Sunday, March 01, 2020

February 2020: Unofficial Problem Bank list Decreased to 63 Institutions

by Calculated Risk on 3/01/2020 01:07:00 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 February 2020.

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

Update on the Unofficial Problem Bank List for February 2020. During the month, the list declined by one to 63 banks after one removal. Aggregate assets fell to $48.5 billion from $51.3 billion a month ago with $2.6 billion of the decline coming from updated asset figures for the fourth quarter of 2019. A year ago, the list held 76 institutions with assets of $52.8 billion. Gwinnett Community Bank, Duluth, GA ($223 million) found its way off the list through a merger partner. This past week, the FDIC release industry results for the fourth quarter of 2019 and provide an update on the Official Problem Bank List, which they said had 51 institutions with assets of $48.8 billion. Earlier in the month on February 14, 2020, the Nebraska Department of Banking closed Ericson State Bank, Ericson, NE ($101 million). The FDIC estimated a 14% loss rate on the failure.
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 has steadily declined since then to well below 100 institutions.