by Calculated Risk on 10/31/2009 08:31:00 AM

The media, and apparently FDIC employees, gather outside San Diego National Bank just minutes before the bank was seized last night. Photo credit: Lee. The mural is by Wyland.

This is one of the nine banks seized yesterday by the FDIC; a record for one week during this cycle. The second photo apparently shows the FDIC employees gathering beneath the whales ... Photo credit: Lee.

The FDIC closed nine more banks on Friday, and that brings the total FDIC bank failures to 115 in 2009. The following graph shows bank failures by week in 2009.

Click on graph for larger image in new window.

Note: Week 1 on graph ends Jan 9th.

After a busy summer, the FDIC slowed down in late September and early October with only five bank failures in four weeks. Now it appears the pace has picked up again. With 9 weeks to go, it seems 150 or so bank failures is likely this year.

The 2nd graph covers the entire FDIC period (annually since 1934).

This is the most failures per year since 1992 (181 failures).

As far as failures per week - there were 28 weeks during the S&L crisis when regulators closed 10 or more banks, and the peak was April 20, 1989 with 60 bank closures (there were 7 separate weeks with more than 30 closures in the late '80s and early '90s).

For a graph that includes the 1920s and early '30s (before the FDIC was enacted) see the 3rd graph here.

Of course the number of banks isn't the only measure. Many banks today have more branches, and far more assets and deposits. Also the cumulative estimated losses for the DIF, since early 2007, is now about $47.5 billion.

The FDIC era source data is here - including by assets (in most cases) - under Failures and Assistance Transactions

The pre-FDIC data is here.

by Calculated Risk on 10/30/2009 11:59:00 PM

Note: This was before the FDIC seized banks related to FBOP today.

This is an unofficial list of Problem Banks.

Changes and comments from surferdude808:

The Unofficial Problem Bank List crossed a major threshold this week as 500 institutions are now listed.

The list grew by a net 18 institutions this week and nearly $44 billion in assets were added. Most of the increase comes is a result of the FDIC finally releasing its actions for September 2009. It will take another month to get their actions for October 2009.

The FDIC released 25 cease & desist order and 2 Prompt Corrective Actions. The list already included 8 of these 25 as they were identified through 8-K filings, media reports, or the State Banking Department of Illinois’ website.

From last week’s list, we dropped the 6 failures last Friday and another one that had failed back in July. Also, the FDIC issued a Cease & Desist Order on September 28, 2009 against Hillcrest Bank Florida that failed last Friday; hence, it never had time to appear on the list.

Most notable among the new additions are R-G Premier Bank of Puerto Rico ($6.5 billion); Central Pacific Bank, Honolulu, HI ($5.5 billion); and West Coast Bank, Lake Oswego, OR ($2.6 billion). The other 22 institutions added had an average asset size of $262 million.

Looking at the additions from a geographic perspective, there were four institutions headquartered in Washington, and two each in Florida, Georgia, Minnesota, and Wisconsin. There is a new addition from the FDIC issuing a Prompt Corrective Action Order on September 18th against Washita State Bank, Burns Flat, OK. Although not new to the list as they have been operating under a formal action, there were two other Prompt Corrective actions added. First, the OTS issued a PCA order on October 22nd against Century Bank, a Federal Savings Bank, Sarasota, FL; and the Federal Reserve issued a PCA order on October 27th against SolutionsBank, Overland Park, KS.

The list is compiled from regulator press releases or from public news sources (see Enforcement Action Type link for source). The FDIC data is released monthly with a delay, and the Fed and OTC data is more timely. The OCC data is a little lagged. Credit: surferdude808.

See description below table for Class and Cert (and a link to FDIC ID system).

For a full screen version of the table click here.

The table is wide - use scroll bars to see all information!

NOTE: Columns are sortable - click on column header (Assets, State, Bank Name, Date, etc.)





Class: from FDIC

The FDIC assigns classification codes indicating an institution's charter type (commercial bank, savings bank, or savings association), its chartering agent (state or federal government), its Federal Reserve membership status (member or nonmember), and its primary federal regulator (state-chartered institutions are subject to both federal and state supervision). These codes are:

N National chartered commercial bank supervised by the Office of the Comptroller of the Currency

SM State charter Fed member commercial bank supervised by the Federal Reserve

NM State charter Fed nonmember commercial bank supervised by the FDIC

SA State or federal charter savings association supervised by the Office of Thrift Supervision

SB State charter savings bank supervised by the FDIC

Cert: This is the certificate number assigned by the FDIC used to identify institutions and for the issuance of insurance certificates. Click on the number and the Institution Directory (ID) system "will provide the last demographic and financial data filed by the selected institution".

by Calculated Risk on 10/30/2009 10:13:00 PM

Eight is not enough
Nine set the bar much higher
Ten won't be the peak.
by Soylent Green is People
From the FDIC: U.S. Bank, NA, of Minneapolis, Minnesota, Assumes All of the Deposits of Nine Failed Banks in Arizona, California, Illinois and Texas

The Federal Deposit Insurance Corporation (FDIC) entered into a purchase and assumption agreement with U.S. Bank, NA, of Minneapolis, Minnesota, a wholly-owned subsidiary of U.S. Bancorp, to assume all of the deposits and essentially all of the assets of nine failed banks. ...

The nine banks involved in today's transaction are: Bank USA, National Association, Phoenix, Arizona; California National Bank, Los Angeles, California; San Diego National Bank, San Diego, California; Pacific National Bank, San Francisco, California; Park National Bank, Chicago, Illinois; Community Bank of Lemont, Lemont, Illinois; North Houston Bank, Houston, Texas; Madisonville State Bank, Madisonville, Texas; and Citizens National Bank, Teague, Texas. As of September 30, 2009, the banks had combined assets of $19.4 billion and deposits of $15.4 billion.

The nine banks had 153 offices...

The FDIC estimates that the cost of the nine banks to the DIF will be a combined $2.5 billion. U.S. Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. The failure of the nine banks brings the nation's total number this year to 115.

Nine in one shot ...

by Calculated Risk on 10/30/2009 07:54:00 PM

While we wait for the FDIC ... it could get real busy ...

From the Chicago Tribune: U.S. set to seize FBOP, congressmen say (ht Josh)

Federal regulators are expected to seize Friday night the banks owned by Oak Park-based FBOP Corp., the troubled owner of Park National Bank of Chicago and eight other U.S. banks, people familiar with the situation say.

A takeover would occur even after several U.S. Congressman from the Illinois area, including Reps. Bobby Rush and Danny Davis and Sen. Roland Burris, called the FDIC asking it to hold off on closing the bank for at least a week, said Marilyn Katz, a spokeswoman for the bank.

And another report in California: Pacific National Bank Going to FDIC (ht Vladimir)

San Francisco-based Pacific National Bank is being eyeballed for takeover by federal authorities, according to several sources in the Silicon Valley and San Francisco commercial real estate industry. ... The Federal Deposit Insurance Corp. was expected to take control as early as this afternoon. ... The bank ... reported assets of $2.1 billion

by Calculated Risk on 10/30/2009 05:40:00 PM

Here is the monthly Fannie Mae hockey stick graph ...

Click on graph for larger image in new window.

Fannie Mae reported today that the rate of serious delinquencies - at least 90 days behind - for conventional loans in its single-family guarantee business increased to 4.45% in August, up from 4.17% in July - and up from 1.57% in August 2008.

"Includes seriously delinquent conventional single-family loans as a percent of the total number of conventional single-family loans. These rates are based on conventional single-family mortgage loans and exclude reverse mortgages and non-Fannie Mae mortgage securities held in our portfolio."

Just more evidence of the growing delinquency problem, although these stats do include Home Affordable Modification Program (HAMP) loans in trial modifications.

by Calculated Risk on 10/30/2009 04:00:00 PM

Remember that rally yesterday? All gone and then some ...

Click on graph for larger image in new window.

From Doug Short of dshort.com (financial planner).

Note that the Great Depression crash is based on the DOW; the three others are for the S&P 500.

The S&P was off 2.8% today ...

A great interview on Tech Ticker: "Still a Very Shaky Sort of World Recovery," FT's Martin Wolf Says

Martin Wolf, chief economics commentator for The Financial Times, talks about the U.S. and world economy.

"It's very difficult to believe in a really strong consumer-led recovery in the U.S.. I think this is still a very shaky sort of world recovery."

And on the stock market:

"I think the market actually did a probably not unreasonable job - that is why I think it is not much of a bubble - of anticipating what was going to happen. And you sell on the news, isn't that the story? You buy on the hope and you sell on the news. We now know there is a reasonable recovery. By the way, in the early phases of a recovery, 3.5% annualized growth is not sensational by American standards. And remember if the U.S. is going to reduce its unemployment we will want to see annual growth - not annualized growth - of 4% to 5%."
emphasis added

And from Bloomberg: Wilbur Ross Sees ‘Huge’ Commercial Real Estate Crash (ht James, others)

Billionaire investor Wilbur L. Ross Jr., said today the U.S. is in the beginning of a “huge crash in commercial real estate.”

“All of the components of real estate value are going in the wrong direction simultaneously,” said Ross, one of nine money managers participating in a government program to remove toxic assets from bank balance sheets. “Occupancy rates are going down. Rent rates are going down and the capitalization rate -- the return that investors are demanding to buy a property -- are going up.”

I'm not sure this is the beginning of a "huge crash" - prices are already down 41% from the peak according to the Moody’s/REAL Commercial Property Price Indices!

Note: on CRE, also see MIT Professor David Geltner discussion on the CPII and the differences between price declines for healthy and distressed properties: Where we are in the aggregate: A two-year anniversary ...

by Calculated Risk on 10/30/2009 02:08:00 PM

From the WSJ: CIT, Icahn Reach Tentative Deal Over Lender's Restructuring

As part of further discussions with CIT, Mr. Icahn has agreed to back down while the company restructures in bankruptcy court. ...

The company plans to file for bankruptcy in New York as soon as Sunday night or early Monday, said people familiar with the matter. CIT is poised to enter bankruptcy with enough creditor support to approve its reorganization plan and shorten its stay in Chapter 11 ...

... CIT asked bondholders to vote on a prepackaged bankruptcy plan, which would give most bondholders new debt it values at 70 cents on the dollar, and all the equity in a restructured company.

This debt-for-equity swap makes the most sense and would allow CIT to continue to operate.

Note: CIT provides financing for about one million small businesses, so a prepackaged bankruptcy that allows the company to continue to operate would be helpful. Small businesses are already having trouble obtaining credit, and this might be impacting hiring plans (see from Melinda Pitts at Macroblog: Prospects for a small business-fueled employment recovery )

by Calculated Risk on 10/30/2009 11:21:00 AM

Click on graph for larger image in new window.

Unfortunately the data for this index only goes back to 2002.

The restaurant business is still contracting ...

Note: Any reading below 100 shows contraction for this index. The index is a year-over-year index, so the headline index might be slow to recognize a pickup in business, but the underlying details suggests ongoing weakness.

From the National Restaurant Association (NRA): Restaurant Industry Outlook Remained Uncertain as Restaurant Performance Index Declined in September for Second Consecutive Month

[T]he National Restaurant Association’s ... Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 97.5 in September, down 0.4 percent from August and its 23rd consecutive month below 100.
...
The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 96.0 in September – unchanged from August and tied for the second-lowest level on record. In addition, September represented the 25th consecutive month below 100, which signifies contraction in the current situation indicators.
...
The outlook for capital spending fell considerably from recent months. Thirty-seven percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, down sharply from 45 percent who reported similarly last month.
emphasis added

by Calculated Risk on 10/30/2009 09:48:00 AM

Click on cartoon for larger image in new window. Cartoon from Eric G. Lewis www.EricGLewis.com (site coming soon)

Actually the recession is not "officially" over until the National Bureau of Economic Research (NBER) determines the end of the recession.

It took the National Bureau of Economic Research (NBER) Business Cycle Dating Committee over a year and half after the 2001 recession ended to call the trough of the cycle. And it took 21 months after the 1990-1991 recession ended for NBER to date the end of the recession.

The previous NBER announcements make it clear that NBER will not date the trough of the recession until certain economic indicators - like real GDP - are above the pre-recession levels. Any downturn before economic activity reaches pre-recession levels will probably be considered a continuation of the recession that started in December 2007.

Here is the NBER dating procedure.

by Calculated Risk on 10/30/2009 08:38:00 AM

From the BEA: Personal Income and Outlays, September 2009

Personal income decreased $0.1 billion, or less than 0.1 percent, and disposable personal income (DPI) decreased $0.2billion, or less than 0.1 percent, in September, according to the Bureau of Economic
Analysis. Personal consumption expenditures (PCE) decreased $47.2 billion, or 0.5 percent.
...
Real DPI -- DPI adjusted to remove price changes -- decreased 0.1 percent in September, compared with a decrease of 0.2 percent in August.

Real PCE -- PCE adjusted to remove price changes -- decreased 0.6 percent in September, in contrast to an increase of 1.0 percent in August.
...
Personal saving -- DPI less personal outlays -- was $355.6 billion in September, compared with $307.0 billion in August. Personal saving as a percentage of disposable personal income was 3.3 percent in September, compared with 2.8 percent in August.

Click on graph for large image.

This graph shows the saving rate starting in 1959 (using a three month centered average for smoothing) through the September Personal Income report. The saving rate was 3.3% in September. (3.1% with three month average)

Although the saving rate declined in Q3, households are still saving more than during the last few years (when the saving rate was around 1.0%). The saving rate will probably continue to rise as households save more to repair their household balance sheets (and because an aging population usually pushes the saving rate higher) This increase in the saving rate - if it happens as expected - will keep pressure on personal consumption expenditures for the next year or two.