Relevant:
2009-03-02 — investopedia.com
We won't know the results of the assessment for several weeks, but we can look at the TCE ratios of the largest banks as of the end of 2008.
At 8.8%, Capital One Financial (NYSE:COF) has one of the highest ratios. However, its current TCE ratio is down from the 10% reported by the company just three months earlier. Northern Trust (Nasdaq:NTRS) has the second highest TCE ratio at 8.6%, which is up significantly. Meanwhile, Wells Fargo (NYSE:WFC) has one of the lowest TCE ratios, at 2.7%, which is less than half of the 6.1% it reported at the end of the third quarter. Considering that Wells Fargo has been regarded as one of the strongest large banks, this is surprising. Another surprise is Fifth Third Bancorp (Nasdaq:FITB), which reported a TCE ratio of 4.5%. This bank has been left for dead by the market and is down 89% from its 52-week high.
Remember TCE doesn't measure impaired assets a-la the Texas ratio or a "California" ratio (something accounting for REOs and second-lien loans); so actually Wells is in much worse shape and perhaps this is why Fifth Third has been trounced.
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