Gollum

What Does Jim Cramer See in Commerce Bancorp?

I agree with much of your article but make the following comments:

You say that the ratio of core deposits to assets is high – and so it is. This is generally considered highly desirable since non-core deposits and non-deposit liabilities tend to be more expensive and “hot” – quick to leave the bank in search of higher yield.

You say that the drop in CBH’s non-core funding is “ominous.” I think it evidences that CBH is able to fund itself from retail deposits.

The danger may be in the MBS that CBH holds as a number of hedge funds and others are taking losses on MBS. I don’t know the quality of CBH’s MBS.