Friday, 23 May 2008 01:00

As I see it, 32 commercial banks and thrifts may see the feces hit the fan blades

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:

  1. Intro: The great housing bull run – creation of asset bubble, Declining lending standards, lax underwriting activities increased the bubble – A comparison with the same during the S&L crisis
  2. Securitization – dissimilarity between the S&L and the Subprime Mortgage crises, The bursting of housing bubble – declining home prices and rising foreclosure
  3. Counterparty risk analyses – counterparty failure will open up another Pandora’s box
  4. The consumer finance sector risk is woefully unrecognized, and the US Federal reserve to the rescue
  5. Municipal bond market and the securitization crisis – part I
  6. An overview of my personal Regional Bank short prospects Part I: PNC Bank - risky loans skating on razor thin capital, PNC addendum Posts One and Two
  7. Reggie Middleton says don't believe Paulson: S&L crisis 2.0, bank failure redux
  8. More on the banking backdrop, we've never had so many loans!

 

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.

image040.png

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.

image063.png

The graph above shows a subsection of my 32 bank Deep Doo-Doo list who sport:

  1. HELOC portfolio exposures with high average LTVs that increase the risk of the whole portfolio
  2. HELOC portfolio exposures with full 100% LTVs or close to it consisting of a very large portion of the total portfolio
  3. HELOC exposures with very high, but not quite 90% LTVs consisting of a large portion of the total portfolio

 

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.

image006.png

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!

image005.png

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.

 

 

Last modified on Wednesday, 06 July 2011 04:16

55 comments

  • Comment Link âó¯ìüë À¦ó Ì- Sunday, 01 December 2013 18:35 posted by âó¯ìüë À¦ó Ì-

    As I see it, 32 commercial banks and thrifts may see the feces hit the fan blades
    âó¯ìüë À¦ó Ïï¤ http://www.hicotronics.com/Moncler121-2.asp?Moncler121-2id=1048
    âó¯ìüë 2014 ˬ http://www.ruizleather.com/Moncler121-5.asp?Moncler121-5id=894
    âó¯ìüë tarn http://www.iupat-dc6.org/Moncler121-3.asp?Moncler121-3id=271
    âó¯ìüë À¦ó ntralkyinboards.com/Moncler121-1.asp?Moncler121-1id=415
    âó¯ìüë âó¯ìü http://www.centralkyinboards.com/Moncler121-1.asp?Moncler121-1id=433
    âó¯ìüë À¦ó ¯êüËó° '* http://www.centralkyinboards.com/Moncler121-1.asp?Moncler121-1id=976
    âó¯ìüë -ä http://www.centralkyinboards.com/Moncler121-1.asp?Moncler121-1id=294
    âó¯ìüë À¦ó Öí° http://www.mrtuxedo.com/Moncler121-4.asp?Moncler121-4id=474
    âó¯ìüë À¦ó s' http://www.iupat-dc6.org/Moncler121-3.asp?Moncler121-3id=517
    âó¯ìüë ܹÈó http://www.hicotronics.com/Moncler121-2.asp?Moncler121-2id=1308
    âó¯ìüë Õé´ó http://www.hicotronics.com/Moncler121-2.asp?Moncler121-2id=251
    âó¯ìüë À¦ó áóº 2013 http://www.iupat-dc6.org/Moncler121-3.asp?Moncler121-3id=612
    âó¯ìüë À¦ó http://www.centralkyinboards.com/Moncler121-1.asp?Moncler121-1id=1072
    âó¯ìüë 2013 % áóº http://www.mrtuxedo.com/Moncler121-4.asp?Moncler121-4id=372
    âó¯ìüë À¦ó ewB http://www.iupat-dc6.org/Moncler121-3.asp?Moncler121-3id=230
    âó¯ìüë q¬ Rq http://www.hicotronics.com/Moncler121-2.asp?Moncler121-2id=810
    âó¯ìüë ÎK http://www.hicotronics.com/Moncler121-2.asp?Moncler121-2id=57
    âó¯ìüë «é³ëà http://www.iupat-dc6.org/Moncler121-3.asp?Moncler121-3id=813
    âó¯ìüë À¦ó arc http://www.iupat-dc6.org/Moncler121-3.asp?Moncler121-3id=290
    âó¯ìüë À¦ó *]TF http://www.ruizleather.com/Moncler121-5.asp?Moncler121-5id=544
    âó¯ìüë À¦ó Ì- http://www.centralkyinboards.com/Moncler121-1.asp?Moncler121-1id=727

    Report
  • Comment Link http://www.e-mondo.org/beats-by-dre-overear-c-73.html?page=3sort=20a Sunday, 01 December 2013 18:06 posted by http://www.e-mondo.org/beats-by-dre-overear-c-73.html?page=3sort=20a

    As I see it, 32 commercial banks and thrifts may see the feces hit the fan blades
    http://www.e-mondo.org/specials.html?page=11 http://www.e-mondo.org/specials.html?page=11
    http://www.kantei.go.jp/
    ブタ http://www.kantei.go.jp/
    uggs for kids http://www.juupstore.pl/js/norge.html
    UGGS OSLO http://www.juupstore.pl/js/norge.html
    http://www.e-mondo.org/beats-by-dre-overear-c-73.html?page=3&sort=20a http://www.e-mondo.org/beats-by-dre-overear-c-73.html?page=3&sort=20a

    Report
  • Comment Link nqycsfjbyy Sunday, 01 December 2013 17:43 posted by nqycsfjbyy

    As I see it, 32 commercial banks and thrifts may see the feces hit the fan blades
    anqycsfjbyy
    [url=http://www.g7wt85d0m11odf37w3e9d29398fn3fvos.org/]unqycsfjbyy[/url]
    nqycsfjbyy http://www.g7wt85d0m11odf37w3e9d29398fn3fvos.org/

    Report
  • Comment Link @podman99 Sunday, 01 December 2013 17:41 posted by @podman99

    I buy enjoyment through, cause I ran across just what exactly I was taking a look regarding. You've was over this Four morning long seek out! Goodness Thanks a lot dude. Use a wonderful evening. Bye

    Report
  • Comment Link Reggie Middleton Sunday, 15 June 2008 02:55 posted by Reggie Middleton

    I'm using mozilla and cannot replicate the problem. Try increasing the resolution of your screen to see if that fixes it.

    Report
  • Comment Link Derek Syphrett Saturday, 14 June 2008 23:32 posted by Derek Syphrett

    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.

    Report
  • Comment Link Reggie Middleton Friday, 13 June 2008 02:08 posted by Reggie Middleton

    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.

    Report
  • Comment Link john english Friday, 13 June 2008 01:44 posted by john english

    :)Thanks for the very thorough analysis of WFC.I presume that most,if not all,
    of the home equity loans are non recourse.

    Report
  • Comment Link Reggie Middleton Thursday, 12 June 2008 15:22 posted by Reggie Middleton

    Thanks, and the banks are in no particular order.

    Report
  • Comment Link Brett Fromme Thursday, 12 June 2008 12:55 posted by Brett Fromme

    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.

    Report
  • Comment Link Reggie Middleton Friday, 06 June 2008 18:45 posted by Reggie Middleton

    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.

    Report
  • Comment Link Arun Raja Friday, 06 June 2008 18:40 posted by Arun Raja

    [url]http://boombustblog.com/images/stories/bkshort-eyles_test.xls[/url]

    Report
  • Comment Link Arun Raja Friday, 06 June 2008 18:39 posted by Arun Raja

    RBC Bank Shorts based on Eyles Test. Now in Excel format.

    http://boombustblog.com/images/stories/bkshort-eyles_test.xls

    Report
  • Comment Link Reggie Middleton Friday, 06 June 2008 05:49 posted by Reggie Middleton

    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/component/option,com_uhp2/Itemid,60/task,viewpage/user_id,62/pageid,4/

    Report
  • Comment Link Arun Raja Friday, 06 June 2008 00:04 posted by Arun Raja

    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) (7.8)
    4 Citizens Republic Bancorp, Inc. CRBC (14.8) (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)(0.8) 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 (11.8) (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) (3.8) (2.8) (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) (4.8) (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) (2.8)
    25 BB&T Corporation BBT (5.6) (3.6) (2.8) (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) (1.8) (1.7) (4.9)
    29 PNC Financial Services Group, Inc. PNC (4.2) (3.1) (1.5) (0.8) (0.3) (0.1)
    30 BOK Financial Corporation BOKF (3.4) (2.9) (1.4) (1.9) (1.6) (0.8)
    31 Wilmington Trust Corporation WL (3.2) (3.0) (3.8) (3.1) (0.5) (1.5)
    32 Valley National Bancorp VLY (2.8) (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) (0.8) (2.6) (2.3) (2.9)
    38 JPMorgan Chase & Co. JPM (1.8) (2.7) (2.2) (1.9) (2.1) (8.9)
    39 M&T Bank Corporation MTB (1.7) (0.9) (1.8) (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 (1.8) (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 (0.8)
    48 Synovus Financial Corp. SNV 2.0 (5.8) 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 (12.8) (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

    Report
  • Comment Link Arun Raja Friday, 06 June 2008 00:02 posted by Arun Raja

    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



















    Report
  • Comment Link Shabba Friday, 30 May 2008 18:30 posted by Shabba

    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.

    Report
  • Comment Link Stan Muse Thursday, 29 May 2008 09:04 posted by Stan Muse

    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.

    Report
  • Comment Link Reggie Middleton Thursday, 29 May 2008 00:32 posted by Reggie Middleton

    I will be commenting briefly on most of the banks on the list over the next few posts.

    Report
  • Comment Link Mike Otero Wednesday, 28 May 2008 15:58 posted by Mike Otero

    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.

    Report
Login to post comments