Saturday, April 09, 2011

Unofficial Problem Bank list at 982 Institutions

by Bill McBride on 4/09/2011 08:32:00 AM

Note: this is an unofficial list of Problem Banks compiled only from public sources.

Here is the unofficial problem bank list for Apr 8, 2011.

Changes and comments from surferdude808:

After a quiet week last week, activity picked-up on the Unofficial Problem Bank List as there were five removals and two additions. The changes results in the list having 982 institutions with assets of $433.2 billion compared with last week's total of 985 institutions and assets of $431.1 billion.

The five removals include two failures -- Western Springs National Bank and Trust, Western Springs, IL ($187 million); and Nevada Commerce Bank, Las Vegas, NV ($145 million); two action terminations -- Tradition Bank - Bellaire, Houston, TX ($422 million); and Community Bank of Manatee, Lakewood, FL ($276 million); and one unassisted merger -- Athol-Clinton Co-operative Bank, Athol, MA ($85 million).

The additions were Parkway Bank and Trust Company, Harwood Heights, IL ($2.6 billion); and Mercantile Bank, Quincy, IL ($684 million Ticker: MBR). Mercantile Bank is part of Mercantile Bancorp, Inc., a multi-bank holding company that also has subsidiaries in Florida (The Royal Palm Bank of Florida) and Kansas (Heartland Bank), which are on the Unofficial Problem Bank List as well. We send out props to the Illinois State Banking Department for their transparency as they are the only state banking department that publishes its formal safety & soundness enforcement actions.

Note: A shutdown of the federal government would not interrupt FDIC closing activities as the agency's funding is not appropriated through the budget process. Rather, the FDIC receives its funding from assessments charged to the banking industry. In short, the FDIC would only use taxpayer monies if it had to borrow on its line from the Treasury. Despite having a negative insurance fund, the FDIC has avoided using the borrowing line as they pre-charged the industry an assessment and they have used loss-sharing arrangements in most resolutions, which lessen the cash outlay at the time of failure. While the FDIC is not appropriated by Congress, its insurance fund is included in the federal budget totals. This was an accounting gimmick started in the Johnson Administration used to lower the deficit as the fund normally has a positive balance. Under the pay-go rules of the 1990s, the FDIC's budget came under scrutiny as a reduction in the insurance fund would have added to the federal deficit.