Friday, July 02, 2010

Unofficial Problem Bank List at 798 Institutions

by Calculated Risk on 7/02/2010 08:45:00 PM

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

Here is the unofficial problem bank list for July 2, 2010.

Changes and comments from surferdude808:

The Unofficial Problem Bank List underwent minor changes after a flurry of activity last week. It looks like the FDIC is taking the holiday weekend off.

The only changes were the addition of two institutions -- United Western Bank, Denver, CO ($2.6 billion Ticker: UWBK); and Cecil Bank, Elkton, MD ($513 million Ticker: CECB); and one removal from a voluntary liquidation -- American Trust & Savings Bank, Whiting, IN ($119 million). At mid-year 2010, the list stands at 798 institutions with aggregate assets of $412.6 billion.

With the passage of another quarter, we thought it was 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). Over the past ten months, 119 institutions have been removed with 87 due to failure, 22 due to action termination, and 10 due to unassisted merger. Thus, 73 percent of the removals are from failure. Moreover, 22.4 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.

More distressing, however, is that failed institutions represented 55 percent or $152.9 billion of the $276.3 billion assets on the original list. Notable failures include Colonial Bank ($26.4 billion); Westernbank Puerto Rico ($15.1 billion); AmTrust Bank ($14.4 billion); Guaranty Bank ($14.3 billion); Corus Bank (7.6 billion); First Federal Bank of California ($6.8 billion); California National Bank ($6.5 billion); and Amcore Bank ($5.2 billion).

Other changes to the original list include the addition of 602 institutions. However, only 528 of those 602 additions are on the current list as 74 institutions have been removed in the interim. Of the 74 interim removals, 62 were due to failure, 10 were due to unassisted merger, and one each from action termination and voluntary liquidation. Again, failure represents a disproportionate 83.7 percent of the reason for removal. 872 institutions have made an appearance on the Unofficial Problem Bank List and 149 or 17 percent have failed. The average asset size of removals because of failure is $623 million. Currently, the average asset size of institutions is $517 million versus $710 million on the original list. Thus, the average asset size of future failures will likely be lower, which is the only positive in the data.
Unofficial Problem Bank List
Change Summary
 Number of InstitutionsAssets ($Thousands)
Start (8/7/2009)389 276,313,429
 Action Terminated22 (3,272,910)
Unassisted Merger10 (1,317,634)
Failures87 (152,932,468)
Asset Change  (9,337,980)
Still on List at 7/02/2010270 109,452,437
Additions528 303,142,129
End (4/02/2010)798 412,594,566
Interperiod Deletions1  
 Action Terminated1 37,695
Unassisted Merger10 1,769,600
Voluntary Liquidation1 119,082
Failures62 60,103,942
Total74 62,030,319
1Institution not on 8/7/2009 or 7/02/2010 list but appeared on a list between these dates.