by Calculated Risk on 5/07/2009 12:36:00 AM

Joint statement from Treasury, Fed, FDIC and Comptroller: The Treasury Capital Assistance Program and the Supervisory Capital Assessment Program

During this period of extraordinary economic uncertainty, the U.S. federal banking supervisors believe it to be important for the largest U.S. bank holding companies (BHCs) to have a capital buffer sufficient to withstand losses and sustain lending even in a significantly more adverse economic environment than is currently anticipated. In keeping with this aim, the Federal Reserve and other federal bank supervisors have been engaged in a comprehensive capital assessment exercise--known as the Supervisory Capital Assessment Program (SCAP)--with each of the 19 largest U.S. BHCs.

The SCAP will be completed this week and the results released publicly by the Federal Reserve Board on Thursday May 7th, 2009 at 5pm EDT. In this release, supervisors will report--under the SCAP "more adverse" scenario, for each of the 19 institutions individually and in the aggregate--their estimates of: losses and loss rates across select categories of loans; resources available to absorb those losses; and the resulting necessary additions to capital buffers. The estimates reported by the Federal Reserve represent values for a hypothetical 'what-if' scenario and are not forecasts of expected losses or revenues for the firms. Any BHC needing to augment its capital buffer at the conclusion of the SCAP will have until June 8th, 2009 to develop a detailed capital plan, and until November 9th, 2009 to implement that capital plan.
emphasis added

So the Fed will release the losses and loss rates for each of the 12 categories in outlined in the Fed White Paper. And these are the losses for the "more adverse" scenario.

There is much more ...

by Calculated Risk on 5/06/2009 08:01:00 PM

Here are some updates to the table: Morgan Stanley has been changed to needing $1.5 billion, Capital One passed, State Street needs an unspecified amount.

Name	Total Assets (Billions)	Stress Test Results
1. Bank of America	2,500	Needs $34 billion
2. JPMorgan Chase	2,175	Pass
3. Citigroup	1,947	Needs $5 billion
4. Wells Fargo	1,310	Needs $15 billion
5. Goldman Sachs	885	Pass
6. Morgan Stanley	659	Needs $1.5 billion
7. MetLife	502	Pass
8. PNC Financial Services	291	???
9. U.S. Bancorp	267	???
10. Bank of New York Mellon	238	Pass
11. GMAC	189	Needs $11.5 billion
12. SunTrust	189	???
13. State Street	177	Needs $$$
14. Capital One Financial Corp.	166	Pass
15. BB&T	152	???
16. Regions Financial Corp.	146	Needs $$$
17. American Express	126	Pass
18. Fifth Third Bancorp	120	Needs $3.3 billion (1)
19. KeyCorp	105	Needs $3.3 billion (1)

(1) Citi estimate. (ht Turbo)

by Calculated Risk on 5/06/2009 06:05:00 PM

From Reuters: US Senate expands credit lines to FDIC reserves

The U.S. Senate on Wednesday approved a measure to expand a government credit line for the Federal Deposit Insurance Corp ... The FDIC ... has been able to tap the Treasury Department for up to $30 billion since 1991. That credit line would be increased to $100 billion under the new bill.

The House of Representatives has already passed its version of the legislation ...

Besides raising the cap on FDIC borrowing, the bill gives the federal insurer a $500 billion credit limit that will sunset at the end of next year.

Part of this is for the PPIP, see: Sorkin's ‘No-Risk’ Insurance at F.D.I.C.

[The F.D.I.C. is] going to be insuring 85 percent of the debt, provided by the Treasury, that private investors will use to subsidize their acquisitions of toxic assets. The program ... is the equivalent of TARP 2.0. Only this time, Congress didn’t get a chance to vote.
...
The F.D.I.C. is insuring the program, called the Public-Private Investment Program, by using a special provision in its charter that allows it to take extraordinary steps when an “emergency determination by secretary of the Treasury” is made to mitigate “systemic risk.”

by Calculated Risk on 5/06/2009 04:30:00 PM

From Nick Timiraos at the WSJ: Another Sign of Foreclosure Trouble in California

The homeowner association delinquency rate can serve as a leading indicator of sorts because homeowners usually stop paying dues before they stop paying their mortgage. The 90-day delinquency rate on dues for the 260 homeowner associations in California managed by Merit Property Management jumped to 5.3% in March from 2.8% last June. Delinquencies first spiked to 2.6% in December 2007 from 0.8% in March 2007.

... The rising number of HOA delinquencies and the boost in pre-foreclosure notices could be a harbinger of things to come. “There’s reason to believe in California there may be a second wave of foreclosures,” [Andrew Schlegel, Merit communities financial vice president] says.

by Calculated Risk on 5/06/2009 02:32:00 PM

From MarketWatch: Morgan Stanley doesn't need more capital: report

From WSJ: J.P. Morgan, American Express Won't Need New Capital

[F]ederal banking regulators have informed Regions Financial Corp., a regional bank based in Birmingham, Ala., that it needs to raise new capital, according to a person familiar with the matter.

A spokesman at Regions declined to comment Wednesday. The size of the cushion that regulators told bank executives they need to protect Regions from potential losses wasn't immediately clear.

From Bloomberg: Bank of America, Citigroup, Wells Fargo, GMAC Need More Capital

Here is a scorecard by asset size (let me know if you hear of any other leaks - we will know it all tomorrow!):

Name	Total Assets (Billions)	Stress Test Results
1. Bank of America	2,500	Needs $34 billion
2. JPMorgan Chase	2,175	Pass
3. Citigroup	1,947	Needs $10 $5 billion
4. Wells Fargo	1,310	Needs $15 billion
5. Goldman Sachs	885	Pass
6. Morgan Stanley	659	Pass
7. MetLife	502	Pass
8. PNC Financial Services	291	???
9. U.S. Bancorp	267	???
10. Bank of New York Mellon	238	Pass
11. GMAC	189	Needs $11.5 billion
12. SunTrust	189	???
13. State Street	177	???
14. Capital One Financial Corp.	166	???
15. BB&T	152	???
16. Regions Financial Corp.	146	Needs $$$
17. American Express	126	Pass
18. Fifth Third Bancorp	120	Needs $3.3 billion (1)
19. KeyCorp	105	Needs $3.3 billion (1)

(1) Citi estimate. (ht Turbo)