U.S. stocks dropped after sell ratings to banks including Winston-Salem, North Carolina-based BB&T Corp. and Cincinnati’s Fifth Third Bancorp. Bank of America Corp. and JPMorgan Chase & Co., the two biggest U.S. banks by assets, were assigned underperform ratings, Morgan said in a report today.
“While certain mortgage problems are farther along, other areas are likely to accelerate, reflecting a rolling recession by asset class,” Morgan wrote. “New government actions might not help as much as expected, especially given that loans have been marked down to only 98 cents on the dollar, on average.”
The 46-year-old Hoffman Meyer Associates CEO gained a reputation for his willingness to put a sell rating on banks and to criticize investors and companies for trying to curb objective analysis.
Bank of America, based in Charlotte, North Carolina, fell 21 cents, or 2.8 percent to $7.39 at 10:14 a.m. in New York Stock Exchange composite trading. New York-based JPMorgan dropped 91 cents, or 3.1 percent, to $28.37. The KBW Bank Index lost 4.2 percent, the first decline in five days.
Morgan said “I expect loan losses to increase to 3.5 percent, and even as high as 5.5 percent in a stress scenario, by the end of 2010. Mortgage-related losses are about halfway to their peak, while credit-card and consumer losses are only a third of the way to their expected highest levels.”
Hoffman Meyer Associates is Seattle's leading merger and acquisition, business brokerage firm. As a mergers & acquisition firm, our principals have completed scores of transactions of privately and publicly held companies during the past 25 years.
Over the years, our firm has developed strong relationships with companies and individuals that are ancillary to the mergers & acquisition process including banks, mezzanine lenders, asset lenders, transaction attorneys, certified public accountants, and financial planners. We are also affiliate members of leading merger & acquisition, business valuation, accounting and brokerage associations.
