Thread: Toxic Loans Topping 5% May Push 150 Banks to Point of No Ret

Toxic Loans Topping 5% May Push 150 Banks to Point of No Return

By Ari Levy

Aug. 14 (Bloomberg) -- More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank’s equity and threaten its survival.

The number of banks exceeding the threshold more than doubled in the year through June, according to data compiled by Bloomberg, as real estate and credit-card defaults surged. Almost 300 reported 3 percent or more of their loans were nonperforming, a term for commercial and consumer debt that has stopped collecting interest or will no longer be paid in full.

The biggest banks with nonperforming loans of at least 5 percent include Wisconsin’s Marshall & Ilsley Corp. and Georgia’s Synovus Financial Corp., according to Bloomberg data. Among those exceeding 10 percent, the biggest in the 50 U.S. states was Michigan’s Flagstar Bancorp. All said in second- quarter filings they’re “well-capitalizedâ€

I have no doubt! Two more banks closed today....one in AL and the other in PA.

CNB--Colonial National Bank, based in Alabama with branches in five states--just had its assets agreed to be bought by BB&T. Funny, they are not touching the liabilities. CNB went a little nuts in the FL real estate boom, and their stock, which hit $18 during the boom is now worth near to nothing.