More Videos- Michael Jackson: The Music And The Money
- Cuddle Parties Heat Up
- Jackson's 'Wife'? One Woman Claims She's the One
- The Entrepreneurial Spirit Outside Neverland
- Perhaps The Dumbest Idea Ever
- California: Bad For Business, Good For Bonds?
- Megan, Michael, Madoff, And More - Your Emails
- A Different Sort Of Statement To The Madoffs
- Michael Jackson Still Selling Tickets - On eBay
- Hunting Pirates? Maybe Not
- Market 360: The Week's Best & Worst
- Fireworks At Pharma's Market
- Value of Warren Buffett's Annual Gift to Gates Foundation Falls Along With Berkshire's Stock
- Michael Jackson: The Music And The Money
- Five Stock Picks for This Market
- Realities of the New Obama Refis
- Weak Dollar Means Gold at $1,040: Strategist
- Court Ruling Could Mean Trouble for TiVo
- Lance, Please Back Out Of Tour
- BOJ Shirakawa: Japan Corporate Finance Still Tight
- China Reassures on Dollar Debate Before G8
- Obama Heads to Moscow for 'Reset' Summit
- Alcoa to Post Loss — What Does This Mean?
- UK Spy Chief's Wife Posts Life on Facebook
- A Goldman Trading Scandal?
- Partner Re to Buy Paris Re in $2 Billion Deal
- Obama Plan Would Trim Back Financial Powerhouses
- Biden: 'We Misread How Bad The Economy Was'
RSS FEED
Text Size 
After I blogged about Ladenburg Thalmann's Dick Bove using two ratios of bad loans to other assets to figure out which banks may be in trouble, I heard from one of the banks classified as in the “danger zone.” I got an email from a PR firm which says it represents Oriental Financial.
“You quoted Richard Bove of Ladenburg Thalmann’s report as saying that Oriental, which is based in San Juan, Puerto Rico, had a ratio of nonperforming assets divided by reserves plus common equity of about 40% which put Oriental into the 'danger zone'," the email says.
Actually, the bank says the ratio is 26 percent (nonperforming assets of $73,286,000 divided by reserves and equity totaling $281,850,000). "These are very sensitive times for banks and we don’t want incorrect information to lead to misperceptions."
They are correct in pointing out that Oriental Financial [OFG
Loading...
()
] was NOT in the "danger zone" by this ratio. However, the ratio I actually blogged about concerning the bank was a different one dividing nonperforming loans by all loans.
That did have Oriental Financial in Bove's “danger zone”, with a ratio of 6.12 percent (anything over 5 percent suggests “danger”). My mistake was to then move onto Bove's second ratio and lump Oriental in with that group as well, when, in fact, by that metric it is NOT in the “danger zone.”
Meantime, Bove himself is trying to "clarify" his report using the two ratios. He says he meant them to show that the banking industry is actually not so bad compared to 1990. “This data, we thought, indicated that banks were in better condition than generally perceived,” writes Bove.
"Apparently, it has been misinterpreted to suggest that there are significant problems in the financial system. This is not my point at all.” Addressing concerns by clients about specific big banks, Bove says only Washington Mutual is “on the edge of danger,” adding that “We are definitely not suggesting that National City or First Horizon, (which he has Buys on) is in dangerous condition at the present time.”
Questions? Comments? Funny Stories? Email
Data is a real-time snapshot *Data is delayed at least 15 minutes