jimmy smith

The Three Riskiest Banks - American Banker

One thing: TCE is important (much more relevant to equity holders than Tier 1) but what's really important is how that balances against the types of assets the bank holds on (and off!) its balance sheet. Some banks with really conservative underwriting (and no toxic assets) can survive with lower TCE, and vise versa.

So, you must scrutinize the quality of the loans and other assets. TCE is just one important data point, but not the whole picture. For example, I'm not sure you should be buying JPM on the basis of its TCE because its got a boat load of nastiness on the balance sheet which'll be hitting TCE pretty hard in the upcoming quarters.