Watch List
as of September 29, 2008
Bank of America – Rating is down primarily due to Tier 1 Capital levels (5.83%). The
acquisition of Merrill Lynch through a $50 billion stock transaction should be accretive
to earnings by 2010. This institution is also regarded as a ‘White Knight’ and despite the
deposit cap restrictions will probably be allowed to make further acquisitions. They have
access to global capital markets and will raise capital as needed.
Regions Bank – Second quarter downgrade in rating was due to a significant drop in net
income due to merger related expenses ($100 MM) and LLR provisions ($309 MM).
Capital levels still remain strong. Regions Bank earned $607 MM through the first six
months. Third quarter earnings are due out October 21 with close attention to be paid on
non performers and ALL levels. Regions purchased $900 million in deposits from FDIC
from the Integrity Bank failure.
Bank of Oklahoma – While the lead bank earned $41 MM in the second quarter, the
seven bank holding company took various charges resulting in an $11.6 MM loss.
Analysts expect an increase in the third quarter earnings announcement due out the third
week in October.
Bank of the West – A drop in second quarter income due to a $185 MM LLR charge as
well as a $28 MM impairment charge against the securities portfolio. The ALL covered
100% of NPAs at June 30. Capital still remains strong with Tier 1 leverage at 8.06%.
Third quarter earnings are due out the third week on October.
PNC – Second quarter ratings were down due to provision expenses and increased levels
of NPAs. They maintain healthy capital and LLR ratios. Third quarter earnings are due
out the third week in October.
TCF – The second quarter downgrade was primarily due to lower capital levels. They
raised $100 MM in late August and have been increasing LLR levels. Net interest
margin remained strong at 4%. Analysts estimates reveal an expected increase in the
third week of October.