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From the last 10K I did a search

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MWM Member Level  Friday, 06/11/10 10:39:48 AM
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From the last 10K I did a search for the word Florida, very interesting to ay the least...


On February 1, 2010, S&P downgraded our senior, long-term debt Bank and Parent Company ratings from A- and BBB+, respectively, to BBB+ and BBB, respectively. Our short-term ratings remained unchanged at A-2. S&P cited expectations of continued stress in and high exposure to residential mortgages, especially in Florida, as the primary factor in its decision to downgrade our long-term ratings. However, concurrent with the downgrade, S&P changed the outlook on our credit ratings to “stable” noting our strong franchise, good liquidity and funding profile, and commercial loan portfolio performance that was in line with their expectations. Our business activities have not been materially impacted as a result of this recent downgrade by S&P.

In addition, we experienced some weakness in our commercial client base, particularly those in more cyclically sensitive industries, and in our small business portfolio, and we expect that we will continue to see stress in asset quality in the commercial portfolio. The $1.7 billion increase in net charge-offs during the year was primarily related to residential mortgages, large corporate borrowers in economically cyclical industries, and the resolution of loan workouts related to the home builder portfolio. Our nonperforming loans grew by $1.5 billion during 2009, which is a result of the economic environment causing increased client defaults on their loans and extended disposition times on our consumer loans secured by residential real estate. Given the extended timelines to foreclose, especially in Florida, we expect that our nonperforming loan levels will remain elevated throughout 2010.

Nonperforming residential mortgages are primarily collateralized by one-to-four family residential properties. Approximately 84% of the nonperforming loans relate to properties in our footprint; approximately 52% of such nonperforming loans are in Florida. Approximately 75% of the nonperforming residential mortgages have been on nonaccrual status for at least six months. We have reached a point where growth in residential mortgage nonperforming loans has slowed as we are approaching the equilibrium point where the nonperforming loan outflow from foreclosures is offsetting the inflow from new nonperforming loans. Approximately 52% of the nonperforming home equity lines were from lines originated by third parties, lines in Florida with combined LTVs greater than 80%, or lines in other states with combined LTVs greater than 90%. Beginning in 2006, we tightened the underwriting standards applicable to many of the residential loan products offered.

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