Saturday, December 28, 2013

Unofficial Problem Bank list declines to 619 Institutions, Q4 Transition Matrix

by Bill McBride on 12/28/2013 11:16:00 AM

This is an unofficial list of Problem Banks compiled only from public sources.

Here is the unofficial problem bank list for December 27, 2013.

Changes and comments from surferdude808:

As expected, the FDIC released its enforcement action activity through November 2013 this week. That release coupled with a periodic list review led to many changes to the Unofficial Problem Bank List. This week, there were 15 removals and one addition that leave the list at 619 institutions with assets of $205.7 billion. A year ago, the list held 838 institutions with assets of $313.1 billion. During December 2013, the list declined by a net 26 institutions and $7.7 billion in assets after 20 action terminations, six mergers, one failure, and one addition.

Removals included 14 action terminations; however, half of the total should have been removed earlier. Actions have been terminated against Cadence Bank, N.A., Birmingham, AL ($6.2 billion); Spirit of Texas Bank, SSB, College Station, TX ($542 million); Community Bank of Broward, Dania Beach, FL ($483 million); CoastalStates Bank, Hilton Head Island, SC ($378 million); Vantage Bank Texas, San Antonio, TX ($309 million); Terrabank, National Association, Miami, FL ($273 million); Lake Area Bank, Lindstrom, MN ($272 million); Southport Bank, Kenosha, WI ($257 million); The First National Bank & Trust Company of Rochelle, Rochelle, IL ($247 million); First State Bank and Trust, Tonganoxie, KS ($223 million); Synergy Bank, S.S.B., McKinney, TX ($119 million); University Bank, Pittsburg, KS ($111 million); First National Bank, Chisholm, MN ($82 million); and Peoples Bank, Lyons, GA ($49 million). Roma Bank, Robbinsville, NJ ($1.5 billion) found its way of the list through an unassisted merger.

The addition this week was Liberty Bell Bank, Marlton, NJ ($170 million Ticker: LBBB). Also, the FDIC issued a Prompt Corrective Action order against AztecAmerica Bank, Berwyn, IL ($79 million).

Several banks have undergone a name change including Independence Federal Savings Bank, Washington, DC now known as Colombo Bank, Rockville, MD; The Citizens Bank of East Tennessee, Rogersville, TN now known as Civis Bank; The Patterson Bank, Patterson, GA now known as First Southern Bank; White Rock Bank, Cannon Falls, MN now known as First Farmers & Merchants Bank; BNB Bank, National Association, Fort Lee, NJ now known as BNB Hana Bank, National Association; and First Carolina State Bank, Rocky Mount, NC now known as First Carolina Bank. Several banks have changed their headquarter city within their respective state but Frontier Bank, FSB, Park City, UT moved out of state to Palm Desert, CA.

With the close of the fourth quarter of 2013, we have updated the Unofficial Problem Bank List transition matrix. Full details may be found in the accompanying table and a visual of the trends may be found in accompanying chart.

FDIC Unofficial List Click on graph for larger image.

Since its inception, 1,662 institutions have made an appearance on the list. To date, about 63 percent or 1,043 of the banks that have appeared on the list have been removed. Action termination is the now the primary way banks are exiting the list as 495 banks have had their enforcement action terminated. During the fourth quarter of 2013, action terminations slowed a bit from the torrid pace last quarter, but there were the second highest quarterly amount at 54. At the start of the fourth quarter, the list had 685 banks, which means the terminations represented 7.9 percent of the starting balance.

While terminations have increased, the sum of the other ways to exit -- failure, voluntary liquidation, or merger, still exceed those leaving through action termination. At 370 institutions and $294.1 billion in assets, failures are not to be ignored as failed assets still greatly overshadow the $211.5 billion removed through action terminations. At 22.3 percent, the failure rate for the Unofficial Problem Bank List is still well above the low double digit failure rate cited by the media for banks that appear on the official list. Voluntary closings and mergers sum to nearly 11 percent of banks that have appeared on the list. The list was first published in August 2009 with 389 banks, so after more than four years, 81 still remain, indicating that its taking many banks a long time to rehabilitate themselves after experiencing difficulties during the Great Recession.
Unofficial Problem Bank List
Change Summary
 Number of InstitutionsAssets ($Thousands)
Start (8/7/2009) 389276,313,429
 
Subtractions   
 Action Terminated123(40,710,021)
 Unassisted Merger30(6,470,016)
 Voluntary Liquidation4(10,584,114)
 Failures151(183,816,648)
 Asset Change (11,818,692)
 
Still on List at 12/31/2013 8122,913,938
 
Additions after
8/7/2009
 538182,843,876
 
End (12/31/2013) 619205,757,814
 
Intraperiod Deletions1   
 Action Terminated372170,802,027
 Unassisted Merger13763,392,166
 Voluntary Liquidation71,760,816
 Failures219110,286,710
 Total735346,241,719
1Institution not on 8/7/2009 or 12/31/2013 list but appeared on a weekly list.