RE: [RT] Bank Loan Performance Lab, RealTraders Email List Archive

BB&T, as I recollect, is an old fashioned bank. Of course, they’ve grown, Thorn Gregory (former CEO who I knew) died, then his successor died a year later (who I knew but can’t recall his name at the moment), and John Allison took over (who I met but he was only then recently acquired at that time). When I knew that bank, they were an asset based bank. They believed in having real skin in the game….cash downpayment and excess equity. Credit rating was secondary. Their philosophy back then was “every dollar of downpayment and equity in a loan is one dollar less you will lose.” These days banking has become “if he has a job and has been paying his bills, equity is secondary.” But I believe that the ‘80s and now prove quite conclusively that people that have real value to lose will find to make a loan payment. I hope that’s the tradition BB&T has continued but I’m 15 years removed from them (except for my CDs).

About delinquencies to allowance for losses. Allowance for losses is typically some historical percentage for small consumer loans, but for large loans it becomes very specific with very specific evaluations of equity in each loan. So allowance for loan losses related to 30 day delinquencies might not be comparable between banks depending on the breakdown of small loans to large loans. And I’m really surprised about the lack of farmland loans. Maybe classifications have changed but if BB&T isn’t financing large farm loans in NC, SC and VA, I’m at a loss as to who would be doing that. First Union (now Wells Fargo), Wachovia (now Wells Fargo), NCNB (now BoA)…..none of them would touch farm loans and farmland loans in North Carolina.

I’m afraid that I thought you were looking for a bank for transaction account safety rather than investment. I think BB&T is a survivor but I don’t have any interest in finding a bank for equity investment. My interest was FDIC insured CDs so I think I’m covered from both angles for BB&T and the other banks that have my CDs funds through their conduit. Good luck in picking out some better bank investments.

Jim

From: realtraders@xxxxxxxxxxxxxxx [mailto:realtraders@xxxxxxxxxxxxxxx] On Behalf Of Don Ewers
Sent: Saturday, March 21, 2009 11:50 AM
To: realtraders@xxxxxxxxxxxxxxx
Subject: Re: [RT] Bank Loan Performance Lab

Jim,

BB&T may be a good bank but the 30 day deliquencies to allowances ratio is 1.67 above the national average for all banks at 1.44 (by contracst TCF Financial is at .75). I am looking for banks down in that area, below the national average and that "appear" to have set up allowances that are adequate, with little credit card or auto exposure.

Ifou look at their farmland loans and farm loans they represent only.35% of the total loans, so their exposure is not there, more on the commercial side of things?

Don Ewers

----- Original Message -----

From: Don Ewers

To: realtraders@xxxxxxxxxxxxxxx

Sent: Friday, March 20, 2009 7:59 PM

Subject: Re: [RT] Bank Loan Performance Lab

Thanks Jim, I will take a look. My premise here is "the baby may have been thrown out with the bath water" with some of these more conservative banks?

Don Ewers

----- Original Message -----

From: Jim Ross

To: realtraders@xxxxxxxxxxxxxxx

Sent: Friday, March 20, 2009 9:45 AM

Subject: RE: [RT] Bank Loan Performance Lab

I’d recommend BB&T, a regional. When they were a client (I was with KPMG in the ‘70s) they were a farming bank out of Wilson NC. They knew farms and rural areas. That’s they’re only limitation in your site and all their other loan categories are excellent. And concerning farms, food might be pretty important to the world. Jim Rogers on CNBC (George Soros’ partner) said he was buying Brazilian farmland a couple weeks ago. Presumably, food will become more scarce in the future….and hence more valuable. I feel like BB&T would know their farmland lending pretty well. In addition, they have the CDARS program. You can buy CDs over the $250K limit at their bank and the CDARS program will spread it among several CDARS member banks to get you full FDIC coverage. You can pick out the banks you want the money to go to. Very convenient as opposed to dealing with a half dozen banks and keeping track of a half dozen levels of paperwork and maturities….all on one statement and one window to shop.

From: realtraders@xxxxxxxxxxxxxxx [mailto:realtraders@xxxxxxxxxxxxxxx] On Behalf Of Don Ewers
Sent: Friday, March 20, 2009 9:39 AM
To: realtraders@xxxxxxxxxxxxxxx
Subject: [RT] Bank Loan Performance Lab

http://wlmlab.com/main.asp

Cool site!

Check out your local bank (Find Bank) to see how they are doing?

Note the deliquency rate rating by loan type on a banks main page and under the Delinquency to Allowance tab whether they are out in front with reserves or way behind (more rightdowns coming.

A wealth of information here.

If you see a particularly good conservative one in your area, please post it here.

One I am watching (and own in the past two weeks) is TCF Financial (TCB) http://wlmlab.com/bkHm.asp?inst=HC2389941

Don Ewers

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