Markets & Finance  Misplaced Fears for Regional Banks?  S&P says
concerns about "Alt-A" mortgages may be distracting investors
from the larger issues  From Standard & Poor's Equity
ResearchThe good news is the regional banks followed by Standard
& Poor's are well-insulated from the subprime lending market
crisis. The question is: How exposed is this group to "Alt-A"
mortgages, which cover the large middle ground between subprime
and prime loans?  Investors are worried about regional bank
exposure to Alt-A mortgages, given M&T Bank's (MTB; ranked 3
STARS, hold) profit warning on Mar. 30. The bank indicated the
market for the Alt-A loans that it packages and securitizes has
cooled off, leading to lower prices and lower mark-to-market
prices for the loans that aren't sold. M&T Bank says it's
contractually liable to buy back nonperforming Alt-A mortgages.
The bank also warned that deposit costs would be higher than
expected, leading to further net interest margin compression.
Alt-A loans are issued to customers