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#223639 - 08/04/04 07:18 PM Negative earnings
Anonymous
Unregistered

If a bank has negative earnings for 2 quarters, is there mandatory supervisory action required? Where can I find info on this?

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Audit
#223640 - 08/04/04 07:54 PM Re: Negative earnings
Pale Rider Offline
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Pale Rider
Joined: Aug 2002
Posts: 34,318
under the Lone Star
Look to your regulator's capital rules, that is where the mandatory supervisory intervention rules are found. I do not believe earnings, or the lack thereof, result in automatic action by the regulators, unless you are a state chartered shop and you find them there.
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#223641 - 08/04/04 08:40 PM Re: Negative earnings
EdOils Offline
Platinum Poster
EdOils
Joined: Jan 2004
Posts: 553
Louisiana
I don't know of any action for negative earnings (de novo banks have many quarters of losses), but Don is right about the capital levels.

Your regulator monitors your bank quarterly. I would be expecting a call from them soon. However, you could be proactive and call or write them to explain.
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You gain education by reading the fine print. You gain experience by not.

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#223642 - 08/06/04 10:45 PM Re: Negative earnings
Paragon Offline
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Paragon
Joined: Dec 2003
Posts: 2,164
Two quarters of negative earnings don't mean much, normally. It's all about the level of capital retained - not negative earnings. Of course, continuing negative trends will get regulatory attention as Call Reports are filled or regular visits come about.

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#223643 - 12/28/04 03:12 PM Re: Negative earnings
Anonymous
Unregistered

what is the implication of a negative earning for a start up project that extends from year 0 to 4? Can such a company still set aside funds for investment during this priod?

What are the factors that would account for such high level of negative earnings?

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#223644 - 12/28/04 03:17 PM Re: Negative earnings
Anonymous
Unregistered

what is the implication of a negative earning for a start up project that extends from year 0 to 4? Can such a company still set aside funds for investment during this priod?

What are the factors that would account for such high level of negative earnings?

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#223645 - 12/28/04 04:30 PM Re: Negative earnings
Creditcop Offline
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Creditcop
Joined: Sep 2002
Posts: 1,685
Indiana
It depends on the cause of the negative earnings. It is short term events or is it a preview of a long term issue.

I am sure that the examiners have or will be having that conversation with management and it could lead to an exam and then action. Usually, any action is the result of an exam and not just negative earnings.

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