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Banks that can weather a storm

3,745 Views | 22 Replies | Last: 1 yr ago by YouBet
Brewmaster
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6:29p, 4/17/23
AG
Looking for super low unrealized losses in bonds
low to non existent exposure in CRE

I recently did some looking and found out my bank is quite underwater in unrealized losses (60% of assets), USAA.

I'm in B/CS, the best I've found local is Prosperity, but am open to ideas. I think they're just under 10%. They do have some CRE exposure though.

https://cdr.ffiec.gov/public/ManageFacsimiles.aspx#

and this is credit to Bonfire1996. I go here, (link above), click on call report and change date to 12/31, look for RI-A form. You can see unrealized losses on there in relation to capital.
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atmtws
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6:56p, 4/17/23
AG
Does Frost have any branches there yet? I think they have one in Conroe. If I recall, in the original thread many posters were speaking well on their exposure on this whole situation.
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ac04
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8:01p, 4/17/23
much easier to just use a bank the government has deemed too big to fail. none of their balance sheets look very good, have to figure out which ones will get access to the money printer when **** inevitably hits the fan.
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Troglodyte
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8:14p, 4/17/23
AG
I'm a little confused. Are you looking for a bank to deposit large amounts over FDIC insured limits or a bank to invest in?

If large deposits, any big bank will do. Government will insure.

If to invest in, if the bank isn't invested in high quality securities or commercial real estate, what do you think they are invested in? Do you want a bank that's heavy in car loans, consumer credit, unsecured commercial, secured commercial that's not a real asset?? I agree that I would be nervous if they were invested in older office buildings and maybe hotels. Other than that, a well managed bank in CRE is probably on the safer side.
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MS08
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In reply to Brewmaster • 8:30p, 4/17/23
AG
Could open an account with Stifel. Their Smart Savings account rate is 4.5% right now. Minimum $100k investment. Not sure if you have to have a brokerage account too but you could PM me if interested and I could connect with you with my advisor there.
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Ag06Law
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6:34a, 4/18/23
AG
Unless you're putting in more than $250k, this really is not anything to devote any real brainpower to. Even if you're putting in more, the government has proven that it will bail out just about any banks.
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Brewmaster
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In reply to ac04 • 8:59a, 4/18/23
AG
ac04 said:
much easier to just use a bank the government has deemed too big to fail. none of their balance sheets look very good, have to figure out which ones will get access to the money printer when **** inevitably hits the fan.
I have considered this... Bank of America and Wells Fargo are around 6% unrealized losses vs capital.
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Brewmaster
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In reply to Troglodyte • 9:05a, 4/18/23
AG
Troglodyte said:
I'm a little confused. Are you looking for a bank to deposit large amounts over FDIC insured limits or a bank to invest in?

If large deposits, any big bank will do. Government will insure.

If to invest in, if the bank isn't invested in high quality securities or commercial real estate, what do you think they are invested in? Do you want a bank that's heavy in car loans, consumer credit, unsecured commercial, secured commercial that's not a real asset?? I agree that I would be nervous if they were invested in older office buildings and maybe hotels. Other than that, a well managed bank in CRE is probably on the safer side.
FDIC has 225 billion for insuring, there is over 700 billion currently in unrealized losses (in bonds alone), this does not include CRE that is going the wrong direction and total deposits around 22 trillion. So the FDIC is backing 22 trillion with a whopping 225 billion.
When it hits the fan, that's a big Ooops!

If nothing else, time to buy more silver and gold.
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cryption
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9:53a, 4/18/23
I'm suspecting something like JP Morgan will weather the coming storm. Govt considers them too big to fail, lots of wealthy people have their money with them, and they'll end up buying local / regional banks that fail. I can see this whole banking thing causing a consolidation of banking to a few of the biggest players - and I reckon JP is one of them
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FincAg
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1:55p, 4/18/23
AG
Any bank with assets above $500B I would be fine with using. Anything less is in the acquire, merge, fail category.
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jagvocate
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2:04p, 4/18/23
AG
Anyone have a perspective on USAA FSB? Assets 'only' in the $100-50 Billion range
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Brush Country Ag
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In reply to jagvocate • 2:21p, 4/18/23
AG
jagvocate said:
Anyone have a perspective on USAA FSB? Assets 'only' in the $100-50 Billion range


Interested here. With clients being military oriented, would that not have some influence on stability?
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Stive
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In reply to Brewmaster • 2:42p, 4/18/23
AG
To be fair: if we get into a position where the FDIC burns through their entire position AND the federal government is in a position where it can not further assist or just refuses to do so, you'll have much bigger problems on your hands than whatever your balance was in the bank.
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itsyourboypookie
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6:46p, 4/18/23
TFNB in Waco. We have 2 million in deposits with them right now with no worries. Also just bought a 4.75% interest CD at Cadence.
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BearJew13
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9:37p, 4/18/23
AG
CMBS and office (large majority of CMBS) exposure is where the biggest risk is right now, as liquidity has dried up in that market. Somewhat similar to the commercial paper market in '08. The money center banks have the largest exposure to CMBS as opposed to local/regional/super regionals. The problem is the headlines don't actually break down the risk in CRE, it all just gets lumped together. That's why we have people like OP making mountains out of molehills, and not understanding which is which.

Unrealized losses are fine to carry on the books, until they become impaired losses because the institution has to fire sale because they are in a distressed position. That one indicator doesn't tell you in a vacuum, you need to understand the equity position of the bank.

If your risk analysis is the FDIC having to pay out insurance to every depositor on every deposited dollar at the same time, you may as well invest in some good bourbon, so at least you can enjoy watching the apocalypse.
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fka ftc
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In reply to atmtws • 10:50a, 4/19/23
atmtws said:
Does Frost have any branches there yet? I think they have one in Conroe. If I recall, in the original thread many posters were speaking well on their exposure on this whole situation.
I've banked with Frost for nearly 15 years. They are ultra conservative and are well prepared to weather the storms brewing.

They do not do mortgages and no car loans (used to be the case, not sure if still is). Commercial underwriting is pretty strict and they actively diversify away from struggling industries.

But they are a big bank and may not meet everyone's needs.
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jja79
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In reply to fka ftc • 10:03a, 4/20/23
AG
Frost doesn't do 1st lien mortgages presently but they do lots of 2nd lien mortgages, home improvement loans (most liberal guidelines in the industry) and HELOCs. They announced in February they were going to bring back mortgages but I don't know if that's still the case. Good bank in my opinion.
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BQ`81
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9:56p, 4/21/23
AG
Frost does have a bank location in both College Station and Bryan.
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fka ftc
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In reply to BQ`81 • 7:12a, 4/22/23
BQ`81 said:
Frost does have a bank location in both College Station and Bryan.


They have embarked on a huge growth plan. Heck, we are finally getting a branch in our suburban DFW town. ATMs in HEBs, Walgreens and CVS have made that part serviceable over the past few years.

Good bank.
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Brewmaster
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In reply to BearJew13 • 10:18a, 5/10/23
AG
BearJew13 said:
CMBS and office (large majority of CMBS) exposure is where the biggest risk is right now, as liquidity has dried up in that market. Somewhat similar to the commercial paper market in '08. The money center banks have the largest exposure to CMBS as opposed to local/regional/super regionals. The problem is the headlines don't actually break down the risk in CRE, it all just gets lumped together. That's why we have people like OP making mountains out of molehills, and not understanding which is which.

Unrealized losses are fine to carry on the books, until they become impaired losses because the institution has to fire sale because they are in a distressed position. That one indicator doesn't tell you in a vacuum, you need to understand the equity position of the bank.

If your risk analysis is the FDIC having to pay out insurance to every depositor on every deposited dollar at the same time, you may as well invest in some good bourbon, so at least you can enjoy watching the apocalypse.
But there are banks that have ample liquidity now and those that don't. Unrealized losses won't be fine soon, this is shaping up to be '08, potentially worse.

Frost was the winner winner chicken dinner FWIW. Thanks all! After talking to another friend and poster, they are set up to weather this storm (from a financial and numbers perspective). Their customer service are a nice bonus though!
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Stive
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In reply to Brewmaster • 11:20a, 5/10/23
AG
perma Brew doomster said:
BearJew13 said:
CMBS and office (large majority of CMBS) exposure is where the biggest risk is right now, as liquidity has dried up in that market. Somewhat similar to the commercial paper market in '08. The money center banks have the largest exposure to CMBS as opposed to local/regional/super regionals. The problem is the headlines don't actually break down the risk in CRE, it all just gets lumped together. That's why we have people like OP making mountains out of molehills, and not understanding which is which.

Unrealized losses are fine to carry on the books, until they become impaired losses because the institution has to fire sale because they are in a distressed position. That one indicator doesn't tell you in a vacuum, you need to understand the equity position of the bank.

If your risk analysis is the FDIC having to pay out insurance to every depositor on every deposited dollar at the same time, you may as well invest in some good bourbon, so at least you can enjoy watching the apocalypse.
But there are banks that have ample liquidity now and those that don't. Unrealized losses won't be fine soon, this is shaping up to be '08, potentially worse.

Frost was the winner winner chicken dinner FWIW. Thanks all! After talking to another friend and poster, they are set up to weather this storm (from a financial and numbers perspective). Their customer service are a nice bonus though!
I've got an older (slightly crazy) relative that pulled all of their savings out of Frost last week, and stuck it in a shoe box on their closet shelf because "the news told them that all of the banks are going to fail and FDIC won't have enough money to pay everyone".

Me: so if that happens and it gets that bad, do you really think your shoebox of $20's is going to save you?

Them: Um.....well.........I don't know about all that........
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Brewmaster
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In reply to Stive • 11:31a, 5/10/23
AG
Wow. Torbush wow. Tell them to at least invest some of the shoe box into gold and silver.

pulling it out of the best bank I could find, not smart. Frost will make it too, even when the **** hits the fan.
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YouBet
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In reply to Ag06Law • 12:51p, 5/10/23
AG
Ag06Law said:
Unless you're putting in more than $250k, this really is not anything to devote any real brainpower to. Even if you're putting in more, the government has proven that it will bail out just about any banks.
Yeah, I wouldn't put as much faith into that as you are. It's the entire reason there has been almost $1T in deposits that have abandoned regional banks in favor of TBTF banks. The government has signaled they are going to pick winners and losers and the winners are going to be the big boys and those with "favored nation status", if you will.

Actually just had this conversation with a banking friend on Tuesday morning who works at a regional bank. He said the industry is basically on standstill waiting for the next shoe to drop. The flight of cash has significantly impacted the regionals and altered their customer strategy. He said their balance sheet is in pretty good shape but they are being extremely conservative right now with all of this uncertainty.
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