Veteran Wall Street analyst Richard Bove worked bank executives -- especially those at BankAtlantic Bancorp (NYSE:BBX) -- into a tizzy last year with a
research note from Ladenburg Thalmann & Co. that called out 24 commercial banks for rising levels of delinquent mortgages and other toxic assets. Over a year later, it seems Bove, who is still dealing with a BankAtlantic defamation suit, may be vindicated by the facts that seven of the 24 have failed, and 15 of the remaining 17 have watched their share prices decline, according to Bove's follow-up with his new firm Rochdale Securities
via DailyFinance.
In fact, Bove's report foreshadowed some of the more spectacular bank failures of the year: BankUnited Financial, Corus Bancshares and Downey Financial. The three failures cost the Federal Deposit Insurance Corp.'s Deposit Insurance Fund $8 billion in total.
Two other banks that were facing similar troubles as BankUnited, Corus and Downey over nonperforming loans were Doral Financial (NYSE:DRL) and FirstFed Financial (NASDAQ:FFED) -- neither have failed yet, but Bove would be further vindicated if they did.
So far Bove has been on the money with other predictions, such as his
suggestion the FDIC will seize 150 to 200 banks this year. As of Nov. 2, the agency
has seized 115 banks and is on pace to meet his estimates. -
Matthew Wurtzel
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