More Videos
- United Way's 211 Phone Number:" Call It The 911 For Every Day"
- Buy Iceland? Sell Alaska? Hold Beverly Hills?
- Taking Responsibility: Who Thinks They're Best At It
- Should The Government Really Be Running Your Bank?
- More Names For Crisis And Panic of 1893--Your Emails
- New Definitions For A "New" Type Of Stock Market
- Save A Corporate Bigwig Today!! (Here's How)
- A Wise Man Once Said Of Crisis--We're All In This Together
- Signs Of The Times
- Tiger Woods Is Bullish On Real Estate
- Bowyer: Mark To Market Still Lives (Unfortunately)
- Mad Mail: Why Not Shut the Market Down?
- Lightning Round OT: AFLAC, Valero and More
- Lightning Round: Chesapeake, Corning, J&J and More
- Cramer: What’s the Worst-Case Scenario?
- Game Plan: The Crash of '87 Scenario
- Cramer’s Double Secret Borrow-Binge Plan
- Your First Move For Monday October 13th
- History In The Making
- Three Dairy Firms Apologize for China Milk Scandal
- Santander in Talks to Acquire Sovereign: Source
- Leaders Pushes Plans to Support Banks, Fight Crisis
- Asian Markets Regain Footing, But Investors Are Cautious
- 'Chihuahua' Bites Crowe, DiCaprio at Box Office
- GM Held Talks With Ford Before Turning to Chrysler
- Markets to Fall 20% More at Most: IMF Economist
- G.M. and Chrysler Explore Merger
- Stock Market Crisis: Nation's Mayors Sound Off
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.
More from CNBC.com ... |
“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
Del.icio.us
Digg It
Data is a real-time snapshot *Data is delayed at least 15 minutes