Veteran Wall Street analyst Richard Bove caused quite a stir among bankers last summer with a research note that called out 24 mostly small and midsize financial institutions. Bove said they were endangered by rising levels of delinquent mortgages and other toxic assets.

The decision to publish that research has cost Bove plenty. One of the banks he identified as troubled sued him last July. To protect his firm, he quit and joined another company, and he has since been shouldering a monthly legal bill of some $50,000, he says. But he's not backing down. Indeed, in a new report sent to clients Wednesday, he sought to show that most of the banks he criticized more than a year ago haven't fared well since.

Of the two dozen banks Bove cited in his original note -- titled "Who Is Next?" -- seven have failed, and the shares of all but two of the those still standing have fallen, some dramatically, Bove's new research note found. Bove, now an analyst with Rochdale Securities, wasn't immediately available for comment.

Last year, he used two measures of nonperforming assets (loans that aren't being paid back as agreed) to identify banks that faced possible losses from a souring real estate market. He then compiled two lists totaling 24 banks that were in danger according to each metric.

Five banks fell short of Bove's criteria on both counts: BankUnited Financial (BKUNQ), Corus Bancshares (CORS), Doral Financial (DRL), Downey Financial (DWNFQ) and FirstFed Financial (FFED).

Three of the five -- BankUnited, Corus and Downey -- have since been seized by regulators and shuttered, he pointed out in Wednesday's note. FirstFed's stock has tumbled 94 percent since then, and Doral's has dropped 78.4 percent. Last summer, executives at the banks said their institutions were well-insulated from further real estate fallout.

Even though Bove was waving red flags over some of the biggest bank busts of the financial crisis, perhaps the most notable company he identified early as potentially troubled was BankAtlantic Bancorp (;BBX), the Florida-based bank holding company that sued Bove for defamation and negligence.

A BankAtlantic spokeswoman said CEO Alan B. Levan was traveling and wasn't immediately available to comment on the latest note. Bove may be under legal duress, but he clearly hasn't lost his spunk.


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