The Federal Reserve released last friday commercial bank data for the period ending 6/29/11. Quite interesting. All % changes presented below are annualized.
Vs. 3/31/11, real estate loans were down 6% with home equity down 7%, 1st lien residential down 5% and commercial down 7%. However, securitized commercial real estate was up 10% so in absolute dollars commercial real estate loans were essentially flat.
Vs. 3/31/11, all other loans which account for about 47% of bank loans were up 10% with c&i plus 9%, credit cards plus 4%, auto and personal plus 10% and specialized lending plus 17%.
Credit metrics it appears continue to improve but at a faster rate. The reserve for loan losses dropped $14 billion or about 85 bsp or 28% (annualized) vs. 3/31/11. This is double the rate of reduction sequentially. If BBT's ALL shows a 28% improvement it's worth around $175 million for the quarter. Big question mark imo continues to be the valuation allowance. This thing has been really bugging me - I believe bbt has continued to take $100 million quarterly marks on their reos for the last 2 years. I think the oreo 3/31/11 balance carries an average mark of 50 to 53% so if I see another $100 million mark on oreos for the second quarter of 2011, I think Kelly King needs to provide an explanation including a short term projection.
Vs. 3/31/11 deposits increased $263 billion or around 13%. Very impressive.
Net unrealized gains/losses on investment securities went from a negative $3 billion to a positive $17 billion.
I thought the employment data was ok. A lot of fluff in seasonal factors. Since end of january employment unadjusted is up 4 million private sector nonfarm jobs which is about 800,000 jobs higher than last year or around 160,000 jobs per month. Not great numbers but once housing recovers imo, they'll easily double. A positive on residential r/e is that rental vacancies have been dropping quite a bit and rental pricing have been increasing. Big increase in multifamily construction projected in 2012. Last week wsj had an article on subject with a projected increase of 5 fold vs. 2011.
Nomura securities is pretty stupid downgrading Bbt and setting price target of $26/share given the Federal Reserve Bank Stats.