by PJ on 8/15/2008 09:04:00 AM

Downey Financial's latest monthly stats are out, and some interesting trends pop out. Deposit outflows, for one, and the company's decision to advertise to get deposits, for another:

Although, as previously reported, Downey experienced elevated levels of deposit withdrawals in July, deposit flows so far in August have stabilized. In fact, deposit balances have increased, recovering about 45% of the net deposit outflow that occurred in July. The bulk of the inflow is in certificates of deposit with 6 to 18 months duration. This increase was due, in part, to management's decision to reinstitute deposit advertising following a long period of not doing so.

Deposits declined by $507 million in July to $9.4 billion at month end, with the majority of the decline related to uninsured deposit amounts. Management believes this occurred as a result of depositor concern over deposit insurance coverage following the failure of a large California financial institution as well as publicity and speculation regarding Downey and the performance of its loan portfolio. [emphasis added]

Also, the first drop in NPAs relative to assets in at least a year:

Non-performing assets increased 3% during July, the lowest monthly increase this year. Due to an increase in total assets during July, the ratio of non-performing assets to assets declined from 15.50% at June 30, 2008, to 15.08%.

My own feeling here is that the July results are better than expected. Not that Downey's out of the woods, by any stretch...