Bactech Environmental Corp C.BAC

STAY AWAY

[MIA17]

Dweeb talking head Paul Harris went on the record last week with BAC as a top pick. Utter nonsense. Read the below news release.
SOURCE: Weiss Ratings


Oct 22, 2010 11:25 ET
JPMorgan Chase, Wells and Bank of Each Hold More Than $20 Billion in Foreclosures
$2 in Pipeline for Every $1 of Loans Already in Foreclosure
JUPITER, FL--(Marketwire - October 22, 2010) - JPMorgan Chase, Wells Fargo Bank, and Bank of America each reported more than $20 billion in single-family mortgages currently foreclosed or in the process of foreclosure as of midyear, according to Weiss Ratings, the nation's leading independent provider of ratings and analyses of financial institutions and insurance companies.
In addition, Weiss found that for each dollar these banks held of mortgages in
foreclosure, they had additional exposure to more than $2 in mortgages 30 days or more past due.
Martin D. Weiss, chairman of Weiss Ratings, commented: "Although only some portion of the past-due loans will ultimately go into foreclosure, these figures tell us that the biggest players are not only in deep, but could sink even deeper into the mortgage mayhem. Meanwhile, however, there are also some large banks that have done a relatively good job of avoiding the brunt of the crisis."
Table 1.
Large Banks and Thrifts with Most Foreclosed Mortgages
(with total assets of $10 billion or more)

Institution (State)
Foreclosed and In Process
($Mil)

Past Due Mortgages1
($Mil)

Total
($Mil)
JPMorgan Chase Bank ()
21,733

43,395

65,128
Wells Fargo Bank (S.D)
20,524

48,037

68,561
Bank of , NA (N.C)
20,297

54,608

74,905
Citibank, NA ()
6,303

19,247

25,550
U.S. Bank NA ()
4,262

5,308

9,570
PNC Bank, NA ()
3,483

5,501

8,984
SunTrust Bank ()
3,216

4,147

7,362
Branch Banking and Trust Co (N.C.)
2,079

2,229

4,308
Fifth Third Bank ()
1,138

1,199

2,337
Regions Bank ()
1,040

1,170

2,211

Bank and Thrift Industry Total
125,791

253,237

379,028
1Past-due mortgages include 30-89 days past due, 90+ days past due, and nonaccruing.
Data Source: SNL Financial Bank Regulatory Data
Among all banks, JPMorgan Chase has the largest volume of mortgages in foreclosure or foreclosed with $21.7 billion. In addition, it has $43.4 billion in mortgages past due.
Meanwhile, compared to JPMorgan, Bank of America has a somewhat smaller volume of foreclosures ($20.3 billion), but it has a larger pipeline of past-due mortgages -- $54.6 billion. Thus, overall, including all foreclosed and delinquent categories, Bank of America has the largest volume of bad mortgages among banks, with $74.9 billion, while Wells Fargo has the second largest with $68.6 billion.
Other banks, despite their large size, are less heavily exposed to mortgage difficulties. Citibank has $6.3 billion in foreclosures and $19.2 billion in past-due mortgages, or a total of $25.6 billion. And the volume held by other large banks, such as U.S. Bank, PNC Bank, and SunTrust is even smaller.
Impact of Foreclosures on Financial Strength Depends on Several Factors
"In addition to the volume of bad mortgages, the vulnerability of each bank to the foreclosure crisis depends on the capital and loan loss reserves it has set aside to cover losses and other factors such as its earnings, liquidity, reliance on less-stable deposits, and the quality of its overall loan portfolio," Weiss added.
Table 2 provides one targeted measure of the bank's vulnerability to the mortgage crisis, along with the overall Weiss Financial Strength Rating, which incorporates all key factors deemed relevant to a bank's financial strength.
Among banks with $1 billion or more of mortgages already foreclosed or in process of foreclosure, Wells Fargo has the greatest exposure to bad mortgages in proportion to its capital. For each dollar of Tier 1 Capital, the bank has 75.4 cents in bad mortgages, or a ratio of 75.4%. The equivalent ratios for JPMorgan Chase, Bank of America and SunTrust are 66.8%, 66% and 57.6%, respectively. Losses on these foreclosures and past-due loans will first be absorbed by the banks' loan loss reserves, but then they may have to dip into capital to cover more.
Table 2.
Large Banks with Highest Foreclosures as a % of Capital
(with total assets of $10 bill or more and total foreclosures of $1 bill or more)

Institution (State)
In Foreclosure and Past Due Mortgages as % of Tier 1 Capital2

Weiss Financial Strength Rating
Wells Fargo Bank, NA (S.D.)
75.4


D

JPMorgan Chase Bank, NA ()
66.8


D

Bank of , NA (N.C.)
66.0


D

SunTrust Bank ()
57.6


D-

U.S. Bank NA ()
53.8


D

PNC Bank, NA ()
35.9


D+

Branch Banking and Trust Co (N.C.)
30.9


C-

Citibank, NA ()
25.3


D+

Regions Bank ()
20.1


D-

Fifth Third Bank ()
16.9


C-


Bank and Thrift Industry Aggregate
33.3%




2 Tier 1 Capital consists of common shareholders' equity, perpetual preferred shareholders' equity with noncumulative dividends, retained earnings, and minority interests in the equity accounts of consolidated subsidiaries. It does not include loan loss reserves.
Weiss Financial Strength Rating: A=Excellent; B=Good; C=Fair; D=Weak; E=Very Weak
Data Source: SNL Financial Bank Regulatory Data
"Considering that many large banks also take other kinds of risks beyond strictly home mortgages," Weiss commented, "these are very large exposures that could directly impact shareholders and even the safety of depositors." Reflecting both their exposure to foreclosures and the other factors cited here, all four banks merit a rating of D ("Weak") or lower, indicating vulnerability to financial difficulties and, if conditions continue to deteriorate, even failure.
On the positive side, some banks have been able to largely avoid or at least contain mortgage difficulties, as shown in Table 3.
Table 3.
Large Banks with Lowest Foreclosures as a % of Capital
(with total assets of $10 bill or and total real estate loans of $1 bill or more)

Institution (State
In Foreclosure and Past Due Mortgages as % of Tier 1 Capital

Weiss Financial Strength Rating

Deutsche Bank Trust Co. (N.Y.)
1.2


B


BNY Mellon, NA ()
1.8


B-


Signature Bank (N.Y.)
1.8


B


Commerce Bank, NA ()
3.2


B-


Rabobank, NA ()
3.2


C

Weiss Financial Strength Rating: A=Excellent; B=Good; C=Fair; D=Weak; E=Very Weak
Data Source: SNL Financial Bank Regulatory Data
Advice for Consumers
Even if a bank is bailed out or taken over by the FDIC and sold to another institution, consumers can miss out on promised interest income, lose access to lines of credit and suffer other serious inconveniences. Therefore, Weiss recommends that consumers seriously consider avoiding banks with a Weiss Rating of D+ or lower, while seeking to do most of their business with banks meriting a rating of B+ or higher.
To help consumers avoid the weakest institutions and find the strongest in their state, Weiss Ratings has released its list of 2,645 weakest and 1,188 strongest banks to the public. Consumers can access the free lists by providing their email address at www.weissratings.com/banklist.
About Weiss Ratings
Weiss Ratings accepts no payments for its ratings from rated institutions. It is among the nation's leading providers of independent ratings on 8,000 banks and S&Ls and the only provider of independent ratings on the nation's 4,200 insurance companies. Weiss Ratings also distributes independent ratings on the shares of thousands of publicly traded companies, mutual funds, closed-end funds and ETFs.
Weiss identified, in advance, nearly all major banks that failed or required a federal bailout in the 2008-2009 debt crisis. (See Weiss Warnings of Financial Failures in Debt Crisis of 2008-2009.)
Separately, Weiss outperformed Standard and Poor's, Moody's, A.M. Best and Duff & Phelps (now Fitch) in warning of future life and health insurance company failures according to a landmark study by the U.S. Government Accountability Office (GAO), while also outperforming its competitors in identifying the strongest insurers, according to its follow-up study using the GAO's research methodology. According to a leading consumer publication's May 2009 study of life insurance ratings by Fitch, Moody's, S&P, A.M Best and Weiss Ratings, Weiss Ratings (formerly TheStreet.com Ratings) "was the toughest grader with independent and objective ratings."
Thanks to its strong track record and independence, TheNew York Times wrote that Weiss was "the first to see the dangers and say so unambiguously;" Barron's wrote that Weiss is "the leader in identifying vulnerable companies;" and Esquire concluded that Weiss Ratings is "the one company [that] ... provides financial grades free of any conflicts of interest."