With financials they all report on a 30, 60, 90 past due list. Most, not all, bad loans have a history of being past due. These loans are reviewed and often taken to loan review meeting, really they are somewhat difficult to hide.
Now the smaller loans may slip by, true.
This same review process may not apply to smaller community banks but it does at super=regionals.
on whether a bank is properly recognizing its problems and reserving for them. If your lenders aren't experienced enough or are afraid to identify a problem then problems are buried until they are too late to solve. It will be interesting to see how good BB&T and other banks are at identifying and dealing with their problem loans.
As a shareholder I hope they are on top of it but in truth, none of us know for sure and that is always the risk of investing in financials.
True. Buts it real important to figure out where we are in the economy. Just going into a slow economy, or are we already in the middle of it and perhaps starting to pass the mid way point. we get last quarters results after they have already happenned. I am thinking the economy is near the middle of the cycle as opposed to the beginning of the slowdown.
The BBT 1,2,3, year chart indicates a double bottom is already in place, sure, we could retest the lows and then move higher.
I agree with you, but no bank is immune to a weakening economy. So, in my opinion, the share price right now is approaching a perfect world scenario. That's why this should and will be trading in the low 30s.
I would think you are correct. Banks risk grade their loans and reserve accordingly. Most all classified (substandard) loans have specific reserves for that individual loan. And I know you know this so I will say it for the benefit of other, that has already been expensed to the reserve and passed through the income statement.
So let's say they have some developer exposure in Ga/Fla. What % of loans does that represent of their total loans? And if the loans go bad what % of the loans do they lose and what do they recoup? I'd be surprised if they don't have some bad loans (else why do they have loan loss reserves).
As I have stated previously on this board the Carolinas and Va represent the larger part of BBT's market. Last time I saw a report BBT had the largest share of any bank of deposits in NC (not Wachovia or BofA).
IMO BB&T's exposure to bad loans is small compared to most banks and unless someone can put figures to their exposure then I will continue to believe that.
How do you figure that? The Fed affects short term rates the most, economics affect longer term rates. Now I've heard banks borrow short (ie customer deposits) and loan long (ie auto loans). So if shorter rates go down more than longer rates seems banks benefit and make more. So please explain how the Fed lowering rates is bad for banks (historically it has been good as the spread widens).