Which bank is in trouble?

A big bank is in trouble, and no one knows which one or why

https://newsakmi.com/news/finance/banking/a-big-bank-is-in-t…

Fidelity no longer using Bank of America

https://www.reddit.com/r/Superstonk/comments/twfkuw/got_this…

Is a drop in Bank of America’s share prices cause for concern? Here’s what analysts say

https://www.bizjournals.com/charlotte/news/2022/03/11/bank-o…

Interesting!

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Interesting source there, News AKMI.

Let’s take a look at their About page, here:
https://newsakmi.com/about-us/

More specifically, let’s look at the Terms and Conditions

It could be good in the event you can read these phrases of use fastidiously earlier than utilizing our web site and content material (of News AKMI). By getting to make use of and moreover using the web site (aside from to peruse these phrases of utilization simply because) you might be confirming and agree to those phrases of use, which may change on occasion as talked about out under subsequent.

Yes, that’s actually what it says. And it goes on like that with poorly auto-translated gibberish.

So I have some concerns about them as a web site.

However

I was able to find the chart mentioned in the linked article directly from the FDIC. Page 4 of their Quarterly Bank Profile for the 4th quarter of 2021. https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/…

So the article passes a very basic fact check. There’s some concerns here about the site, but I can’t immediately find a problem with the article.

Let’s go on to look at the article itself.

Basically, it notes that there’s an unusual change in the data reporting on troubled banks. The number of troubled banks dropped from 46 to 44. But the total assets of troubled banks went up by about $120 billion. That would seem to indicate some good sized, middle tier bank is under some pressure.

But then your post goes on to talk about Bank of America. Why did you choose to talk about them? B of A has something like 2 trillion of assets. They are almost certainly not the new bank on the FDIC’s list. https://www.mx.com/moneysummit/biggest-banks-by-asset-size-u…

If you scroll down the list in that last link to banks with a bit more than 120 billion in assets, you’ll find much better suspects. There’s a lot to consider there, so I won’t even hazard a guess. I’ll just note that B of A is an order of magnitude off from where one would be looking for a bank fitting the description of this particular troubled bank.

And then you have to think a bit more. All we can surmise from the given data is that at least 3 banks dropped off the list and at least one was added. It could be 4 pretty small banks that fell off the list and two banks in the 60-70 billion in assets range that were added. Or any number of other possibilities.

The only think I can be pretty sure of is that any bank with more than $177 billion in assets is not going to be on the list of troubled banks. That’s the total of the assets of all banks on the FDIC’s list. And that absolutely, positively leaves B of A out of the discussion.

–Peter

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Hi Peter

It might not be B of A. However, I’m a Chartered Accountant (USA - CPA) and know how meaningless accounts can sometimes be, particularly when times get difficult.

I remember Citibank before 2008. From memory it had about $140 billion on its balance sheet and $3 trillion in assets but when it all went wrong the US government had to ring fence over $300 billion of toxic assets. It was the off balance sheet over the counter derivatives that did for them I think (can’t remember exactly).

Banks’ assets and liabilities are like the iceburg, mainly hidden!

https://seekingalpha.com/article/107523-citis-underwhelming-…

It might not be B of A.

I’ll be a little more blunt. There’s no chance at all that it’s B of A. None. Nada. Zilch. Nought.

However, I’m a Chartered Accountant (USA - CPA)

Funny you should mention that. I’m a CPA here in the colonies. I’m sure you won’t have too much trouble reading financial statements.

and know how meaningless accounts can sometimes be, particularly when times get difficult.

Yeah. If accounts in your country can be off by an order of magnitude when reporting to regulatory authorities, y’all are havin’ some serious problems. It’s a load of tosh.

Banks’ assets and liabilities are like the iceburg, mainly hidden!

https://seekingalpha.com/article/107523-citis-underwhelming-…

That article is from 2008. We’ve learned a lot of lessons since then. I’m not going to argue that banks don’t hide stuff. They probably do. But B of A themselves say they have 3 trillion in assets. Here’s their latest annual report, with the financial statements way towards the back: https://d1io3yog0oux5.cloudfront.net/_5662f0950108da29cf6757…

The balance sheet is on page 130 of the PDF. Feel free to look for yourself. Since you’re a Chartered Accountant, you’ll figure out their total assets pretty quickly. If they were hiding assets, their real assets would be MORE than 3 trillion.

With that as the publicly available info, the FDIC isn’t going to list them at 130 or 140 billion when the bank publicly states they have 3 trillion in assets. Again, I’m not going to argue that we don’t have some problems on this side of the pond. But the problems aren’t THAT big.

So your attempts to disparage B of A are badly misdirected. Again, B of A probably has some issues. But they are NOT the bank that has been added to the FDIC list of troubled institutions.

–Peter

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