{"id":16567,"date":"2016-01-16T14:54:45","date_gmt":"2016-01-16T19:54:45","guid":{"rendered":"http:\/\/olduvai.ca\/?p=16567"},"modified":"2016-01-16T14:54:45","modified_gmt":"2016-01-16T19:54:45","slug":"exclusive-dallas-fed-quietly-suspends-energy-mark-to-market-on-default-contagion-fears","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=16567","title":{"rendered":"Exclusive: Dallas Fed Quietly Suspends Energy Mark-To-Market On Default Contagion Fears"},"content":{"rendered":"<h3 class=\"title\"><a href=\"http:\/\/www.zerohedge.com\/news\/2016-01-16\/exclusive-dallas-fed-quietly-suspends-energy-mark-market-tells-banks-not-force-shale\" target=\"_blank\">Exclusive: Dallas Fed Quietly Suspends Energy Mark-To-Market On Default Contagion Fears<\/a><\/h3>\n<div class=\"tabs\">Earlier this week, before first JPM and then Wells Fargo revealed that not all is well when it comes to bank energy loan exposure, a small Tulsa-based lender, BOK Financial, said that its fourth-quarter earnings\u00a0<a href=\"http:\/\/www.zerohedge.com\/news\/2016-01-13\/start-regional-oklahoma-bank-plunges-after-admitting-it-underreserved-energy-losses\">would miss analysts\u2019 expectations\u00a0<\/a>because its loan-loss provisions would be higher than expected as a result of a\u00a0<strong>single\u00a0<\/strong>unidentified energy-industry borrower. This is what the bank said:<\/div>\n<div class=\"node sticky\">\n<div class=\"content\">\n<blockquote>\n<div class=\"quote_start\">\u201cA single borrower reported steeper than expected production declines and higher lease operating expenses, leading to an impairment on the loan. In addition, as we noted at the start of the commodities downturn in late 2014, we expected credit migration in the energy portfolio throughout the cycle and an increased risk of loss if commodity prices did not recover to a normalized level within one year. As we are now into the second year of the downturn, during the fourth quarter we continued to see credit grade migration and increased impairment in our energy portfolio. The combination of factors necessitated a higher level of provision expense.&#8221;<\/div>\n<\/blockquote>\n<p>Another bank, this time the far larger Regions Financial, said its fourth-quarter charge-offs jumped $18 million from the prior quarter to $78 million, largely because of problems with a single unspecified energy borrower. More than one-quarter of Regions\u2019 energy loans were classified as \u201ccriticized\u201d at the end of the fourth quarter.<\/p>\n<p>It didn&#8217;t stop there and\u00a0<a href=\"http:\/\/www.wsj.com\/articles\/more-banks-take-hits-on-energy-loans-1452890416\">and as the WSJ added<\/a>, &#8220;It\u2019s starting to spread&#8221; according to William Demchak, chief executive of PNC Financial Services Group Inc. on a conference call after the bank\u2019s earnings were announced. Credit issues from low energy prices are affecting &#8220;anybody who was in the game as the oil boom started,\u201d he said. PNC said charge-offs rose in the fourth quarter from the prior quarter but didn\u2019t specify whether that was due to issues in its relatively small $2.6 billion oil-and-gas portfolio.<\/p>\n<\/div>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Exclusive: Dallas Fed Quietly Suspends Energy Mark-To-Market On Default Contagion Fears Earlier this week, before first JPM and then Wells Fargo revealed that not all is well when it comes to bank energy loan exposure, a small Tulsa-based lender, BOK Financial, said that its fourth-quarter earnings\u00a0would miss analysts\u2019 expectations\u00a0because its loan-loss provisions would be higher [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[3730,200,376,4714,9755,11764,11765,4431,3892,4318],"class_list":["post-16567","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-dallas-fed","tag-default","tag-goldman-sachs","tag-jamie-dimon","tag-reflexivity","tag-regional-banks","tag-regions-financial","tag-warren-buffett","tag-wells-fargo","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16567","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16567"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16567\/revisions"}],"predecessor-version":[{"id":16568,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16567\/revisions\/16568"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16567"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16567"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16567"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}