Quote Of The Day
“Locally, everything is going well with us, and with other local banks. But it creates great bargains all around, and there are hundreds of banks that will benefit from this cycle in the long run."- J. Williar Dunlaevy, president and CEO of Massachusetts-based Legacy Banks, which saw its lowest stock price of $10.51 yesterday. "Our shareholders are hanging with us. The conservatism of
Subprime and Banks
Bank Accuses Lutz Analyst Of Defamation. “BankAtlantic (BBX) has filed a defamation suit against Richard Bove and his investment banking firm, Ladenburg Thalmann [after] Bove issued a research report… that tried to identify potential bank failures [after] the failure of IndyMac Bank… Bove measured more than 100 large publicly traded banks according to their "nonperforming assets," such as loans delinquent by more than 90 days and foreclosed assets. He then compared the nonperforming assets to the banks' outstanding loans. If a bank's nonperforming assets came to more than 5% of its outstanding loans it "suggests danger… Only seven large banks out of more than 100 [fell] in this so-called danger zone. BankAtlantic Bancorp fell just outside the danger zone, with nonperforming assets that were 4.4% of outstanding loans, Bove’s data showed.” (
Thornburg Offers Potential 37% Gain for Arbitragers. “Thornburg Mortgage Inc. (TMA), the “jumbo” home lender that averted bankruptcy in March, may offer investors a chance to earn a 37% profit under terms of its rescue package. Preferred shareholders will receive $5 in cash and 3.5 common shares if two-thirds of holders tender their stakes by Sept. 30. Were the deal to close today, holders would receive cash and stock totaling $6.09 for each preferred share, which closed yesterday between $4.46-$4.62. The bailout, financed by MatlinPatterson Global Advisers LLC, is little consolation for longer-term shareholders who have lost as much as 99% of their investment in the past year.” (Bloomberg, July 22nd)
Bank of America Earnings Drop Less Than Estimates. “Bank of America Corp. (BAC), the biggest
Freddie Mac Becomes an SEC Registrant. “Freddie Mac has become a registrant with the U.S. SEC under the Securities Exchange Act of
Freddie Mac May Slow Purchases of Mortgages, Bonds. “Freddie Mac, the second-largest
Indymac May Not Be Last Bank To Fail, Analysts Say. “The FDIC said eight banks, including IndyMac, have collapsed since February 2007. At the end of Q1’08, it listed 90 "problem institutions" on its watch list. However, FDIC spokesman Andrew Gray noted that just 13% of institutions on the watch list have failed on a historical basis. Also, the list now is far shorter than the 2,165 names it had in 1987 prior to the savings-and-loan crisis. Gerard Cassidy, an RBC Capital Markets analyst… estimated that 300 of the country's 8,494 banks and thrifts are likely to fail over the next three years… FDIC: More than 2,300 banks and thrifts went up in smoke during the S&L crisis 20 years ago.” (Investment News, July 21st)
UnionBanCal Dances with Wall Street, Analysts. “UnionBanCal Corp. (UB) said profits fell amid fast-rising loan loss provisions, but earnings [still beat] analyst estimates [and] suggested that Q3 earnings would top earlier estimates. The large California-centric regional bank’s [announcement resembled] Wells Fargo & Co. (WFC), which reported a drop in earnings due to increasing credit costs but beat analysts’ estimates — and… raised its dividend by 10%. Bank of America which also saw credit loss charges jump five-fold from year-ago levels and earnings drop accordingly, beat Street estimates and then… suggested that its acquisition of Countrywide would be accretive to earnings by the end of this year.” (Housing Wire, July 21st)
Fortress Mortgage Fund Down 30 Percent: Report. “A fund set up by the private-equity and hedge-fund giant Fortress Investment Group LLC (FIG) to take advantage of turmoil in the mortgage bond market has tanked so far, to the tune of 30% in just three months after its formation. Wall Street Journal’s [report on] Fortress Mortgage Opportunities Fund, suggests performance has fallen as even the top-rated tranches of non-prime mortgage deals have suffered fits... The pursuit of a AAA-rated investment strategy has proven no fail-safe, either, as major credit rating agencies have been taking the axe to former investment-grade ratings amid continuing declines in collateral performance.” (Housing Wire, July 21st)
FDIC Faces Mortgage Mess After Running Failed Bank. “It turns out that the
Mid-South Bank Customers Protected by FDIC.
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