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Synovus Financial Corporation Message Board

  • okatiejack okatiejack Mar 18, 2010 9:49 PM Flag

    SNV CRE LOSSES ALREADY RECORDED ON BOOKS

    What some fail to understand, and I am in the business, is that huge write-downs and write-offs have already been taken to conform to FASB 114 rules. These are called loan loss provisions and are based on new property appraisals and estimated costs to dispose. The disposal costs also are part of the provision for loan losses. This is new territory as the Regulators have never required this previously. It means that the write-downs are more excessive than they need to be. In any event, the losses HAVE ALREADY BEEN TAKEN on these commercial real estate loans. There is no impending doom as the naysayers would have you think. When the economy improves what usually happens is that loan grades improve and loan loss provisions are released which means higher profits. This is confirmed by the fact that the dividend passed yesterday would not have been allowed if conditions were declining. So do not listen to the people who have no facts behind their opinion. Figure it out for yourself.

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    • YES they are.

    • you poor bastards---i am trying to help you---do your own dd, check out security bank and the lies told by the board all the way to a certain friday and the visit by fdic--stay in if you want

    • (Figure it out for yourself.) Come back after we got the first quarter behind us and tell us a loss is not a loss. May be you should go into politics . You can be like Bush senior and say no new taxes. One little flaw in your theory. They are going to write off those impaired loan values this quarter. Let me know when you think that you know what property is worth because everyone I talk to has no idea . Do you think this is why Synovus has sold 2 billion worth for 30 to 50 cents on the dollar? I will check back with you after this quarter.

      • 1 Reply to Navarre55
      • Navarre, write-offs to not affect profits since loans are not written off directly to the income statement. Losses are written off against the RESERVE for loan losses. Profits are only affected when the PROVISION for loan losses is increased and that has already occurre, since the Regulators and CPA Firms and Inside Auditors require adherence to FASB 114 which is new appraisals on all loans rated Substandard or lower. Bank then takes 75% of the NEW appraisal value and further deducts expenses related to the disposal of these assets and the loan is written down to that amount. This has been ongoing for the last few years so the losses have already been recorded. Please don't mislead.

    • What the hell is this?? a well reasoned rational post does not belong on the SNV board

    • Interesting point. Given that CRE losses have already been written off, what impact do you think that would have on their 'understood' book value of approximately $3.80? What would you estimate their true BV to currently be?

      Perhaps I'm misguided, but I put much weight on this, especially for non-profitable banks.

      Thanks,
      Joe

 
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