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Saturday, August 30, 2014

Unofficial Problem Bank list declines to 439 Institutions

by Calculated Risk on 8/30/2014 08:33:00 AM

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

Here is the unofficial problem bank list for Aug 29, 2014.

Changes and comments from surferdude808:

As expected, the FDIC released q2 industry results and provided an update on its latest enforcement action activity. The update led to six removals from the Unofficial Problem Bank List pushing the list total down to 439 institutions with assets of $139.97 billion. A year ago, the list held 707 institutions with assets of $250.6 billion.

Actions were terminated against First State Bank, Lonoke, AR ($256 million); The Business Bank, Appleton, WI ($253 million); First Financial Bank, Bessemer, AL ($183 million); Citizens State Bank, Hudson, WI ($146 million); South Georgia Bank, Glennville, GA ($125 million); and Golden State Bank, Upland, CA ($92 million Ticker: GSBB).

The FDIC told there are 354 institutions with assets of $110 billion on the Official Problem Bank List. Since their last update, the official list declined by 13.9 percent or 57 institutions, which the largest percentage decline over the past 13 quarters since the official list peaked at 888 institutions in the first quarter of 2011. The unofficial list fell by an identical 57 institutions since the last update from the FDIC on May 28, 2014.
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.