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HFF's Tom Didio

'There are still plenty of solid banks that will continue to generate good earnings.'

By Brianne Harrison | Updated on July 28, 2008

DO YOU EXPECT MORE BANKS TO GO SOUTH?

It seems like the hits just keep coming. First Bear Stearns took a dive, then Fannie Mae and Freddie Mac hit the rocks, followed by dismal news of losses from Washington Mutual and Wachovia. And if our poll respondents are correct, we haven’t hit bottom yet. A staggering 83% predict more banks will go south before this is all over. Only 17% think we’re over the hump. Tom Didio, senior managing director with Holliday Fenoglio Fowler, takes a balanced view of the matter. Here are his thoughts:

“I expect some of the more aggressive banks may have further quarters of depressed earnings and losses, but you have to be cautious in terms of projecting into the future. There are still plenty of solid banks that have made good loans over the years and they will continue to generate good earnings. Banks like Wells Fargo that have good asset bases can withstand a downturn in the market. You have to look at the good and the bad. Everyone wants to jump on the bandwagon when there are valuation issues like Wachovia, Bear Stearns and Washington Mutual, but I think there are a lot of banks out there that are making quality loans because they have good borrowers.

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