Saturday, June 25, 2011

Unofficial Problem Bank list at 1,001 Institutions and Transition Matrix

by Bill McBride on 6/25/2011 08:26:00 AM

Note: this is an unofficial list of Problem Banks compiled only from public sources. This post includes an update to the transition matrix (see comments and table at bottom).

Here is the unofficial problem bank list for June 24, 2011.

Changes and comments from surferdude808:

As anticipated, the FDIC released its actions for May 2011, which contributed to many changes to the Unofficial Problem Bank List. This week there are eight additions and three removals. The net five additions push the list back over the 1,000 threshold to 1,001. Assets total $419.2 billion, up $2.5 billion from last week. For the month of June, changes included 17 additions and 13 removals, with four from failure, two from unassisted mergers, and seven from action terminations.

Removals this week include the failed Mountain Heritage Bank, Clayton, GA ($104 million) and action terminations against Commercial State Bank of El Campo, El Campo, TX ($127 million) and Slovak Savings Bank, Pittsburgh, PA ($85 million). This month the FDIC terminated 13 consent orders and two Prompt Corrective Action orders, but, strangely, nine of the terminations were for banks that had failed.

Among the eight additions this week are Patriot Bank, Houston, TX ($1.3 billion); American Bank of the North, Nashwauk, MN ($644 million); and Stonebridge Bank, Exton, PA ($365 million). One other change of note includes the FDIC issuing a Prompt Corrective Action Order against Colorado Capital Bank, Castle Rock, CO ($718 million).

With this being the last Friday of the second quarter, it is time to update the transition matrix. The Unofficial Problem Bank List debuted on August 7, 2009 with 389 institutions with assets of $276.3 billion (see table below).

Over the past 22 months, about 49 percent or 192 institutions have been removed from the original list with 125 due to failure, 49 due to action termination, and 18 due to unassisted merger. About 32 percent of the 389 institutions on the original list have failed, which is substantially higher than the 12 percent figure usually cited by the media as the failure rate for institutions on the FDIC Problem Bank List.

Since the publication of the original list, another 1,009 institutions have been added. However, only 804 of those 1,009 additions remain on the current list as 205 institutions have been removed in the interim. Of the 205 interim removals, 134 were from failure, 44 were from an unassisted merger, 25 from action termination, and two from voluntary liquidation.

In total, 1,398 institutions have made an appearance on the Unofficial Problem Bank List and 259 or 18.5 percent have failed. Of the 397 total removals, the primary way of exit from the list is failure at 259 or 65 percent. Only 74 or 18.6 percent have been rehabilitated while another 62 or 15.6% have found merger partners. Total assets that have appeared on the list amount to $768.9 billion and $258.6 billion have been removed due to failure. The average asset size of removals from failure is nearly $1 billion.
Unofficial Problem Bank List
Change Summary
 Number of InstitutionsAssets ($Thousands)
Start (8/7/2009) 389 276,313,429
 Action Terminated49 (12,581,702)
 Unassisted Merger18 (3,105,440)
 Voluntary Liquidation0 -
 Failures125 (169,470,405)
 Asset Change  (20,083,711)
Still on List at 6/24/2011 197 71,072,171
Additions 804 348,177,411
End (6/24/2011) 1001 419,249,582
Intraperiod Deletions1   
 Action Terminated25 22,538,068
 Unassisted Merger44 31,856,880
 Voluntary Liquidation2 833,567
 Failures134 89,146,292
 Total205 144,374,807
1Institution not on 8/7/2009 or 6/24/2011 list but appeared on a list between these dates.