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Saturday, October 05, 2013

Unofficial Problem Bank list declines to 685 Institutions, Q3 Transition Matrix

by Calculated Risk on 10/05/2013 12:51:00 PM

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

Here is the unofficial problem bank list for October 4, 2013.

Changes and comments from surferdude808:

The FDIC released its enforcement action activity through August 2013 on Monday , September 30th, which was a change in the timing of the release as they usually release on the last Friday of the month. In this case, that would have been Friday, September 27th. We are unsure if this a permanent change going forward or one-off because of some technical issue. The release did contribute to many changes to the Unofficial Problem Bank List. Moreover, it allowed us to update the quarterly transition matrix.

This week there were eight removals and three additions that leave the list holding 685 institutions with assets of $238.7 billion. A year ago, the list held 873 institutions with assets of $334.9 billion.

All removals were action terminations for First Bank and Trust, New Orleans, LA ($716 million); The Delaware County Bank and Trust Company, Lewis Center, OH ($506 million Ticker: DCBF); Cornerstone Bank, Fargo, ND ($233 million); The Citizens Bank of Forsyth County, Cumming, GA ($218 million); Monterey County Bank, Monterey, CA ($211 million Ticker: NRLB); First Security Bank of Nevada, Las Vegas, NV ($119 million); First Sound Bank, Seattle, WA ($106 million Ticker: FSWA); and Town Center Bank, Frankfort, IL ($89 million).

The three additions were Hancock Bank & Trust Company, Hawesville, KY ($317 million); Marshall County State Bank, Varna, IL ($31 million); and Bank of Monticello, Monticello, GA ($93 million). Who would have thought there was a bank in Georgia left to be put under an enforcement action.

With the passage of the third quarter of 2013, we have updated the Unofficial Problem Bank List transition matrix. Full details may be found in the accompanying table. Also, we have added a time series chart depicting the disposition status of banks whose presence has graced the list.

FDIC Unofficial List Click on graph for larger image.

In all, there have been 1,659 institutions that have made an appearance on the list. So far, nearly 59 percent or 1,064 of the banks that have appeared on the list have been removed. Action termination has now solidly overtaken failure as the largest manner of exit. Actions have been terminated against 441 banks. During the latest quarter, the banking regulators accelerated action terminations as 64 were removed. At the start of the quarter, the list had 701 banks, so the removal rate was 9.1 percent of the start balance. This removal rate was well above the previous quarterly high of 6.1 percent in the first of 2013 and the absolute number of 53 removals in the third quarter of 2012.

Despite the acceleration of terminations, the other manners of removal still exceed a turnaround in condition that results in action termination. Failures total 368 and, at $293.6 billion, they do account for a far greater share of assets removed than terminations at $191.9 billion. So far, failures have represented 22.1 percent of banks that have appeared on the list, which is well above the low double digit failure rate usually cited by the media for banks that appear on the official list. Voluntary closings and mergers sum to 10 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, 90 still remain, indicating that its taking many banks a long time to rehabilitate themselves.

Next week should be comparatively quiet as to changes. There is nothing new to pass along on Capitol Bancorp, Ltd.
Unofficial Problem Bank List
Change Summary
 Number of InstitutionsAssets ($Thousands)
Start (8/7/2009) 389276,313,429
 Action Terminated117(37,076,372)
 Unassisted Merger28(4,624,747)
 Voluntary Liquidation4(10,584,114)
 Asset Change (8,593,209)
Still on List at 6/30/2013 9032,118,745
Additions 595206,591,667
End (10/4/2013) 685238,710,412
Intraperiod Deletions1   
 Action Terminated324154,815,490
 Unassisted Merger12658,722,086
 Voluntary Liquidation71,760,816
1Institution not on 8/7/2009 or 10/4/2013 list but appeared on a weekly list.