by Calculated Risk on 6/21/2014 08:19:00 AM

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

Here is the unofficial problem bank list for June 20, 2014.

Changes and comments from surferdude808:

A couple bank failures and an update from the OCC on its enforcement action activities contributed to several changes to the Unofficial Problem Bank List. In all, there were six removals that push the list count down to 488 institutions with assets of $152.6 billion. In comparison, there were 751 institutions with assets of $273 billion on the list a year ago.

The OCC terminated actions against Eagle National Bank, Upper Darby, PA ($190 million); The First National Bank and Trust Company of Broken Arrow, Broken Arrow, OK ($189 million); Lee County Bank & Trust, National Association, Fort Madison, IA ($148 million); and First National Bank Northwest Florida, Panama City, FL ($108 million).

The failure plagued states of Florida and Illinois experienced a failure each this Friday. The River Valley Bancorp, Inc., Davenport, IA, saw its two banking subsidiaries that each operate under the name Valley Bank fail. The larger Valley Bank with assets of $456 million was located in Moline, Illinois, while its smaller sister with $82 million of assets was located in Fort Lauderdale, Florida. Since the on-set of the Great Recession, there have been 71 failures in Florida and 59 in Georgia. Both states only trail Georgia which has an astonishing 87 failures but none so far this year.

Next week we anticipate the FDIC will release an update on its enforcement action activities. With it being the last Friday of the quarter, we will provide an update on transition matrix.

CR Note: The first unofficial problem bank list was published in August 2009 with 389 institutions. The list peaked at 1,002 institutions on June 10, 2011, and is now down to 494.

by Calculated Risk on 6/20/2014 06:35:00 PM

From the FDIC: Great Southern Bank, Reeds Spring, Missouri, Assumes All of the Deposits of Valley Bank, Moline, Illinois

As of March 31, 2014, Valley Bank had approximately $456.4 million in total assets and $360.0 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $51.4 million. ... Valley Bank is the 10th FDIC-insured institution to fail in the nation this year, and the third in Illinois.

From the FDIC: Landmark Bank, National Association, Fort Lauderdale, Florida, Assumes All of the Deposits of Valley Bank, Fort Lauderdale, Florida

As of March 31, 2014, Valley Bank had approximately $81.8 million in total assets and $66.5 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $7.7 million. ... Valley Bank is the 11th FDIC-insured institution to fail in the nation this year, and the first in Florida.

A two for Friday!

by Calculated Risk on 6/20/2014 03:48:00 PM

I use the weekly Freddie Mac Primary Mortgage Market Survey® (PMMS®) to track mortgage rates. The PMMS series started in 1971, so there is a fairly long historical series.

For daily rates, the Mortgage News Daily has a series that tracks the PMMS very well, and is usually updated daily around 3 PM ET. The MND data is based on actual lender rate sheets, and is mostly "the average no-point, no-origination rate for top-tier borrowers with flawless scenarios". (this tracks the Freddie Mac series).

MND reports that average 30 Year fixed mortgage rates decreased today to 4.18% from 4.20% yesterday.

One year ago, on June 20, 2013, rates were at 4.29% and rising.   So rates are down year-over-year!

The spread will be even larger next week. Here is a table from Mortgage News Daily:

Home Loan Rates

View More Refinance Rates

by Calculated Risk on 6/20/2014 12:58:00 PM

The Fed's Household Debt Service ratio through Q1 2014 was released this morning: Household Debt Service and Financial Obligations Ratios. I used to track this quarterly back in 2005 and 2006 to point out that households were taking on excessive financial obligations.

These ratios show the percent of disposable personal income (DPI) dedicated to debt service (DSR) and financial obligations (FOR) for households. Note: The Fed changed the release in Q3.

The household Debt Service Ratio (DSR) is the ratio of total required household debt payments to total disposable income.

The DSR is divided into two parts. The Mortgage DSR is total quarterly required mortgage payments divided by total quarterly disposable personal income. The Consumer DSR is total quarterly scheduled consumer debt payments divided by total quarterly disposable personal income. The Mortgage DSR and the Consumer DSR sum to the DSR.

This data has limited value in terms of absolute numbers, but is useful in looking at trends. Here is a discussion from the Fed:

The limitations of current sources of data make the calculation of the ratio especially difficult. The ideal data set for such a calculation would have the required payments on every loan held by every household in the United States. Such a data set is not available, and thus the calculated series is only an approximation of the debt service ratio faced by households. Nonetheless, this approximation is useful to the extent that, by using the same method and data series over time, it generates a time series that captures the important changes in the household debt service burden.

Click on graph for larger image.

The graph shows the Total Debt Service Ratio (DSR), and the DSR for mortgages (blue) and consumer debt (yellow).

The overall Debt Service Ratio decreased in Q1, and is at a record low.  Note: The financial obligation ratio (FOR) is also near a record low  (not shown)

Also the DSR for mortgages (blue) are near the low for the last 30 years.  This ratio increased rapidly during the housing bubble, and continued to increase until 2007. With falling interest rates, and less mortgage debt (mostly due to foreclosures), the mortgage ratio has declined significantly.

This data suggests household cash flow is in much better shape than a few years ago.

by Calculated Risk on 6/20/2014 10:00:00 AM

From the BLS: Regional and State Employment and Unemployment Summary

Regional and state unemployment rates were generally little changed in May. Twenty states had unemployment rate decreases from April, 16 states had increases, and 14 states and the District of Columbia had no change, the U.S. Bureau of Labor Statistics reported today.
...
Rhode Island again had the highest unemployment rate among the states in May, 8.2 percent. North Dakota again had the lowest jobless rate, 2.6 percent.

Click on graph for larger image.

This graph shows the current unemployment rate for each state (red), and the max during the recession (blue). All states are well below the maximum unemployment rate for the recession.

The size of the blue bar indicates the amount of improvement. 

The states are ranked by the highest current unemployment rate. No state has double digit or even a 9% unemployment rate.  Only Rhode Island (8.2%) is at or above 8%.  

The second graph shows the number of states with unemployment rates at or above certain levels since January 2006. At the worst of the employment recession, there were 10 states with an unemployment rate at or above 11% (red).

Currently no state has an unemployment rate at or above 9% (purple), 1 state is at or above 8% (light blue), and 9 states are at or above 7% (dark blue).