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Saturday, July 02, 2011

Unofficial Problem Bank list at 1,003 Institutions and State Stress Level

by Calculated Risk on 7/02/2011 08:15:00 AM

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

Here is the unofficial problem bank list for July 1, 2011.

Changes and comments from surferdude808:

This week there were two additions to the Unofficial Problem Bank List, which pushed the number of institutions on the list to 1,003 and assets to $419.9 billion. The additions were The Coastal Bank, Savannah, GA ($442 million); and Virginia Community Bank, Louisa, VA ($226 million Ticker: VCBS).

With it being a relatively quiet week, we thought it would be a good time to update the analysis of examining which banking markets have been under the greatest stress since the on-set of the crisis. At year-end 2007, there were 8,536 insured institutions headquartered in the 50 states, D.C., and Puerto Rico. Since then through June 30, 2011, 1,644 or 19.3 percent have either failed or made an appearance on the Unofficial Problem Bank List (see table).

When ranking markets with a minimum of 15 institutions at year-end 2007, Arizona has experienced the most stress with nearly 58 percent of its institutions having failed or being identified as a problem. The state of Washington is second at 54.6 percent. The other stressed banking states ranked in the top ten include Nevada (52 percent), Florida (52 percent), Oregon (45 percent), Georgia (44 percent), California (40 percent), Utah (42 percent), South Carolina (33 percent), and Idaho (32 percent). Since year-end 2010, Arizona, Florida, Georgia, Nevada, South Carolina, and Washington saw their share of stressed banks rise nearly ten percentage points. The leader, Arizona had their share rise more than 12 percentage points to 58 percent from 46 percent. Thus, the most stressed markets continued to deteriorate over the past six months.

The common theme among banks in these markets is overexposure to commercial real estate lending, particularly residential construction & development loans, and the collapse of real estate markets. At the other end of the spectrum with comparatively little stress include Iowa (4.3 percent), New Hampshire (4.2 percent), and West Virginia (1.5 percent), whose shares have not changed since year-end. Vermont is the only state that has not experienced a failed institution or one appearing on the Unofficial Problem Bank List.

Here are the totals ...
 2007 CountUnofficial Problem Bank List June 2011Unofficial Problem Bank List Removals (ex-Failures)Failures (2008-June 2011)Total Failures, UPBL, & UPBL Removals (ex-Failures)Percentage1
Totals 8,536 1,001 272 371 1,644 19.3%
1Total failures, UBPL, and UPBL ex-failures to 2007 count (a percentage for states with less than 15 institutions is not determined because of possible skew to ranking).