In Depth Analysis: CalculatedRisk Newsletter on Real Estate (Ad Free) Read it here.

Monday, December 03, 2012

Unofficial Problem Bank list declines to 856 Institutions

by Calculated Risk on 12/03/2012 08:44:00 AM

CR Note: Usually I post this on Saturday - sorry for the delay. The first unofficial problem bank list was published in August 2009 with 389 institutions. The number of unofficial problem banks grew steadily and peaked at 1,002 institutions on June 10, 2011. The list has been declining recently.

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

Here is the unofficial problem bank list for Nov 30, 2012.

Changes and comments from surferdude808:

This week, the FDIC released its enforcement actions through October but did not release industry results for the third quarter. Changes to the Unofficial Problem Bank List include six removals and five additions that leave the list at 856 institutions with assets of $326.4 billion. A year ago, the list held 980 institutions with assets of $400.5 billion. For the month of November, the list declined by eight institutions after 13 action terminations, three failures, two unassisted mergers, and 10 additions.

The six removals were for action terminations against Johnson Bank, Racine, WI ($3.8 billion); NexBank, SSB, Dallas, TX ($607 million); Ohana Pacific Bank, Honolulu, HI ($94 million Ticker: OHPB): Lead Bank, Garden City, MO ($84 million); Prosper Bank, Prosper, TX ($64 million); and Millennium Bank, Des Plaines, IL ($44 million).

Additions this week were Inland Bank and Trust, Oak Brook, IL ($1.3 billion); Cornerstone Bank, Moorestown, NJ ($351 million Ticker: CFIC); Devon Bank, Chicago, IL ($250 million); First Citizens Bank of Georgia, Dawsonville, GA ($95 million); and Community State Bank, Norwalk, WI ($27 million).

Look for the FDIC to release industry third quarter results this Tuesday.
CR Note: The FDIC's official problem bank list is comprised of banks with a CAMELS rating of 4 or 5, and the list is not made public. (CAMELS is the FDIC rating system, and stands for Capital adequacy, Asset quality, Management, Earnings, Liquidity and Sensitivity to market risk. The scale is from 1 to 5, with 1 being the strongest.)

As a substitute for the CAMELS ratings, surferdude808 is using publicly announced formal enforcement actions, and also media reports and company announcements that suggest to us an enforcement action is likely, to compile a list of possible problem banks in the public interest.

When the list was increasing, the official and "unofficial" counts were about the same. Now with the number of problem banks declining, the unofficial list is lagging the official list. This probably means regulators are changing the CAMELS rating on some banks before terminating the formal enforcement actions.

Summary for Week Ending Nov 30th
Schedule for Week of Dec 2nd