Didn’t we just tell you this?
Posted on November 20, 2009 at 12:59 pmFor the second Friday in a row, Synovus Financial — the parent of The Bank of Nashville — has come out and told investors it has enough capital to weather the economic storm.
“While we do not believe our credit losses will reach the SCAP ‘More Adverse’ scenario levels, which would imply credit losses of almost $3.3 billion between January 1, 2009 and December 31, 2010, we believe that we have the capital and earnings capacity that would be needed under that scenario. We are pleased with our current core deposit trends as we continue to increase the core deposit funding percentage of our loan portfolio.”
SEE ALSO: Tom Brown says the stock can quintuple in two years.
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Preliminary Q3 bank checkup: Better, but symptoms persist
Posted on November 6, 2009 at 8:10 amChris Whalen says it looks like banks were no more stressed in the third quarter than in Q2. But they are by no means relaxed yet.
Since only the 19 Stress Text banks were really under pressure to window dress Q3 results for compliance purposes with the Fed’s SCAP stress tests, the inference we draw is that the rate of change in terms of stress throughout the industry was likewise more moderate in Q3.
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Stress tests, part deux?
Posted on June 9, 2009 at 7:46 amA Congressional oversight panel says regulators may need to run another round of tests on the country’s largest banks because some of their assumptions about the economic situation last time by were too conservative.
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SunTrust speeds up capital raise
Posted on June 1, 2009 at 7:54 amThe third-largest bank in Nashville (Ticker: STI) says it will raise more than $1 billion in equity by selling common stock and another $300 million by dumping some investments. Throw in the buyback of some hybrid securities and the company says it’s on track to wrap up the plan that was born from the government’s stress tests.
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Regions to raise $1.25B
Posted on May 20, 2009 at 8:33 am
The biggest bank in Middle Tennessee will sell $1 billion in common stock and $250 million in preferred shares that will convert to common by the end of 2010 at the latest. The move comes two weeks after the government’s stress test called on Regions (Ticker: RF) to find $2.5 billion in new capital and two days after Moody’s cut the bank’s credit rating with the following commentary.
Although Regions entered this period with relatively sound capital ratios — at March 31, 2009, Tier 1 risk-based was 10.41% and Moody’s adjusted tangible common equity (TCE) ratio was 7.77% - Moody’s believes Regions’ capital position is likely to be increasingly challenged by the substantial credit costs it faces.
Moody’s negative outlook on Regions considers the possibility that in a more pronounced economic downturn than is currently expected, the company’s performance might be negatively impacted, not only from asset quality deterioration, but also from pressure on businesses dependent on the level of asset prices, such as trust and investment management. That could weaken earnings and add to the downward pressure on Regions’ capital base.
SEE ALSO: If the capital-raising plan doesn’t work, there’s always the ‘For sale’ sign option.
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Stress testing the rest of the banking sector
Posted on May 19, 2009 at 7:52 amRunning the scenarios used by the Fed during its recent examination the nation’s 19 largest banks, the Wall Street Journal finds that many smaller banks would need new capital. A good number of Tennessee’s financial institutions are at the outer reaches of loan losses based on these tests.
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BB&T moves to pay back TARP
Posted on May 11, 2009 at 8:16 amThe Carolina-based bank, which is the Nashville area’s 13th-largest deposit-taker and the anchor tenant in The Gulch’s Terrazzo tower, will raise $1.5 billion and cut its dividend.
“We have a long and proud history of paying dividends and understand how important the dividend is to our shareholders, so this decision to temporarily reduce the dividend was extremely difficult for the board and, for me personally, it marks the worst day in my 37 year career.
However, we firmly believe this action is in the long-term best interests of our shareholders and our company because of the risk and uncertainty associated with being a TARP participant. In addition, our current earnings, while superior to our peers, are not likely to justify our $.47 dividend in the near term.”
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Corker sees ‘glimmer of hope’ in financial sector
Posted on May 10, 2009 at 10:35 pm“There are glimmers of hope” in the financial sector, Tennessee Sen. Bob Corker said Sunday on CNN’s State of the Union when asked if the industry had turned a corner.
“I think it was a positive step,” said Corker of the Obama administrations’ recent “stress tests” on the nation’s largest banks.
“But there will possibly be additional government dollars [for some financial institutions]. I think that hasn’t fully been said and I think that what we’ve got to be concerned about as we move into the future is not causing [the Troubled Asset Relief Program] to be codified so that it’s there forever.”
“I actually am feeling better about it. I really am,” Corker, a member of the Senate Banking Committee, added.
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The end of too-big-to-fail
Posted on May 8, 2009 at 8:07 pmAnd the beginning of what could turn into a bit of a fire sale of banking and other financial assets. With the stress tests behind us, more people are saying the country’s financial behemoths need to be slimmed down.
Some analysts say recent events highlight a fundamental problem that has been somewhat ignored for years; the financial supermarket structure of the big institutions makes them difficult, if not, impossible to operate with great success.
“Investors will say, ‘That business unit hidden in there; let’s spin that off,’” says Sorrentino. “Either the regulators are going to force it or the shareholders are going force it.”
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Dissecting the stress tests
Posted on May 7, 2009 at 10:14 pm
First, all the banks’ results neatly in a row. Among the banks with a notable presence in Nashville, only U.S. Bank and BB&T were deemed not to need new capital. BofA, Wells Fargo, Regions, SunTrust and Fifth Third must raise a combined $53 billion.
Then, from the AP comes a rundown of just how some of the affected players plan to raise the billions they need as well as word from those planning to repay TARP ASAP.
And via the Journal, a measured look at how the once-maligned concept of stress tests – Wells chief Dick Kovacevich not long ago called them ‘asinine’ – may actually come to be seen as the positive tipping point when we collectively caught our breath.
Investors fretted for weeks that the Treasury wanted to nationalize parts of the banking system, despite repeated efforts by Mr. Geithner and others to dispel that idea.
In retrospect, the tests were akin to hitting the pause button. The period allowed Mr. Geithner to buy time for the government’s evolving approach to the banking crisis, which had previously been ad hoc and heavily criticized.
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Bankers may get Wagonered
Posted on May 6, 2009 at 6:01 pm
Press Secretary Robert Gibbs says the Fed’s bank stress tests – results will be unveiled Thursday – may lead to some management changes.
“There are a significant number of people who have begun to ask whether existing management is up to the task,” former Federal Deposit Insurance Corp. Chairman William Isaac said in an interview last week.
The “judgment call” on whether to fire the CEOs of bailed-out banks should be made by the regulators, not the White House, said Isaac, now head of Secura Group, a consulting firm in Vienna, Virginia.
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Six becomes 10 in stress tests
Posted on May 5, 2009 at 10:55 pmSo says the Journal:
It’s possible Wall Street is being overly optimistic about the impact of the results and the resulting dash by banks to bolster capital. One big risk worrying industry officials is that the market will view banks on the list as insolvent when the official results are announced Thursday, even though Fed officials have repeatedly said that’s not the case.
SEE ALSO: BofA may need 34 really big ones and Are Regions and SunTrust part of The Stress Test Six?
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BofA, Citi scramble for Capital Plan B
Posted on May 3, 2009 at 10:59 pmSources have told the FT that early indications from the Fed’s stress tests are that both banking behemoths will need at least $10 billion in new capital.
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Are Regions and SunTrust part of The Stress Test Six?
Posted on April 29, 2009 at 7:50 amSources tell Bloomberg that six of the 19 banks that underwent the Federal Reserve’s stress tests will need more capital to cushion themselves against loan losses. Analysts at Morgan Stanley said late last week that Regions and SunTrust, the parent companies of Nashville’s No. 1 and 3 banks, are likely to be among them.
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No, you can’t tell them how you’re doing; we will
Posted on April 15, 2009 at 12:26 amThe Times has the lowdown on the government’s plan to share with us the results of the bank stress tests.
Goldman’s action has put pressure on other financial institutions to do the same or risk being judged in far worse shape by investors. The administration feared that details on healthier banks would inevitably leak out, leaving weaker banks exposed to speculation and damaging market rumors, possibly making any further bailouts more costly.
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