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STI 4Q09_Review- Nonperforming
loans declined marginally to $5,403 mn (4.75% of total loans) at the end
of 4Q09
from $5,444 mn (4.67% of total loans) at the end of 3Q09 but relatively
remain
high when compared with $3,940 mn (3.10% of total loans) at the end of
4Q08. This
marginal decline in non-performing loans can largely be attributed to
the
transfer from non-accrual to foreclosed and other real estate owned
category.
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- With tangible equity
declining further owing to losses recorded during the quarter, the Texas ratio
inched higher to 59.8% in 4Q09 against 58.0% in 3Q08. Further,
the Bank's interest earning assets are contracting as the loan
portfolio shrunk 2.4% (q-o-q) as the Bank continues to reduce exposure to
residential and commercial real estate.
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- Non-interest income declined 4.2% (q-o-q) to $742 mn from $775 mn in 3Q09 largely owing to lower mortgage production income due to higher estimated losses related to the potential repurchase of mortgage loans (a recurring theme in nearly all of the TARP recipient bank's Q4 results, including JP Morgan and Wells Fargo - see WFC 4Q09_Review- subscriber edition or the less intense, free version as well as the JPM 4Q09 review - public edition).
Next up, a look at the "new" Goldman Sachs valuation scenarios, more on the China short thesis debate, the Central and Eastern European short thesis and the macro/fundamental prospects of the simultaneous withdrawal of stimulus in both China and the US: Fed Declares Recovery for First Time, Prepares Ground for End to Stimulus . As I prepare this, the European financial markets are in the process of melting down. I have performed a decent amount of due diligence on my European shorts and will be putting them out shortly to subscirbers.
