On Sep 30th 2010:
* Book value per share: $21.17
* Tangible book value per share: $12.91
* Earning Asset: $1902 billion ( Total Asset: $2456 billion)
* Deposit: $982 billion
* Shareholder Equity: $232 billion
About "Mortgage banking"
* Total mortgage service fee: $3.7 billion ( typically 25 - 45 basis points
of the unpaid principal balance)
* about 45% are non-conforming loans, 55% sold to Fannie Mae
"Mortgage Banking" Risk analysis:
* if 20% of the non-conforming were forced to be bought back, the bank would
have to take loss on those non-conforming loans since only those losing
loans will be bought back.
* The loss of those bought back losing loans could go as high as 25%
Based on the worst case above, the maximum total potential "mortgage banking
" loss would be estimated to be around $60 billion
On this worst case, the shareholder equity needs to be reduced by $60
billion ( or 25.8% )
On Sep 30th, the stock was closed at $13.10, so the worst case of all is to
have a price declined to $9.72.
Positive side analysis:
(1) On Sep 30th, the market price of $13.10 already priced in some of the
risks analyzed above. So the starting price could be $14 instead of $13.10.
When $14 was used, the lowest price would be $10.40
(2) The bank might find a way to avoid buying back 20% non-conforming loan.
If only 10% were forced to be bought back, the lowest price would be $11.40
(3) The bank might not need to take 25% loss on those bought back loans.
If only 12.5% loss were taking on average, the lowest price would be $11.40
以上都是个人意见，也许有很多错误,抛专引玉，仅供讨论。
