by Calculated Risk on 4/09/2011 08:32:00 AM

Note: this is an unofficial list of Problem Banks compiled only from public sources.

Here is the unofficial problem bank list for Apr 8, 2011.

Changes and comments from surferdude808:

After a quiet week last week, activity picked-up on the Unofficial Problem Bank List as there were five removals and two additions. The changes results in the list having 982 institutions with assets of $433.2 billion compared with last week's total of 985 institutions and assets of $431.1 billion.

The five removals include two failures -- Western Springs National Bank and Trust, Western Springs, IL ($187 million); and Nevada Commerce Bank, Las Vegas, NV ($145 million); two action terminations -- Tradition Bank - Bellaire, Houston, TX ($422 million); and Community Bank of Manatee, Lakewood, FL ($276 million); and one unassisted merger -- Athol-Clinton Co-operative Bank, Athol, MA ($85 million).

The additions were Parkway Bank and Trust Company, Harwood Heights, IL ($2.6 billion); and Mercantile Bank, Quincy, IL ($684 million Ticker: MBR). Mercantile Bank is part of Mercantile Bancorp, Inc., a multi-bank holding company that also has subsidiaries in Florida (The Royal Palm Bank of Florida) and Kansas (Heartland Bank), which are on the Unofficial Problem Bank List as well. We send out props to the Illinois State Banking Department for their transparency as they are the only state banking department that publishes its formal safety & soundness enforcement actions.

Note: A shutdown of the federal government would not interrupt FDIC closing activities as the agency's funding is not appropriated through the budget process. Rather, the FDIC receives its funding from assessments charged to the banking industry. In short, the FDIC would only use taxpayer monies if it had to borrow on its line from the Treasury. Despite having a negative insurance fund, the FDIC has avoided using the borrowing line as they pre-charged the industry an assessment and they have used loss-sharing arrangements in most resolutions, which lessen the cash outlay at the time of failure. While the FDIC is not appropriated by Congress, its insurance fund is included in the federal budget totals. This was an accounting gimmick started in the Johnson Administration used to lower the deficit as the fund normally has a positive balance. Under the pay-go rules of the 1990s, the FDIC's budget came under scrutiny as a reduction in the insurance fund would have added to the federal deficit.

by Calculated Risk on 4/09/2011 01:10:00 AM

No surprise ...

From the NY Times: Deal at Last Minute Averts Shutdown; $38 Billion in Cuts to Spending This Year

From the WSJ: Last-Minute Deal Averts Shutdown

From the WaPo: Government shutdown averted: Congress agrees to budget deal, stopgap funding

by Calculated Risk on 4/08/2011 08:38:00 PM

An apéritif
Sloshes down the bankers maw
Eager to consume
by Soylent Green is People
From the FDIC: City National Bank, Los Angeles, California, Assumes All of the Deposits of Nevada Commerce Bank, Las Vegas, Nevada

As of December 31, 2010, Nevada Commerce Bank had approximately $144.9 million in total assets and $136.4 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $31.9 million. .... Nevada Commerce Bank is the 28th FDIC-insured institution to fail in the nation this year, and the first in Nevada.

by Calculated Risk on 4/08/2011 07:46:00 PM

Government meltclose.
The Patricians gnash and wail
Plebeians rejoice.
by Soylent Green is People
From the FDIC: Heartland Bank and Trust Company, Bloomington, Illinois, Assumes All of the Deposits of Western Springs National Bank and Trust, Western Springs, Illinois

As of December 31, 2010, Western Springs National Bank and Trust had approximately $186.8 million in total assets and $181.9 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $31.0 million. ... Western Springs National Bank and Trust is the 27th FDIC-insured institution to fail in the nation this year, and the fourth in Illinois.

If the FDIC agents work on the weekend, will they get paid? Just wondering ...

by Calculated Risk on 4/08/2011 07:06:00 PM

A few comments ... (midnight ET)

• I still expect an agreement.

• Stan Collender writes: The Shutdown Problem This September is Going to be Even Worse

No matter what happens today with the government shutdown, the situation is going to be even more difficult this September when the House, Senate, and White House fight over the 2012 appropriations. ... Expect another shutdown threat...or an actual shutdown...in less than 6 months.

• And from the NY Times Caucus: Conservatives Urge Boehner to Cut a Budget Deal and Move On

[J]ust hours before the first government shutdown in 15 years –some of the most vocal conservatives are urging Republicans to reach a deal before a shutdown occurs.
...
Mike Huckabee, the former governor of Arkansas and a possible presidential candidate, said Friday afternoon in an interview that a shutdown would “hurt the Republicans, not the Democrats.”
...
Senator Tom Coburn of Oklahoma, one of the more conservative Republicans in the Senate, told Bloomberg’s Al Hunt that Republicans should “probably” give up on the policy “riders” that have been holding up negotiations.

This is probably the cover Boehner needs. But as Collender notes, it will get really ugly in September.

by Calculated Risk on 4/08/2011 03:03:00 PM

Some "D list" transportation data ...

The Association of American Railroads (AAR) reports carload traffic in March 2011 was up up 3.4% over March 2010 and 11.2% over March 2009, and intermodal traffic (using intermodal or shipping containers) was up 8.5% over March 2010 and up 21.6% over March 2009.

U.S. freight railroads originated an average of 298,711 carloads per week in March 2011, for a total of 1,493,553 carloads — up 3.4% over March 2010 and 11.2% over March 2009. March 2011’s percentage increase is the lowest of any month since rail traffic began its recovery in early 2010, but part of that is because of more difficult comparisons (i.e., year-ago traffic no longer as bleak as it had been).

Click on graph for larger image in new window.

This graph shows U.S. average weekly rail carloads (NSA).

From AAR:

On a seasonally adjusted basis, U.S. rail carloads were up 2.0% in March 2011 from February 2011. That’s the biggest month-to-month increase in six months and the third seasonally-adjusted increase in the past four months.

As the first graph shows, rail carload traffic collapsed in November 2008, and now, over 18 months into the recovery, carload traffic has recovered about half way.

The second graph is for intermodal traffic (using intermodal or shipping containers):

In March 2011, U.S. railroads averaged 222,260 intermodal trailers and containers per week, for a total of 1,111,301 for the month. That’s up 8.5% (86,908 intermodal units) over March 2010 and up 21.6% (197,423 units) over March 2009.

Seasonally adjusted U.S. rail intermodal traffic was up 0.5% in March 2011 from February 2011, the fourth straight monthly increase.
excerpts with permission

Intermodal traffic is close to old highs, but carload traffic is only about half way back to pre-recession levels.

by Calculated Risk on 4/08/2011 01:58:00 PM

Yesteday Scott Reckard at the LA Times wrote about mortgage lenders laying off workers as refinance activity declined: Home lenders shed workers as mortgage rates climb. Here is a graph of refinance activity and mortgage rates:

Click on graph for larger image in graph gallery.

This graph shows the MBA's refinance index (monthly average) and the the 30 year fixed rate mortgage interest rate from the Freddie Mac Primary Mortgage Market Survey®.

Although mortgage rates are still below 5%, it takes lower and lower rates to get people to refi (at least lower than recent purchase rates).

With 30 year mortgage rates now about 0.6 percentage points above the lows in October, this is the end of the recent surge in refinance activity - unless rates drop significantly again. With refinance activity down over 50%, and mortgage purchase activity at low levels, the lenders need fewer workers (as Reckard noted).

by Calculated Risk on 4/08/2011 11:41:00 AM

CNBC: Budget Deal is Near: GOP Senate Minority Leader McConnell

It seemed very unlikely to me that the government would be shut down. I'll have more when the deal is announced.

by Calculated Risk on 4/08/2011 09:04:00 AM

An update on the bailout for Portugal from the Irish Times: Portugal told to implement reforms ahead of bailout

Europe's rich countries pushed Portugal to make deeper-than-planned budget cuts in the heat of an election campaign in exchange for an emergency aid package estimated at €80 billion.
...
In an unprecedented intervention in national politics, euro-area finance ministers said Portugal can win relief by mid-May as long as it makes cuts that go beyond measures that failed to pass parliament in March and led to the government's downfall.

"We stand ready to negotiate immediately this ambitious program, which should comprehend an ambitious fiscal adjustment, structural reforms," said European Central Bank president Jean-Claude Trichet ...

Last month's austerity plan "is a starting point", European Union economic and monetary commissioner Olli Rehn told reporters ... "It is indeed essential in Portugal to reach a cross-party agreement ensuring that such a program can be adopted in May."

So what the voters just turned down is a "starting point" now. Ouch.

And from Jack Ewing at the NY Times: European Bank Stress Tests to Hit German Banks Hard (Pay)

Banks that fail a planned health checkup by European regulators in June will be required to present a recovery plan that could force some weaker institutions, particularly in Germany, to raise more capital ...

The authority said in a statement Friday that it expected any bank “showing specific weaknesses in the stress test, to agree with the relevant supervisory authority the appropriate remedial measures and execute them in due time.”

by Calculated Risk on 4/07/2011 10:37:00 PM

From Scott Reckard at the LA Times: Home lenders shed workers as mortgage rates climb

A rebound in mortgage rates from last year's near-record low has reduced consumer demand for home loans and refinancings, leading Wells Fargo & Co. to join other industry stalwarts in laying off loan processors and related workers.

The San Francisco bank, the nation's No. 1 mortgage lender, has handed pink slips to about 1,900 workers who had processed loans generated both by Wells' mortgage unit and by independent brokers, a spokesman said Thursday. ... Notifications went out March 23 telling affected workers their jobs would end in 60 days ...

Maybe they can have these workers help with modifications and foreclosures ...

It doesn't take much of an increase in rates for refinance activity to slow sharply.

The MBA refinance index has fallen sharply since last October, suggesting refinance volumes have fallen about 60% - as 30 year mortgage rates increased from 4.21% in October to the current 4.93%.