Sunday, October 27, 2019

October 2019: Unofficial Problem Bank list Decreased to 71 Institutions

by Calculated Risk on 10/27/2019 12:20:00 PM

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 (just the number of banks and assets every quarter). Note: Bank CAMELS ratings are also 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.

DISCLAIMER: This is an unofficial list, the information is from public sources and while deemed to be reliable is not guaranteed. No warranty or representation, expressed or implied, is made as to the accuracy of the information contained herein and same is subject to errors and omissions. This is not intended as investment advice. Please contact CR with any errors.

Here is the unofficial problem bank list for October 2019.

Here are the monthly changes and a few comments from surferdude808:

Update on the Unofficial Problem Bank List for October 2019. During the month, the list declined by three to 71 banks after three removals. Aggregate assets were little changed finishing the month at $55.3. A year ago, the list held 75 institutions with assets of $56.3 billion. This month, the OCC terminated its action against Eastern Savings Bank, FSB, Hunt Valley, MD ($324 million). The other two removals were through failure. Both Louisa Community Bank, Louisa, KY ($30 million) and Resolute Bank (f/k/a Bank of Maumee), Maumee, OH ($27 million) were closed by their chartering authority. In what might be viewed as an action to “paper the file” before a post-mortem review, the OCC issued a Prompt Corrective Action order on October 2, 2019 to Resolute Bank less than a month before its failure. The other item of interest is that it has been more than four years since two banks were closed on the same day. It last occurred on October 2, 2015 when The Bank of Georgia, Peachtree City, GA ($294 million) and Hometown National Bank, Longview, WA ($5 million) were closed.
The first unofficial problem bank list was published in August 2009 with 389 institutions. The number of unofficial problem banks grew quickly and peaked at 1,003 institutions in July, 2011 - and then steadily declined to below 100 institutions.