Corus Bankshares, Inc. (CORS)

glbcpa59 (60.16) Submitted: 1/05/08 11:56 AM

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I have reviewed the September 10Q. If I take management at their word (conservative and good locations) I would like to look at the risk in Miami and get feed back from others regarding the construction loans.

Management indicates that they loan 55% of the expected selling price plus some cost over runs (lets say 15%) so lets call it 70% loan to expected value.


Average selling price for a condo in Miami in July 2007 was $762K (www.miamibeach411.com).

Using this price to expected loan value we would estimate loans per condo at $533K for the loans originated in 2005/6 construction origination period.

October average selling price was $496K. The bank would be under water if the original expected selling price was the actual of July 2007. But looking back to mid 2006 the average price was $570K. If management is as conservative as I think, this would put the loan to expected value at $399K. Twenty percent below the October average selling prices.

At September they had 3 problem loans in Florida so I assume Miami. Total problem loan had commitments to $277 million at September 2007. If they all go to nonperforming loans we could see a charge off of $65 million.

The numbers we saw for December new and existing sales are the bottom (650K new and 4800Kf or existing). The recover will not happen until late 2009 may be spring of 2010 as prices continue to adjust and the inventory is consumed.

CORS earning will erode as developments slow and the excess inventory is consumed. But I don’t see them having to close. Management/owners have authorized and are buying back stock and the 20+ day short position could prove very profitable.

I would like a shorts position on why I may be wrong.

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