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  • habitsowner habitsowner Oct 9, 2009 7:55 PM Flag

    Tier One

    IS there a way from reading the financial statements the banks put out that one can "find" their Tier One, or is it a matter of calculating. I cannnot remember seeing that term in FTBK's financial statements.

    I also hold another regional bank, in a different part of the country, that is holding up nicely. However, that could also be smoke and mirrors, too, so I'd like to be able to pick apart their financial statements to find their Tier One.

    Thanks for the information. Poor, poor FTBK. It looks to me as if it was simply greed on the part of the Board and management. Didn't want to get left out of the real estate pie which ended up being pie in the sky. And it WAS at one time such a good bank. And, of course, poor, poor us because of it.

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    • You got me interested so I went and looked myself. At 6/09 (the most recent data rolled up into the UBPR's) their Tier1 was 6.49% vs their peer groop at 8.32%.

      So one would have to figure out how much they have charged off since 6/09 and factor in possible balance sheet shrinkage.

      Anyway, they are probably lower than 6.9% now but no idea without spending all night trying to guess.

      Bottomline, if they had come up with new capital there would have been news and the likelyhood that they were able to shrink their balance sheet to perserve capital is unlikely in this marke as there is no place for undesirable loans to go.

    • The standard for bank financial reporting is the Uniform Bank Performance Report (UBPR). The link below will send you to the search site to pull one up for this bank.

      With that in mind, the data here lags, and this bank made major adjustments to its reserves and took some significant write downs, so the numbers as of today will be worse than the most recent data on this site.

      Within the UBPR look for the ratios page. Typically, a bank ladden with commercial real estate exposure should have tier 1 capital between 10% and 14% to account for that form of risk.

      So even if the bank has say 10% tier1, which is above minimal levels. It may not be enough if the bank has a high risk profile plus deteriorating credit risk.