Skip navigation
MOST POPULAR RELATED TAGS
  • TOPICS
  • SECTORS
  • COMPANIES
Funny Business Video Gallery
A look at how online retailer Amazon is expected to do this Monday, with CNBC's Jane Wells.
A look at what's likely to happen at the registers once the doors open on Friday, with Richard Hastings, Global Hunters ...

SQUAWK BOX VIDEO

» More

Current DateTime: 07:54:37 30 Nov 2009
LinksList Documentid: 31388230
Expiration DateTime: 11/30/2009 7:57:10 AM
    • Inside AMZN's Cyber Monday  4 hrs ago

        A look at how online retailer Amazon is expected to do this Monday, with CNBC's Jane Wells.

    • Shopper & Investor Deals  25 Nov 2009

        A look at what's likely to happen at the registers once the doors open on Friday, with Richard Hastings, Global Hunters Securities; Richard Jaffe, Stifel Nicolaus & Co. and CNBC's Jane Wells.

    • Black Friday: Bargain or Bust?  25 Nov 2009

        Whether the deals are better than what shoppers will usually see or if it is just another marketing tactic, with Hitha Prabhakar, Style File Group; Brad Wilson, BlackFriday2009.com and CNBC's Jane Wells.

    • Holiday Central  25 Nov 2009

        A discussion of the many ways retailers are preparing for Black Friday, live from K-Mart in Burbank, CA, with CNBC's Jane Wells.

    • Retailers Getting Ready for Black Friday  25 Nov 2009

        Retailers are getting ready for Black Friday, and CNBC's Jane Wells has the play by play. Stacy Janiak, of Deloitte, shares her insight.

    • Amazon vs. Wal-Mart  24 Nov 2009

        What began as a price war between Wal-Mart and Amazon over a handful of books has nos spread to a wide assortment of consumer goods. Lee Eisenberg, a noted retail expert and consumer behaviorist, and CNBC's Jane Wells discuss.

RSS FEED

» Help

Current DateTime: 07:54:39 30 Nov 2009
LinksList Documentid: 31388237
Expiration DateTime: 11/30/2009 7:57:17 AM
powered by digg

Funny Business

Text Size
Jul.14
10:13 PM ET
Monday, 14 Jul 2008
One Bank in the "Danger Zone" Says Not So Fast

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

© 2009 CNBC, Inc. All Rights Reserved

Tools:
PrintEmailAdd This share icon
Next Post
  • digg share
ADD COMMENTS
Remaining characters


Current DateTime: 05:12:25 30 Nov 2009
LinksList Documentid: 29778428

Current DateTime: 01:02:04 30 Nov 2009
LinksList Documentid: 29779196

Current DateTime: 01:02:04 30 Nov 2009
LinksList Documentid: 29779199

Current DateTime: 07:18:37 30 Nov 2009
LinksList Documentid: 29779198
  Data is a real-time snapshot  *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
A Division of NBC Universal
Thomson ReutersThomson Reuters