by Calculated Risk on 11/08/2014 04:52:00 PM

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

Here is the unofficial problem bank list for Nov 7, 2014.

Changes and comments from surferdude808:

Surprising these days to have a bank failure in three out of the past four weeks, but that is just what happened. Along with the failure there were two other removals this week that push the Unofficial Problem Bank List count down to 419 institutions with assets of $131.9 billion. A year ago, the list held 661 institutions with assets of $228.8 billion.

Frontier Bank, FSB, Palm Desert, CA ($88 million) became the 17th failure this year and 40th institution headquartered in California to fail since the on-set of the Great Recession. Other removals include an action termination at Carver Federal Savings Bank, New York, NY ($648 million) and a change in control and recapitalization of Michigan Commerce Bank, Ann Arbor, MI ($922 million).

Next week should be quiet as the OCC likely will not provide an update on its latest enforcement action activity until November 21st.

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 419.

by Calculated Risk on 11/08/2014 11:50:00 AM

The key economic report this week is October retail sales on Friday.

The MBA is expected to release the Q3 National Delinquency Survey on Friday.

----- Monday, November 10th -----
At 10:00 AM ET: The Fed will release the new monthly Labor Market Conditions Index (LMCI).


----- Tuesday, November 11th -----
The is a federal/bank holiday. The Bond market will be closed in observance of the Veterans Day. The stock market will be open for trading.

----- Wednesday, November 12th -----
7:00 AM: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

7:30 AM ET: NFIB Small Business Optimism Index for October.

10:00 AM: Monthly Wholesale Trade: Sales and Inventories for September. The consensus is for a 0.2% increase in inventories.

----- Thursday, November 13th -----
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for claims to decrease to 275 thousand from 278 thousand.

10:00 AM: Job Openings and Labor Turnover Survey for September from the BLS.

This graph shows job openings (yellow line), hires (purple), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

Jobs openings increased in August to 4.835 million from 4.605 million in July.

The number of job openings (yellow) were up 23% year-over-year. Quits were up 5% year-over-year.

2:00 PM ET: The Monthly Treasury Budget Statement for October.

----- Friday, November 14th -----
8:30 AM ET: Retail sales for October will be released.

This graph shows retail sales since 1992 through September 2014. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline). On a monthly basis, retail sales decreased 0.3% from August to September (seasonally adjusted), and sales were up 4.3% from September 2013.

The consensus is for retail sales to increase 0.2% in October, and to increase 0.2% ex-autos.

9:55 AM: Reuter's/University of Michigan's Consumer sentiment index (preliminary for November). The consensus is for a reading of 87.5, up from 86.9 in October.

10:00 AM: The Mortgage Bankers Association (MBA) Q3 2014 National Delinquency Survey (NDS).

10:00 AM: Manufacturing and Trade: Inventories and Sales (business inventories) report for September.  The consensus is for a 0.3% increase in inventories.

by Calculated Risk on 11/08/2014 08:01:00 AM

Update: On Nov 8th I added the MBA forecast.

Towards the end of each year I collect some housing forecasts for the following year, and it looks like most analysts are optimistic for 2015.

The NAR released their forecast yesterday: Home Sales Expected to Improve in 2015, but Some Headwinds Still Remain

[Lawrence Yun, chief economist of the National Association of Realtors®] expects the national median existing-home price to rise 4 percent both next year and in 2016. ... Housing starts are forecast to hit 1 million this year and reach 1.3 million in 2015, which is still below the underlying demand of about 1.5 million, but should gradually normalize as lenders open their credit box more to builders. New-home sales are likely to total 440,000 in 2014, and increase to 620,000 next year.

Note: Wells Fargo updated their forecast (slight changes).

Here is a summary of forecasts for 2014. In 2014, new home sales will be around 440 thousand, and total housing starts will be close to 1 million.  No one was close on New Home sales (all way too optimistic), and Michelle Meyer (Merrill Lynch) and Fannie Mae were the closest on housing starts (about 10% too high).

In 2014, many analysts underestimated the impact of higher mortgage rates and higher new home prices on new home sales and starts.

Note: Here is a summary of forecasts for 2013. In 2013, new home sales were 429 thousand, and total housing starts were 925 thousand.  Barclays were the closest on New Home sales followed by David Crowe (NAHB).  Fannie Mae and the NAHB were the closest on housing starts.

The table below shows a few forecasts for 2015 (I'll update these in further in December).

From Fannie Mae: Housing Forecast: October 2014

From NAHB: Single-Family Production Poised to Take Off in 2015

I don't have Moody's Analytics' forecast, but Mark Zandi, chief economist at Moody's Analytics said today "that single-family starts could be closing in on 1 million units by the end of 2015 and multifamily production could go as high as 500,000 units."  That seems too high.

I haven't worked up a forecast yet for 2015.

Housing Forecasts for 2015
	New Home Sales (000s)	Single Family Starts (000s)	Total Starts (000s)	House Prices1
Fannie Mae	523	783	1,170	4.9%2
Merrill Lynch	557		1,200	3.6%
MBA	503	728	1,108	3.0%2
NAHB	547	802	1,158
NAR	620		1,300	4%3
Wells Fargo	530	770	1,160	3.3%
Zillow				3.0%4
1Case-Shiller unless indicated otherwise 2FHFA Purchase-Only Index 3NAR Median Home price 4Zillow Home Value Index, Sept 2014 to Sept 2015

by Calculated Risk on 11/07/2014 08:15:00 PM

From the FDIC: Bank of Southern California, N.A., San Diego, California, Assumes All of the Deposits of Frontier Bank, FSB, d/b/a El Paseo Bank, Palm Desert, California

As of June 30, 2014, Frontier Bank, FSB had approximately $86.4 million in total assets and $82.1 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $4.7 million. ... Frontier Bank, FSB is the 17th FDIC-insured institution to fail in the nation this year, and the first in California. The last FDIC-insured institution closed in the state was Palm Desert National Bank, Palm Desert, on April 27, 2012.

It feels like a Friday!

by Calculated Risk on 11/07/2014 04:38:00 PM

This is a key distressed market to follow since Phoenix saw a large bubble / bust followed by strong investor buying.  These key markets hopefully show us changes in trends for sales and inventory.

The Arizona Regional Multiple Listing Service (ARMLS) reports (table below):

1) Overall sales in October were up 2.5% year-over-year.  Note: This is the first year-over-year sales increase this year.

2) Cash Sales (frequently investors) were down about 10% to 27.7% of total sales. Non-cash sales were up 8.4% year-over-year.

3) Active inventory is now up 5.7% year-over-year - and at about the same level as in October 2011 (about when prices bottomed in Phoenix).  Note: This is the smallest year-over-year inventory increase this year, so the inventory build may be slowing.

More inventory (a theme this year) - and less investor buying - suggested price increases would slow sharply in 2014.

According to Case-Shiller, Phoenix house prices bottomed in August 2011 (mostly flat for all of 2011), and then increased 23% in 2012, and another 15% in 2013.  Those large increases were probably due to investor buying, low inventory and some bounce back from the steep price declines in 2007 through 2010.  Now, with more inventory, price increases have flattened out in 2014.

As an example, the Phoenix Case-Shiller index through August shows prices up less than 1% in 2014, and the Zillow index shows Phoenix prices flat over the last year!

October Residential Sales and Inventory, Greater Phoenix Area, ARMLS
	Sales	YoY Change Sales	Cash Sales	Percent Cash	Active Inventory	YoY Change Inventory
Oct-08	5,384	---	1,348	25.0%	55,7031	---
Oct-09	8,121	50.8%	2,688	33.1%	39,312	-29.4%
Oct-10	6,591	-18.8%	2,800	42.5%	45,252	15.1%
Oct-11	7,561	14.7%	3,336	44.1%	27,266	-39.7%
Oct-12	7,020	-7.2%	3,081	43.9%	22,702	-16.7%
Oct-13	6,038	-14.0%	1,910	31.6%	26,267	15.7%
Oct-14	6,186	2.5%	1,712	27.7%	27,760	5.7%
1 October 2008 probably includes pending listings