Texas Ratios, Capitalization Ratios, 30 Day Late Loans of Recently Failing Banks
by ilene - May 1st, 2010 5:02 pm
Texas Ratios, Capitalization Ratios, 30 Day Late Loans of Recently Failing Banks
Courtesy of Mish
Inquiring Minds just may be interested in the Texas Ratios, capitalization ratios, and percentages of 30 day late loans or higher at recently failed banks.
The Texas ratio is a measure of a bank’s credit troubles. Developed by Gerard Cassidy and others at RBC Capital Markets, it is calculated by dividing the value of the lender’s non-performing assets (Non performing loans + Real Estate Owned) by the sum of its tangible common equity capital and loan loss reserves.
In analyzing Texas banks during the early 1980s recession, Cassidy noted that banks tended to fail when this ratio reached 1:1, or 100%. He noted a similar pattern among New England banks during the recession of the early 1990s.
Bank Failures 2010-04-30
Westernbank Puerto Rico: 136%
Total Capital: 8%
Total Capital% minus (30+ days late or more / Total Assets): -7%
Eurobank Puerto Rico: 213%
Total Capital: 4%
Total Capital% minus (30+ days late or more / Total Assets): -10%
R-G Premier Bank of Puerto Rico: 270%
Total Capital: 6%
Total Capital% minus (30+ days late or more / Total Assets): -19%
CF Bancorp (MI): 421%
Total Capital: -1%
Total Capital% minus (30+ days late or more / Total Assets): -10%
Champion Bank (MO): 344%
Total Capital: 2%
Total Capital% minus (30+ days late or more / Total Assets): -19%
Champion Bank (MO): 194%
Total Capital: 2%
Total Capital% minus (30+ days late or more / Total Assets): -6%
7 Bank Failures Cost FDIC About $7.4 Billion
The above 7 bank failures will take a $7.4 billion bite out of FDIC deposit fund.
Emergency Powers Stabilize Puerto Rico Banks
Inquiring minds are reading Puerto Rico Banks Seized as Regulators Waive Deposit Limits.
Regulators used emergency powers to stabilize Puerto Rico’s banks, putting almost a third of the U.S. territory’s deposits in Popular Inc. and giving control of another lender to a Canadian firm.
Deposit limits were waived to allow Banco Popular of Puerto Rico to hold $19.5 billion, or 31.4 percent of the island’s total, after its purchase of Westernbank Puerto Rico, the Federal Reserve said yesterday in a statement. Three banks on the island were shut at a cost to the Federal Deposit Insurance Corp. of $5.3