MrLSU LSU Fan Baton Rouge Member since Jan 2004 1826 posts
Time to sell your interest in any Bank stock which has less than C- rating (Posted on 11/7/12 at 8:42 am)
The FDIC was instructed last year to hold off as many bank failures as possible until after the election. There are at least two dozen banks in Louisiana who fit this category who will going to be taken over in 2013 or forced to sell. Ratings of less than a C- or those under federal consent decrees right now should be avoided at all costs.
If you have more than the federally protected limits in a banking institution (Banks and/or Credit Unions) with less than a C- rating I would start planning accordingly so you don't encounter any problems down the line. This is especially important for businesses who keep large amounts of cash on hand. The consolidation of the US banking industry is going to be unlike anything we have seen since the 1980's.
Tiger4Ever UTEP Fan Member since Aug 2003 34919 posts
re: Time to sell your interest in any Bank stock which has less than C- rating (Posted on 11/7/12 at 9:32 am to MrLSU)
Uh...no.
Consolidation will take place due to regulatory hurdles couples with aging boards/management teams....but their aren't two dozen or more banks in Louisiana to be "taken over" by the FDIC.
And where are these ratings you are referencing coming from?
MrLSU LSU Fan Baton Rouge Member since Jan 2004 1826 posts
re: Time to sell your interest in any Bank stock which has less than C- rating (Posted on 11/7/12 at 10:07 am to Tiger4Ever)
Basel 3 and CFPB changes will certainly impact the markets but the FDIC was put on an unofficial directive to hold off on any takeovers unless the institution was so critically ill that they were forced to pull the plug. C- ratings and lower from Weiss is the only true bellweather that you can rely on.
Tiger4Ever UTEP Fan Member since Aug 2003 34919 posts
re: Time to sell your interest in any Bank stock which has less than C- rating (Posted on 11/7/12 at 10:15 am to MrLSU)
No doubt, but the comment period for Basel III closed just a week or so ago...it is a long way off an will likely look very different from what is proposed...
I'll stand by my statement that there is nowhere close to "at least two dozen" banks in jeopardy of FDIC takeover in Louisiana. .
Tiger4Ever UTEP Fan Member since Aug 2003 34919 posts
re: Time to sell your interest in any Bank stock which has less than C- rating (Posted on 11/7/12 at 10:41 am to RickAstley)
IMO, bankrate may be the best publicly available. The problem with these rating agencies is that they tend to focus on a few key ratios....gives you an idea, but doesn't tell the entire story more times than not.
Check out the Uniform Bank Performance Reports from the FFIECs website...learn it....live it. That will be the bible so to speak if you feel the need to analyze a privately held bank.
Im4datigers LSU Fan Northern Virginia Member since Oct 2003 2986 posts
re: Time to sell your interest in any Bank stock which has less than C- rating (Posted on 11/7/12 at 11:04 am to Meauxjeaux)
quote: Tiger4Ever
....legit info source. I'll echo what he says as well. You will see consolidation no doubt. However, it will be because of the lack of succession planning (mostly old time banks with hard headed grey hairs on mgt and board)and also the interest rate/margin squeeze that's going to only get worse now.
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