December 30, 2008

Third-quarter data from the Federal Deposit Insurance Corporation suggest that banks are relatively well capitalized, especially when half of the industry's reserves are added back into an estimate of common equity, analyst Dick Bove explained.

Government investment and other programs to support the financial-services industry, the largest since the Great Depression, may also help bolster the value of some of the securities held by banks, Bove said."The decline in bank stock prices has been excessive," he wrote in a note to investors. "Many of these stocks represent excellent values."