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BB&T Corporation Message Board

  • normlasky normlasky Jul 7, 2008 6:12 PM Flag

    The Big Numbers - 86% /14%

    86% of bbt gross charge-offs for the 1st qtr. 08 were loans with no collateral (credit cards, student loans, personal loans) or loans with weak collateral (home equity line, jr. lien on property, car loan) but only made up 14% of non-performing loans.

    Consequently, most of the principal of these loans had to be written off .

    The balance or 14% of bbt gross charge-offs for the 1st qtr. 08 were loans secured by real estate (first lien with an average ltv guesstimated at 70%) and in many cases were personally guarantees. These loans made up about 86% of non-performing loans.

    Imo, most of the principal of those loans which will have to be foreclosed will be recovered and therefore, only 20% or less of these loans will have to be written off. Some of these loans will return to accruing status once the economy picks up.

    Bank analysts apparently have a difficult time making this type of differentiation. Or they believe that the vast majority of the real estate collateralizing bbt loans is greatly inflated like california, arizona and arizona property values.

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