - Popular Inc - SunTrust - KeyCorp - Synovus Financial Corp - Marshall & Ilsley - Associated Banc - First Charter - M&T Bank Corp - Huntington Bancshares - BB&T Corp - JPM Chase - U.S. Bancorp - Bank of America - Capital One - Nara Bancorp - Sandy Spring Bancorp - PNC - Harleysville National - CVB Financial - Glacier Bancorp - First Horizon - National City Corp - WAMU - Countrywide - Regions Financial Corp - Citigroup - Wachovia Corp - Zions Bancorp - TriCo Bancshares - Fifth Third Bancorp - Sovereign Bancorp Now, I already release some of my work on one of the banks, chosen due to paper thin capitalization - along with a different view on leverage. Keep in mind, for the purposes of this blog, I'm just a resourceful individual investor - albeit one that is very lucky to date (this post was before Bear Stearns dropped 98%). Therefore, no one, and I really mean no one, should be taking my opinions on this blog as investment advice. It is not intended as such and should not be percieved as such. Before we focus on which banks I am shorting, let's explore the current banking environment. I aimed my team at banks that have high concentrations in risky products, risky geographic areas and low tangible and regulatory capital. There were a lot to choose from. So, to narrow down the list, I had everybody enter the 12 step program - after reading my tutorials above, of course. 2nd lien products in high LTV states that have rapidly declining housing values proffer the opportunity for 100% losses with no recoveries.
Above is a list of states and the home equity and 2nd lien defaults for said states. For those who don't know, 2nd lien loans (of which include HELOCS, piggy backs, home equity loans, etc.) are 2nd in line when it comes to liquidation rights under foreclosure. If the loan was made with a high LTV (let's say 90% combined LTV, with the first loan made at 85% LTV), in an area that has even a modest (these days, anyway) decline in value of 10% year over year, then you effectively have a 100% loan with not equity. Every dollar after this that the house drops is a permanent loss from the bank's loan. Factor in the costs of deed transfer, mortgage tax, utilities, upkeep, brokers commissions and legal fees (about 7.5%), and the bank now get's nothing, even if it can move at auction. When I say nothing, I mean nothing. Not just an NPA on its books, but absolutely not way to recover any value from the home. I can hear the blog readers now saying, "Well, what are the chances of that happening?". Stay tuned, and we will assuredely find out.
The graph above shows a subsection of my 32 bank Deep Doo-Doo list who sport:
For those that really wondered whether the scenario that I outline above could really take place - well, wonder no more! We have a whole smorgasbord of banks in that position. The key is, which of these bank have loans in the aforementioned areas detailed in the first graph. I know you know that I know the answer to that question. I'm even going to tell you for free, but before we go there let's cover some additional background material. I want you to pay particularly close attention to who is leading the pack in high LTV concentrations. I was short this bank and WaMu since last year, and have since covered both short positions in the single digits are close to it. As a rule, I rarely ride a stock past $10 on the way down because zero is but so far away and the risk/reward ration is rarely justifiable (the two monolines that I have covered in detail are an exception to this rule). In this case, I covered both too early, particularly Countrywide. The moral to the story here is that many of these banks are not too far behind Countrywide, with the largest difference between CFC and them being CFC's piss poor public relations ability. WaMu is right there too, as well as some big name banks with some big name investors behind them. I will end my bank series with a full scale forensic report of my number one short in the sector and I am sure it will shock many of you who like to buy into brand names. In order to determine how likely the aforementioned event is, let's create a metric by which Reggie Middleton measures risk. This metric will be units of risky or non-performing assets as a percentage of statutory equity. This, of course, can be refined by removing goodwill, Bullsh1t, and the various accounting pollutants to plain old economic earnings, but less just start with this. When applying Reggie's Risk Metric to the graphs above, we can identify more banks.
Looking at risk from this perspective, we not only see who has no clothes on when the tide goes out, but also how well (un)endowed they are in addition. Please keep in mind that some loans and banking products are much riskier than others. Due to this, I have culled what I believe to be the riskiest products to short list the banks. We have already addressed 2nd lien loans. There is also construction and development (C&D) loans that are still on the books that are by far, much riskier than the conventional commercial loans - which are risky assets themselves in this environment. An off the cuff, anecdotal assumption would be that 20% of these loans will be in default in many areas, with greater numbers the newer the vintage. For a category such as high rise condos, they are usually 24 month, interest only, 20-30 year amortization. The intent is to have them refinanced into permanent loans upon construction completion, which is difficult for projects such as condos. Construction costs have spiked, supply is up and demand is down. Those banks with high LTV C&D loans (ex. Corus Bank) and any 2nd lien loans over 90 LTV should be high on the short list. One to four family properties are also quite risky, for amateur (and not so amateur, actually) investors bought buildings without a firm (or even loose) understanding of cash flows, cap rates, and rental yields - aided and abetted by the banks which apparently missed out on the cash flow valuation memo as well. Well, those who overshot the predictions of rent rolls, undershot the estimation of expenses, or took out volatile ARM products ended up not only underwater, but with negative cash flow as well. It is much easier to walk away from an investment property than it is to do so from your home. As you can see from the graph below, my assertions seem to be ringing true. The rate of change in delinquencies in these are SKYROCKETING!
I am going to cut this short here, and will continue this series in 24 hours or so. I have quite a bit of information, so the series will be at least 4 or 5 additional parts. I also need to post my homebuilder updates (remember I broke the secret on the industry's secretive JV accounting) and Muni default ->CDS failure connection research as well. So much to do, so little time. I do hope you guys appreciate this, for I don't know where else to find it on the net. As if this disclaimer is necessary: I am short, or in the process of accumulating bearish positions in most if not all of the companies detailed in this article. See you in 24 (or so) on the boombustblog.com.
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Comments (31)
  written by Johnny Lay, May 23, 2008
Man, U are gonna need bigger servers and co-location. Folks are hungry for this. Good job!
 written by Reggie Middleton, May 23, 2008
I'm going to bed now, got to get up in 4 hours. It's funny you mention it, I was just wondering how I can but my colocation costs down
written by Johnny Lay, May 23, 2008
Writing stuff like this aint gonna do it! Start that tip jar dude.
 written by jana madan, May 23, 2008
I can add 2 more to the list, but there is no meat at this time. DSL and FED, both have total exposer in CA.
written by Reggie Middleton, May 23, 2008
Since I am an investor, not an analyst, everything that I go after has to have some meat. I had DSL short early on, but covered to move profits to around. As luck would have it,the market falls as soon as I get the researh done and am in the process of building positions. The banks skyrocketed for two months and wait for me to increase my shorts to fall. Oh, the irony.
As this series continues, I will reveal the shortlist. We narrowed it down to 9, then to 4 then to two.
written by Jarret Pazahanick, May 23, 2008
Reggie
Looks like someone else is reading the blog and "borrowing" so of your good work :-) http://www.marketwatch.com/news/story/hedge-fund-manager-questions-lehman/story.aspx?guid={980A9495-A85B-4C23-AAA4-9478A68DF69E}&dist=hplatest Keep up the great job.
written by Reggie Middleton, May 23, 2008
She is not making a very good case. Lehman took an economic loss for the quarter, and anyone who took just an hour or two to carefully go through their reporting can see it just using a spread sheet or calculator.
written by Silver Bear, May 23, 2008
I am still dumbfounded by the amount of information you are disseminating. Thanks for putting numbers to my hunches. Can't wait for the next installments.
written by JLC, May 24, 2008
Nice job Reggie. Can't wait to see the rest of the series. Hmmmm . . . do I move my corporate accounts out of WFC? I probably should anyway, their service is absolutely dreadful.
written by Klemen Vidic, May 24, 2008
Yes, they have less residential and more commercial real estate loans.
But, if you dig into their 10-Q, you can find out, that their CRE is mainly construction and land. BTW, exellent article.
written by Reggie Middleton, May 24, 2008
For certain places such as inland CA, See this link Sacramento Area Flippers In Trouble
written by Grant Henderson, May 27, 2008
Hi Reg
You got me sitting on the edge of my seat waiting for the follow up, am I missing something, can't seem to find it? Thanks for the great site and making it free (cast your bread on the waters......) It took me a long time to find you and I'm a real seeker. Best wishes from South Africa VandG
written by Reggie Middleton, May 27, 2008
I write them in advance and they pop up every day or so. There are two more on the front page and a the next one may appear today. Thanks for the encouraging words, BTW.
written by Reggie Middleton, May 27, 2008
From CNBC:
U.S. thrifts are being urged to set aside more money for bad mortgage loans after reporting record loan loss provisions totaling $7.6 billion in the first quarter due to the deteriorating American housing market, the Office of Thrift Supervision (OTS) said Tuesday. The savings and loan industry, which includes many mortgage lenders, had loan loss provisions of $5.5 billion in the fourth quarter of 2007 and $1.2 billion in the first quarter of 2007, the OTS said. The OTS, which regulates more than 830 U.S. thrifts, said it encouraged institutions to set aside more loan loss provisions going forward. "I have been urging managers of OTS-regulated thrift institutions to be aggressive in setting aside provisions for expected loan losses," OTS Director John Reich told reporters at a briefing to release the quarterly industry data. "This forceful response to the housing market crisis continues to depress industry earnings, but it also strengthens institutions to withstand future challenges," Reich said. Troubled assets, which include noncurrent loans and repossessed assets, were 2.06 percent of assets in the first three months of this year, up from 1.66 percent in the fourth quarter of 2007, the OTS said. In a sign of the continued housing slump, total mortgage origination volume dipped 20 percent in the first quarter of 2008 from the last three months of 2007, according to regulators. Thrifts posted a net loss of $617 million in the first quarter, an improvement from a loss of $8.75 billion in the fourth quarter of 2007, the agency said.
written by Emmi, May 28, 2008
I notice you have M&T on there. End of last year they acquired Partner's Trust (who had just recently merged with Savings Bank of Utica) and I was wondering what the purpose of that was. Partner's Trust's interest income had not taken a hit from 2006 to 2007 and M&T probably saw them as a way of improving their portfolio.
I have too many accounts with too many of these banks, compelling me to go re-read the FDIC FAQ. Thank god the gov can print money, that's all I can say.
written by Mike Otero, May 28, 2008
New reader here. Regarding the banks, Reggie, I'd appreciate anything you can tell us about Popular's situation. I remember that last August, Citibank sold their 17 branches on the Island to Popular. I guess Citi knew what was coming.
written by Reggie Middleton, May 28, 2008
I will be commenting briefly on most of the banks on the list over the next few posts.
written by Stan Muse, May 29, 2008
Hey Reggie, I am making a great profit on WAMU by buying and selling, at a 1% profit, into any puny mid-day rally the stock tries to muster as it drifts lower and lower.
written by Shabba, May 30, 2008
Great analysis Reggie. It is almost beyond great and into the realm of superb! I'm not being sarcastic at all.
I recognized Wells had massive problems quite awhile ago, I didn't do near the amount of analysis you did. I decided to short the stock before earnings, figuring that they would finally have to fess up. And like you detailed here they BS'd their way through earnings. I did the same thing with Lehman, exact same story with them. What is your sense that they could keep covering this up? It seems like somebody has to blow a whistle eventually, or that the losses will build up to such an extent that a fraction of them have to be recognized. I'm just cautious about shorting these guys again knowing full well they are a bunch of liars and can manipulate their earnings how they please. What do you think about this? Thanks for your time.
 written by Arun Raja, June 05, 2008
Commercial Banks - ET is Suggesting Loan
Reserves Will Need to be Built-Up A Measure of Loan Loss Reserve Adequacy ? We believe the biggest issue confronting the banking industry over the next 12-18 months will continue to be credit deterioration. ? Mortgage delinquencies are at record levels, home equity loan defaults are steadily rising and residential construction and land loan nonperforming assets are skyrocketing for lenders with excess exposure to weakest housing markets in the US. ? In conjunction with a slower economy, we expect the credit problems will spread to the commercial real estate and leverage loan markets in 2008. ? During this time period loan loss adequacy questions will raised by investors and analysts, in our opinion. Bank management teams will often claim loan loss reserves are adequate only having to boost reserves in subsequent quarters. ? As a result, we introduced our a loan loss reserve adequacy test called ET (Eyles Test) in December, 2007, which can be uniformly applied to all banks and thrifts in the US. Our test is based on a proven formula that enabled Fleet Financial to withstand the severe credit crisis that leveled hundreds of banks in the late 1980s and early 1990s. Though managements and investors may quibble with some of the components, the beauty of ET is that it allows investors to compare on an apple-to-apple basis, loan loss reserve adequacy based upon the riskiness of a company's balance sheet. ? To determine ET (for the adequacy of loan loss reserves) investors need to add the following figures together: 0.25% of total mortgage and home equity loans + annualized credit card charge-offs + 1.00% of the remaining loan portfolio + nonaccrual loans and loans 90+ past due but still accruing. ? The resultant figure will give you a company's ET. The ET should be compared to the company's existing loan loss reserve and the difference, assuming the ET is greater than the company's existing loan loss reserve, should be subtracted from tangible book value (on an after-tax basis.) If the company's loan loss reserve exceeds ET, the excess should be added back to tangible book value (on an after-tax basis.) ? The attached exhibit details the 1Q 08 ET for the top 50 commercial banks as ranked by total assets. The institutions at the top of the list are at a higher risk from a capital perspective than those banks near the bottom of the list, in our opinion. Priced as of prior trading day's market close, EST (unless otherwise noted). 2 Details We believe the biggest issue confronting the banking industry over the next 12-18 months will continue to be credit deterioration. Loan loss reserve adequacy will become a "hot" investment topic during this time period. Our ET has been designed to determine which companies are conservatively reserved and therefore, are less vulnerable to an earnings shock. We believe as credit deteriorates further over the next 12-18 months, some companies may short change the loan loss reserves suggesting their book values are over stated, in our opinion. ET shows which companies may be short changing its reserves and are most vulnerable to an earnings shock that would result from a build-up in its loan loss reserve. Commercial Banks - ET is Suggesting Loan Reserves Will Need to be Built-Up June 2, 2008 Top 50 Commercial Banks By Asset Size Eyles Test Shortfall As % of Tangible Book Value 2008Q1 2007Q4 2007Q3 2007Q3 2007Q1 2006Y Company Name Ticker (%) (%) (%) (%) (%) (%) 1 First BanCorp. FBP -33.20 -31.00 -29.70 -25.90 -20.10 -24.50 2 UCBH Holdings, Inc. UCBH -19.70 -11.70 -5.70 -4.50 -4.70 -2.20 3 National City Corporation NCC -17.60 -18.30 -15.70 -12.40 -10.40 -7.80 4 Citizens Republic Bancorp, Inc. CRBC -14.80 -10.20 -4.70 -0.90 0.30 1.60 5 Popular, Inc. BPOP -14.70 -14.90 -18.40 -16.20 -14.10 -16.10 6 Fifth Third Bancorp FITB -14.10 -11.70 -7.30 -5.30 -4.20 -4.30 7 SunTrust Banks, Inc. STI -13.20 -10.70 -8.40 -7.40 -6.00 -5.00 8 Colonial BancGroup, Inc. CNB -13.00 -2.50 -2.20 -0.80 0.40 1.10 9 Wachovia Corporation WB -13.00 -9.60 -6.60 -4.40 -3.10 -2.50 10 Sterling Financial Corporation STSA -11.80 -7.90 -3.00 -0.40 0.30 1.00 11 South Financial Group, Inc. TSFG -11.00 -3.90 -2.10 -0.60 -1.30 -1.20 12 First Horizon National Corp FHN -9.90 -6.20 -3.70 -4.70 -1.70 -2.20 13 Whitney Holding Corporation WTNY -8.90 -8.00 -5.40 -4.00 -3.70 -4.10 14 Marshall & Ilsley Corporation MI -8.90 -7.30 -4.60 -4.30 NA -3.00 15 Bank of New York Mellon Corporation BK -8.30 -6.60 -2.10 -1.40 -1.50 -1.50 16 Bank of America Corporation BAC -7.50 -7.70 -5.30 -4.70 -4.70 -14.40 17 Fulton Financial Corporation FULT -7.30 -6.60 -5.70 -4.00 -2.50 -2.90 18 Zions Bancorporation ZION -7.10 -4.90 -3.50 -1.60 -1.60 -1.20 19 Regions Financial Corporation RF -6.90 -4.00 -3.80 -2.80 -1.40 -0.70 20 KeyCorp KEY -6.90 -4.00 -3.70 -1.30 -0.60 0.10 21 Comerica Incorporated CMA -6.40 -4.80 -3.70 -3.00 -2.40 -2.40 22 Wells Fargo & Company WFC -6.20 -5.70 -5.60 -4.60 -4.50 -6.70 23 TCF Financial Corporation TCB -5.70 -4.50 -4.00 -4.70 -5.10 -4.70 24 Associated Banc-Corp ASBC -5.70 -4.00 -3.30 -4.70 -3.20 -2.80 25 BB&T Corporation BBT -5.60 -3.60 -2.80 -1.60 -1.10 -1.60 26 Huntington Bancshares Incorporated HBAN -5.50 -4.60 -4.70 -4.50 -3.60 -3.30 27 Susquehanna Bancshares, Inc. SUSQ -5.30 -4.20 -2.60 -2.30 -1.90 -2.40 28 U.S. Bancorp USB -4.90 -4.10 -2.70 -1.80 -1.70 -4.90 29 PNC Financial Services Group, Inc. PNC -4.20 -3.10 -1.50 -0.80 -0.30 -0.10 30 BOK Financial Corporation BOKF -3.40 -2.90 -1.40 -1.90 -1.60 -0.80 31 Wilmington Trust Corporation WL -3.20 -3.00 -3.80 -3.10 -0.50 -1.50 32 Valley National Bancorp VLY -2.80 -2.70 -2.40 -2.40 -2.10 -1.70 33 Citigroup Inc. C -2.10 -2.50 -3.10 -2.60 -3.30 -11.00 34 East West Bancorp, Inc. EWBC -2.10 -4.70 -3.20 -1.90 -1.20 -1.50 35 State Street Corporation STT -2.00 -1.90 -1.30 -1.30 -1.10 -0.90 36 City National Corporation CYN -1.90 0.30 2.40 3.10 3.10 3.00 37 Cullen/Frost Bankers, Inc. CFR -1.90 -1.40 -0.80 -2.60 -2.30 -2.90 38 JPMorgan Chase & Co. JPM -1.80 -2.70 -2.20 -1.90 -2.10 -8.90 39 M&T Bank Corporation MTB -1.70 -0.90 -1.80 -0.20 0.60 1.80 40 Webster Financial Corporation WBS -1.50 0.80 -0.20 0.50 1.20 1.50 41 Commerce Bancshares, Inc. CBSH -1.50 -1.20 -1.20 -1.70 -0.70 -3.00 42 Capital One Financial Corporation COF -1.00 -0.60 0.60 0.70 -1.80 -14.40 43 Northern Trust Corporation NTRS -1.00 -0.90 -1.10 -1.10 -0.90 -1.30 44 UnionBanCal Corporation UB -0.10 0.50 0.00 0.50 0.30 0.30 45 First Citizens BancShares, Inc. FCNCA -0.10 1.10 0.60 0.70 1.30 0.60 46 BancorpSouth, Inc. BXS 0.80 1.20 0.90 1.40 1.10 1.20 47 International Bancshares Corporation IBOC 1.40 -4.10 1.80 2.70 0.80 -0.80 48 Synovus Financial Corp. SNV 2.0 -5.80 1.70 1.40 -1.50 -1.40 49 Bank of Hawaii Corporation BOH 4.40 3.60 4.30 4.30 4.30 4.10 50 W Holding Company, Inc. WHI NA NA NA NA -12.80 -11.40 Note: Data represents the tax-effected per share shortfall from current loan loss reserves as a percentage of tangible book value Source: SNL Interactive
written by Arun Raja, June 05, 2008
Reggie,
Is there a way to attach a spreadsheet here? The html post did not come out well. Top 50 Commercial Banks By Asset Size Eyles Test Shortfall As % of Tangible Book Value 2008Q1 2007Q4 2007Q3 2007Q3 2007Q1 2006Y Company Name Ticker (%) (%) (%) (%) (%) (%) 1 First BanCorp. FBP (33.2) (31.0) (29.7) (25.9) (20.1) (24.5) 2 UCBH Holdings, Inc. UCBH (19.7) (11.7) (5.7) (4.5) (4.7) (2.2) 3 National City Corporation NCC (17.6) (18.3) (15.7) (12.4) (10.4) (7.  4 Citizens Republic Bancorp, Inc. CRBC (14. (10.2) (4.7) (0.9) 0.3 1.6 5 Popular, Inc. BPOP (14.7) (14.9) (18.4) (16.2) (14.1) (16.1) 6 Fifth Third Bancorp FITB (14.1) (11.7) (7.3) (5.3) (4.2) (4.3) 7 SunTrust Banks, Inc. STI (13.2) (10.7) (8.4) (7.4) (6.0) (5.0) 8 Colonial BancGroup, Inc. CNB (13.0) (2.5) (2.2)(0. 0.4 1.1 9 Wachovia Corporation WB (13.0) (9.6) (6.6) (4.4) (3.1) (2.5) 10 Sterling Financial Corporation STSA (11. (7.9) (3.0) (0.4) 0.3 1.0 11 South Financial Group, Inc. TSFG (11.0) (3.9) (2.1) (0.6) (1.3) (1.2) 12 First Horizon National Corp FHN (9.9) (6.2) (3.7) (4.7) (1.7) (2.2) 13 Whitney Holding Corporation WTNY (8.9) (8.0) (5.4) (4.0) (3.7) (4.1) 14 Marshall & Ilsley Corporation MI (8.9) (7.3) (4.6) (4.3) NA (3.0) 15 Bank of New York Mellon Corporation BK (8.3) (6.6) (2.1) (1.4) (1.5) (1.5) 16 Bank of America Corporation BAC (7.5) (7.7) (5.3) (4.7) (4.7) (14.4) 17 Fulton Financial Corporation FULT (7.3) (6.6) (5.7) (4.0) (2.5) (2.9) 18 Zions Bancorporation ZION (7.1) (4.9) (3.5) (1.6) (1.6) (1.2) 19 Regions Financial Corporation RF (6.9) (4.0) (3. (2. (1.4) (0.7) 20 KeyCorp KEY (6.9) (4.0) (3.7) (1.3) (0.6) 0.1 21 Comerica Incorporated CMA (6.4) (4. (3.7) (3.0) (2.4) (2.4) 22 Wells Fargo & Company WFC (6.2) (5.7) (5.6) (4.6) (4.5) (6.7) 23 TCF Financial Corporation TCB (5.7) (4.5) (4.0) (4.7) (5.1) (4.7) 24 Associated Banc-Corp ASBC (5.7) (4.0) (3.3) (4.7) (3.2) (2. 25 BB&T Corporation BBT (5.6) (3.6) (2. (1.6) (1.1) (1.6) 26 Huntington Bancshares Incorporated HBAN (5.5) (4.6) (4.7) (4.5) (3.6) (3.3) 27 Susquehanna Bancshares, Inc. SUSQ (5.3) (4.2) (2.6) (2.3) (1.9) (2.4) 28 U.S. Bancorp USB (4.9) (4.1) (2.7) (1. (1.7) (4.9) 29 PNC Financial Services Group, Inc. PNC (4.2) (3.1) (1.5) (0. (0.3) (0.1) 30 BOK Financial Corporation BOKF (3.4) (2.9) (1.4) (1.9) (1.6) (0. 31 Wilmington Trust Corporation WL (3.2) (3.0) (3. (3.1) (0.5) (1.5) 32 Valley National Bancorp VLY (2. (2.7) (2.4) (2.4) (2.1) (1.7) 33 Citigroup Inc. C (2.1) (2.5) (3.1) (2.6) (3.3) (11.0) 34 East West Bancorp, Inc. EWBC (2.1) (4.7) (3.2) (1.9) (1.2) (1.5) 35 State Street Corporation STT (2.0) (1.9) (1.3) (1.3) (1.1) (0.9) 36 City National Corporation CYN (1.9) 0.3 2.4 3.1 3.1 3.0 37 Cullen/Frost Bankers, Inc. CFR (1.9) (1.4) (0. (2.6) (2.3) (2.9) 38 JPMorgan Chase & Co. JPM (1. (2.7) (2.2) (1.9) (2.1) (8.9) 39 M&T Bank Corporation MTB (1.7) (0.9) (1. (0.2) 0.6 1.8 40 Webster Financial Corporation WBS (1.5) 0.8 (0.2) 0.5 1.2 1.5 41 Commerce Bancshares, Inc. CBSH (1.5) (1.2) (1.2) (1.7) (0.7) (3.0) 42 Capital One Financial Corporation COF (1.0) (0.6) 0.6 0.7 (1. (14.4) 43 Northern Trust Corporation NTRS (1.0) (0.9) (1.1) (1.1) (0.9) (1.3) 44 UnionBanCal Corporation UB (0.1) 0.5 (0.0) 0.5 0.3 0.3 45 First Citizens BancShares, Inc. FCNCA (0.1) 1.1 0.6 0.7 1.3 0.6 46 BancorpSouth, Inc. BXS 0.8 1.2 0.9 1.4 1.1 1.2 47 International Bancshares Corporation IBOC 1.4 (4.1) 1.8 2.7 0.8 (0. 48 Synovus Financial Corp. SNV 2.0 (5. 1.7 1.4 (1.5) (1.4) 49 Bank of Hawaii Corporation BOH 4.4 3.6 4.3 4.3 4.3 4.1 50 W Holding Company, Inc. WHI NA NA NA NA (12. (11.4) Note: Data represents the tax-effected per share shortfall from current loan loss reserves as a percentage of tangible book value Source: SNL Interactive
written by Reggie Middleton, June 06, 2008
Create a personal web site and upload the file to you file repository page. You can also cut and past out of Excel easily, just make sure the table width is 680 px or less. You can use the table icon in the toolbar in IE or right click the table in Mozilla to accomplish this - table properties command. Once you have uploaded the spreadsheet or create an html table, just link to it from here. This and example of my personal file repository page: http://boombustblog.com/compon.../pageid,4/
written by Arun Raja, June 06, 2008
RBC Bank Shorts based on Eyles Test. Now in Excel format.
http://boombustblog.com/images/stories/bkshort-eyles_test.xls
written by Reggie Middleton, June 06, 2008
Good job. I actually had this test run against the Texas ratio and my own homegrown brew. Very similar results. Now that we know NCC received an MOU (don't you hate this alphabet soup), I have simply used them as a benchmark and am about 80% confident I know who else recieved those MOUs. I will post my findings some time this weekend.
written by Brett Fromme, June 12, 2008
Reggie, kudos on your great analysis.
 I have been short the financials for quite a while. Before I discovered your blog I sometimes felt like I was really out on a limb. I was wondering if the order of your list of 32 banks has any significance? Are they ordered from weakest to strongest or using some other metric? TIA.
written by john english, June 13, 2008 Thanks for the very thorough analysis of WFC.I presume that most,if not all, of the home equity loans are non recourse.
written by Reggie Middleton, June 13, 2008
Technically they are recourse, but effectively they are non-recourse 'cause the bank is not going to see most of that high LTV money again. They will have to attach judgements on other assets if they can.
written by Derek Syphrett, June 14, 2008
Reggie - I have trouble reading this HTML page... no problem with the rest of your site. Can someone on your team check the code out... the text goes way beyond the right margin and is not visible.
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