At the FHA, it’s a case of ‘On the one hand…’
Posted on November 13, 2009 at 7:18 amThe bad news: The reserves at the Federal Housing Administration, which insures lenders against mortgage losses, are running below their mandated levels.
The encouraging news: More recent mortgages under the FHA umbrella are showing dramatically lower delinquency rates.
FHA’s recent books-of-business continue to experience elevated levels of stress due to house price declines, income loss and climbing unemployment, according to HUD’s report. For example, the ‘08 year of single-family insurance — representing 15.7% of total insurance — saw a 12.13% seriously delinquent rate as of the latest actuarial study. But the ‘07 year of insurance — representing only 5.7% of total insurance — saw an 18.53% serious delinquency rate.
The ‘09 year of insurance performed relatively well as of the most recent data, experiencing only 1.6% serious delinquencies although the loans insured in fiscal year 2009 account for more than 31% of all loans insured by FHA.
permalink | Comment on this post
Another steady retreat from a regional bank
Posted on October 27, 2009 at 10:18 am
Similar to Green Bankshares, Mississippi-based Cadence Financial is flushing out of its system a bunch of soured Middle Tennessee real estate loans. Cadence’s Sept. 30 exposure to Nashville’s development scene totaled $122 million, down 15 percent from June 30 – versus Cadence’s companwide shrinkage of 3 percent – and a whopping 38 percent from the end of 2008.
permalink | Comment on this post
Why bank losses are with us for at least two more years
Posted on at 8:16 am
Assume for a second that comparing the current banking climate to that of the Great Depression is a useful exercise. Then look at the first chart linked here and begin to worry again about banks chargeoffs and capital levels, which look like they’ll be elevated until at least 2013.
permalink | Comment on this post
It’s not good to be called out by Dick Bove these days
Posted on at 7:31 am
That’s something investors in SunTrust and Fifth Third, Greater Nashville’s third- and fifth-largest banks, came to find out firsthand Monday, when Bove said their banks aren’t valued appropriately given the loan losses they still need to absorb. Other large regional banks active here shared in the misery, though their trading volumes were more in line with normal days.
permalink | Comment on this post
A paragraph Pinnacle doesn’t want associated with its earnings
Posted on October 19, 2009 at 1:47 pmSoutheast powerhouse BB&T today reported earnings that beat estimates, but Tiernan Ray at Barron’s says there are plenty of clouds still in the sky.
What’s troubling is that the company’s core business of writing new loans continues to slip even as its portfolio of existing loans deteriorates further. Fees on plain old deposits are just about the only thing to smile at, and even that is small comfort.
We’ll see tomorrow afternoon what comforts Pinnacle CEO Terry Turner has for his shareholders. Analysts expect the bank to post a loss of 9 cents per share.
permalink | Comment on this post
Some advice from your friendly neighborhood bank regulator
Posted on October 16, 2009 at 7:23 am
Sheila Bair and her team are ready to help banks tackle the looming CRE crunch.
Prudent loan workouts are often in the best interest of financial institutions and borrowers, particularly during difficult economic circumstances and constrained credit availability. This guidance reflects that reality, and supports prudent and pragmatic credit and business decision-making within the framework of financial accuracy, transparency, and timely loss recognition.
permalink | Comment on this post
JP Morgan’s mortgage warning
Posted on October 15, 2009 at 7:54 amDespite posting a third-quarter profit of $3.6 billion — more than six times the year-ago number — JP Morgan Chase says its loan losses are still rising and affecting even mortgages that were thought to be of high quality. Keep in mind that just about everyone in the know agrees that JPM is the cream of the crop.
permalink | Comment on this post
More kitchen-sink quarters for banks?
Posted on October 12, 2009 at 7:36 amBanks of all stripes were assumed to have hit bottom in the second quarter, but regulators and analysts alike expect to see barrels of red ink in the upcoming earnings season — and perhaps beyond — as loan losses continue to mount.
“”When I ask banks about their commercial real-estate exposure, they all say the same thing — that they don’t have many major problems. Then you read the Fed report and it’s completely different. I don’t know which to believe.”
permalink | Comment on this post
We’re almost ready to put a price tag on the toxic stuff
Posted on October 5, 2009 at 10:38 am
In the long-ago days before TARP, there was talk of PPIP, a plan to use government cash to clear the worst of the bad assets off banks’ books. More than a year later, the pieces are in place for investment firms to pool some newly raised capital with federal money and begin buying mortgage-backed securities.
permalink | Comment on this post
Another banking bailout coming?
Posted on September 28, 2009 at 6:39 amThis time, smaller banks who were deemed too weak to get TARP cash — remember how that program was first pitched as ‘good money for good banks’ — may be given government capital. One potentially critical catch: They may have to raise private money to match the federal funds.
permalink | Comment on this post
Making the case for Synovus
Posted on September 23, 2009 at 7:13 amHedge fund manager Tom Brown says the parent of The Bank of Nashville is just his kind of stock, especially after the recent capital raise.
But the company’s outlook isn’t nearly as bleak as the market seems to think. In the runup to an equity offering last week (about more of which in a minute) the company made it pretty clear that it’s in the process of getting its credit issues under control, and that its underlying profitability is strong. In particular Synovus says that its ongoing program of aggressive problem loan disposition is on track, and that the run-rate on new non-performers continues to improve. Meanwhile, pre-tax, pre-credit cost earnings continue to rise.
Shares of Synovus (Ticker: SNV) have traded either side of $4 for most of the past two months.
permalink | Comment on this post
Oh. The. Irony.
Posted on September 22, 2009 at 10:49 amStephen Labaton at The New York Times says regulators are seriously considering turning to bank loans as a means of replenishing the FDIC’s reserve fund.
“Borrowing from healthy banks, instead of the Treasury, has the advantage of keeping this in the family,” said Karen M. Thomas, executive vice president of government relations at the Independent Community Bankers of America, a trade group representing about 5,000 banks. “It is much better for perceptions than having the fund borrow from somewhere else.”
permalink | Comment on this post
File under: ‘Overly optimistic bankers’
Posted on September 21, 2009 at 7:54 amThe Lake Wobegon effect was in full effect at last week’s Barclays investor conference, where bankers of many stripes proclaimed that their commercial real estate portfolios will outperform the broader market. But as Michael Corkery of the Journal points out, that market likely has other ideas.
For the most part, banks have been able to contain commercial-real-estate losses by extending debt when it has matured so as long as the property owner can make interest payments. But that is likely going to get harder as rents decline, leaving the borrowers with less cash.
permalink | Comment on this post
The point of new normal
Posted on September 17, 2009 at 1:47 pmThe Fed is apparently putting its magnifying glass to banks’ commercial real estate portfolios — you know, because if it finds problems now, it can fix them before they do real damage.
SEE ALSO: The fading prospects for financial regulatory reform
permalink | Comment on this post
Fifth Third wants to buy troubled banks
Posted on September 16, 2009 at 2:59 pmKevin Kabat, CEO of the Nashville area’s sixth-largest bank, told an investor conference in New York his team is scouting for potential acquisitions of sinking banks, deals that would be backed by the Federal Deposit Insurance Corp.
Recent Comments
In our good state a select few run the place, 20 yrs ago and today....
Southernindie…Unfortunat ely you have suffered a dibilitating...
And…Karl (Marx) Dean is spending one billion dollars...
Someone explain the difference between short stay and observation...
Watching the Chairman of Starwood Hotels yesterday on CNBC...
Funny how the Union’s feel about taxes. They complained about their...
Where is it?
An absolutely ugly structure, which I have always thought did not take...
Too bad that ATT changed the look of the building so that it no longer...
Yeah, well, look at the TN Legislature of good ol’ boys and the...
As long as the red rules, we will be far behind other states. The GOP does...
Nissan CEO Carlos Ghosn: I don’t know what...