5 Banks At Risk of a Commercial Real Estate Double Dip
3. Synovus Financial
Shares of Georgia-based Synovus (SNV) are down 20% year to date.
Synovus had a commercial real estate exposure of $11.5 billion as of the March 31, 2011, about 330% of its core capital. Non-performing CRE loans accounted for about 20% of its core capital.Synovus is exposed to the SouthEast where real estate has taken the worst hit. Georgia and Florida, accounted for about approximately 53% and 13% of the total loan portfolio by geographic concentration. JPMorgan analysts said in a note in May that Synovus is "likely to remain challenged on the growth front given a remixing of the loan portfolio away from C&D (construction and development) loans and more into C&I(commercial and industrial). In the first quarter, average loans declined at a 15% annualized pace. With the market seemingly very focused on top-line organic growth potential, we believe it's unlikely the market will take a more favorable view of SNV's growth prospects over the near term," the analysts wrote. Wunderlich Securities recently downgraded the stock to a hold, citing capital constraints." We believe that Synovus' earnings power beyond this credit cycle will be greatly constrained by the potential need to raise significant amounts of common equity in order to exit the TARP program," the analyst wrote in a note. Out of the 29 analysts covering the stock, four have a buy rating, 21 a hold rating and four have a sell call on the stock.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV