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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: JakeStraw who wrote (21672)	7/15/2005 1:56:12 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78749

re CBH - earnings look good after the first glance. Deposits are up nicely but earnings growth lags asset growth, because interest cost rise much faster than interest income. on the negative side, we have CBH's high leverage (equity is only 6.2% of total assets and 5% are needed for well capitalized status) and the fact that CBH has moved about 8B$ from "securities available for sale" to "securities held to maturity" status. I believe the reason for that is that future LT interest rate would lead to losses for "securities held for sale" which are valued market to market, while "securities held to maturity" are simply valued at cost. This could become a big deal withy CBH's high leverage.