Individual bank records begin with a list of banks with distressed real estate that you arrived at by using one of the search options. Lists of banks found with the ‘Drill Down’ method will be sorted by the dollar volume of problems they have with a particular asset type or else they will be sorted alphabetically if you used the advanced search or the individual bank record will appear with then name search.
- Header
- Ratios
- Income
- Loans Held for Sale
- 30-89 Days Late
- 90+ Days Late
- Nonaccrual
- OREO
- Charge Offs
- Watch-List
- Tags
Basic Record Header
The basic bank information is situated at the top of the bank record page. This data is for bank headquarters only. In many cases banks have a number of branch and administrative offices. Locating the headquarters give you a good start to find decision makers.
Bank basics include the name of the bank, city, state and zip for their headquarters, the bank’s website, a Watch-list button, LinkedIn and Jigsaw buttons, Tags, the FDIC Certificate number, and the most recent reporting quarter.
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Capital Adequacy and Ratios
BankProspector tracks three (3) basic bank ratios.
- Tier 1 Leverage
- Tier 1 Risk Based = Tier 1 Capital Adequacy
- Total Risk Based = Tier 1 + Tier 2 Capital Adequacy
Regulators want the Tier 1 Risk Based ratio to be a minimum of 4%, though there is talk of this going higher. Banks showing a ratio below 4% (some say 6%) are deemed to be under capitalized. Tier 1 Capital plus Tier 2 Capital is the more common Capital Adequacy ratio known as Total Risk Based and this number should not be below 8% (some say 10%) for a bank to be considered to have sufficient capital. Members can search for banks with specific capital ratios by using the advanced search.
The danger in prospecting banks that have insufficient capital ratios is that you may well be wasting your time. Banks have balance sheets and the assets that they hold are on these balance sheets at their last appraised value. If that appraised value is above what the real market value is for the property (as is all too often the case) then a disposition at a market rate could adversely affect them. In many cases when a bank is severely under capitalized they will work to bring in deposits, merge with another bank, and/or enter into extended or creative workout negotiations with delinquent debtors.
The Leverage Ratio minimum is 3%.
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Real Estate Income
BankProspector tracks the real estate income from 1-4 Family Loans, All other Real Estate Loans, and the Net Gain or Loss on REO.
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Loans For Sale
Notes listed as ‘For Sale’ are not necessarily real estate notes nor are they necessarily the whole body of available notes for sale, we track them anyway.
- 30-89 Days Late
- 90+ Days Late
- Nonaccrual Loans
Very often a lender may be willing to entertain the sale of non-performing notes to investors or other lenders that are not reflected in these totals but may be reflected in the 90 Day Late or Non-accrual columns.
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Past due 30 through 89 days and still accruing
These loans are a precursor of things to come for the bank and while they’re a problem area and important they are not urgent.
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Past due 90 days or more and still accruing
Loans that are 90 days late or more are reported in this section by asset type. 90 Day Lates are good to know if you are prospecting pre-foreclosures, appraisal work, workout consulting, foreclosure auction or legal work, nonperforming notes for sale and more. At 90 days late the loans are a problem but they have not yet become critical, but the truth is that a very small amount of loans that become 90 days late ever get back on track. 90 Day late balances are a precursor to Non-accrual and eventually a sale or foreclosure.
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Nonaccrual
Nonaccrual loans are loans that are no longer accruing interest and/or are loans that have no realistic possibility of being repaid according to terms. These loans are almost certainly heading for foreclosure. An appraisal or BPO will likely be required for these loans in the not-too-distant future or sooner. Legal notice has likely been sent at this point or else the borrower may be looking for an extension or forbearance.
The same opportunities that exist at the 90 Day Late level exist here only now time is growing short and the pressure is on the bank and the borrower to work it out or else end up in foreclosure. Non-accrual loans are available for each asset type as well.
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OREO
OREO, also commonly referred to as REO is real estate acquired through foreclosure. These are bank owned properties and probably offer the broadest appeal to distressed real estate professionals. Appraisers, property managers, brokers, auctioneers, investors, contractors or developers and nearly anyone in the real estate business can find opportunities within the OREO balances of a bank. OREO stands for Other Real Estate Owned. This is bank owned property acquired through foreclosure.
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Charge-offs Calendar year-to-date
Charge-Offs may be a very good indicator as to the likelihood that a bank is willing to sell some of its distressed loans or bank owned real estate (OREO). Net Charge-Offs indicate that the bank is writing down or “charging off” losses in a particular category. Healthy charge-off numbers may indicate that the bank is preparing its balance sheet for market priced dispositions.
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Watchlist
The “Watch-list” option is useful for members who are concentrating on a specific set of banks over a period of time. A watch-list allows a member to quickly return to the application and avoid the searching process. In the future BankProspector will be providing aggregated stats for members on their watch-listed banks.
After a bank has been added to the ‘Watch-list’ the link changes to “[Remove from Watch-list]“. “My Bank Watch-List” can be reached from the sidebar navigation at any time. Click on the bank name from your watch-list to visit the bank record.
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Tags
Tags are a free-form general categorization. The most popular tags are shown at the bottom of the front page available to the public. All your tags are located on the left sidebar. Click on a tag to see a list of banks that have been tagged (with that tag).
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