6 More Closures in What Might be the Final Fed Friday of 2010

If regulator actions around Thanksgiving are any guideline, the approaching two holiday weekends suggest that this week may be the last Fed Friday of the year. This week 3 banks in the Top 40, two of which were in the top 10, were closed by regulators.

United Americas Bank, N.A. finally succumbed to regulators this week. The Atlanta based bank ranked 2nd on the most recent list. United Americas Bank had approximately $242.3 million in total assets and $193.8 million in total deposits was closed. State Bank and Trust Company (336th) of Macon, GA has assumed all deposits. United Americas Bank is the 10th failed bank acquired by State Bank and Trust.

Also among the nation's riskiest banks, 7th ranked The Bank of Miami, N.A. of Coral Gables, FL closed this week. It had approximately $448.2 million in total assets and $374.2 million in total deposits was closed. 1st United Bank (3226th) of Boca Raton, FL has taken over the deposits and branch operations.

23rd ranked Chestatee State Bank of Dawsonville, GA with approximately $244.4 million in total assets and $240.5 million in total deposits was closed. Bank of the Ozarks (3061st) of Little Rock, AR has agreed to assume all deposits. Chestatee State Bank is the 4th bank acquired to be acquired by Bank of the Ozarks. Previously acquired were Horizon Bank, Woodlands Bank, and Unity National Bank raising total assets for the firm to approximately $3.4 billion.

177th ranked, Community National Bank of Lino Lakes, MN with approximately $31.6 million in total assets and $28.8 million in total deposits was closed. Farmers & Merchants Savings Bank (4185th) of Manchester, IA, has agreed to assume all deposits.

First Southern Bank of Batesville, AR with approximately $191.8 million in total assets and $155.8 million in total deposits was closed. Southern Bank (2764th) of Poplar Bluff, MO has agreed to assume nearly all deposits.

The closing of this bank came as something of a surprise to The Bank Blog as it had a ranking well into the thousands. It was recently discovered that First Southern was the victim of a fraudulent purchase of $22 million in fake bonds. With a capitalization rate of about 10% this fraud easily pushed the bank from well capitalized to having negative equity, forcing regulators to take immediate action. It also leaves The Bank Blog asking one very important question: Why would any bank buy one bond or series of bonds totaling such a significant portion of their assets?

An OTS regulated savings bank, Appalachian Community Bank of McCaysville, GA also closed this week. It had approximately $68.2 million in total assets and $76.4 million in total deposits. 1263rd ranked, Peoples Bank of East Tennessee headquartered in Madisonville, TN has agreed to assume all deposits.

Two Small Banks Leadoff December Failures

After 3 weeks of calm in the banking sector, 2 more banks have fallen to Fed Friday's axe. On Nov. 25th, The Bank Blog reported that the number of problem banks had risen in the new forecasts. The relatively lower rankings of the first two firms to fail this month appear to be consistent with that prediction.

70th ranked Paramount Bank of Farmington Hills, MI failed with approximately $252.7 million in total assets and $213.6 million in total deposits. Level One Bank (4763rd) also of Farmington Hills has agreed to nearly all deposits.

The closing of 145th ranked Earthstar Bank of Southampton, PA highlights how banking problems may be spreading further down the list then previously anticipated. Earthstar had approximately $112.6 million in total assets and $104.5 million in total deposits when closed. OTS regulated Polonia Bank of Huntingdon Valley, PA has agreed to assume all deposits.

Previous failures were isolated to the weakest 1.5% of all commercial banks. On the previous list a bank at the same rank as Earthstar would have had a roughly 23% chance of facing closure in the subsequent year. Now, that level has increase to 40%. While most banks remain sound, this suggests that there are more borderline banks then previously thought and that there is likely to be a higher number of failures for some time to come.

The Nov. 2010 Top 40

Despite a number of additional bank failures over the last 3 months and a slight improvement overall in the health of the banking sector, a large number of banks continue to struggle. In fact, the number of problem banks increased to 860 in the current quarter. This is the largest level of problem banks seen since 1993.

With all this in mind, it is time for a new Top 40 listing. The Bank Blog has refined a few of it's measures which should improve model predictability. Expected failure rates are roughly 20% higher on average for banks on the list. Returning banks from the prior list are in bold and closed banks are in italics.

1. FIRST COMMERCIAL BANK OF FLORIDA of ORLANDO, FL
2. UNITED AMERICAS BANK, N.A. of Atlanta, GA
3. LEGACY BANK of MILWAUKEE, WI
4. ALL AMERICAN BANK of DES PLAINES, IL
5. FIRSTIER BANK of LOUISVILLE, CO
6. ENTERPRISE BANKING COMPANY of McDonough, GA
7. THE BANK OF MIAMI, N.A. of CORAL GABLES, FL
8. SOUTHERN COMMERCE BANK, N.A. of TAMPA, FL
9. THE FIRST NATIONAL BANK OF OLATHE of OLATHE, KS
10. THE BANK OF ASHEVILLE of ASHEVILLE, NC
11. CENTRUST BANK, N.A. of NORTHBROOK, IL
12. BANK OF LAS VEGAS of LAS VEGAS, NV
13. NORTH GEORGIA BANK of WATKINSVILLE, GA
14. MONTGOMERY BANK & TRUST of Ailey, GA
15. THE BANK OF COMMERCE of WOOD DALE, IL
16. THE FIRST NATIONAL BANK OF FLORIDA of MILTON, FL
17. MCINTOSH STATE BANK of Jackson, GA
18. SUNRISE BANK OF ARIZONA of PHOENIX, AZ
19. AMERICAN TRUST BANK of Roswell, GA
20. MICHIGAN COMMERCE BANK of ANN ARBOR, MI
21. THE FIRST STATE BANK of Stockbridge, GA
22. FIRST GUARANTY BANK AND TRUST COMPANY of JACKSONVILLE, FL
23. CHESTATEE STATE BANK of Dawsonville, GA
24. WESTERN SPRINGS NATIONAL BANK AND TRUST of Western Springs, IL
25. FIRST COMMUNITY BANK of Taos, NM
26. HABERSHAM BANK of Clarkesville, GA
27. COMMUNITYONE BANK, N.A. of Asheboro, NC
28. PISGAH COMMUNITY BANK of Asheville, NC
29. THE ROYAL PALM BANK OF FLORIDA of Naples, FL
30. FIRST NATIONAL BANK OF CENTRAL FLORIDA of Winter Park, FL
31. FIRST SOUND BANK of Seattle, WA
32. FIRST CHOICE COMMUNITY BANK of Dallas, GA
33. OPTIMUMBANK of Plantation, FL
34. BUILDERS BANK of Chicago, IL
35. FIRST COMMERCIAL BANK OF TAMPA BAY of Tampa, FL
36. OGLETHORPE BANK of Brunswick, GA
37. CITIZENS BANK OF EFFINGHAM of Springfield, GA
38. THE BRAND BANKING COMPANY of Lawrenceville, GA
39. 1ST COMMERCE BANK of North Las Vegas, NV
40. CANYON NATIONAL BANK of Palm Springs, CA


Disclaimer:

The content of this web site is for general information purposes only and does not constitute advice. The author tries to provide content that is true and accurate as of the date of writing; however, we give no assurance or warranty regarding the accuracy, timeliness, or applicability of any of the contents. Visitors should not act upon content or information without first seeking appropriate professional advice.

The author accepts no responsibility for and excludes all liability in connection with browsing this Web site, use of information or downloading any materials from it, including but not limited to any liability for errors, inaccuracies, omissions, or misleading or defamatory statements. The information at this Web site might include opinions or views which, unless expressly stated otherwise, are not necessarily those of the author.

All content and information might be changed or updated without notice.

Recap - How did the last quarter predictions fare?

A total of 19 banks in the Top 40 were closed in the last two months, or 47.5% of the entire sample. This comes as little surprise to The Bank Blog given the predicted likelihood of failure for each. What is more interesting is why have the other banks not been closed? As we see from the earlier post about Wilmington Trust Bank, which was classified as a bank with "Issues" based on it's 2-10% chance of failure, there are other forms of resolution for banks with difficulties. So what, if anything, has happened with the survivors?

1. SUNRISE BANK OF ATLANTA of Atlanta, GA
2. PISGAH COMMUNITY BANK of Asheville, NC
3. SUNRISE BANK OF ARIZONA of Phoenix, AZ
9. MICHIGAN COMMERCE BANK of Ann Arbor, MI
15. BANK OF LAS VEGAS of Las Vegas, NV

All owned by Capital Bancorp Limited. Capital Bancorp has consolidated, divested or otherwise re-capitalized a significant number of it's banks in various states. In general, it appears those banks that were healthy enough not to appear on this list were the most desirable acquisition targets. Nonetheless, their activities have held off closure of these other charters. It will be interesting to see how the rank on the next listing.

7. SOUTHERN COMMERCE BANK, NA of Tampa, FL
12. SUNBANK, NATIONAL ASSOCIATION of Phoenix, AZ
39. BANK MIDWEST, NATIONAL ASSOCIATION of Kansas City, MO

These 3 banks were all held by the same holding company Dickinson Financial Corporation. The majority of the branches of Dickinson were sold to NBH Holdings Corp.

8. FIRST SOUND BANK of Seattle, WA - $3.2 million raise in a private placement.
13. ALL AMERICAN BANK of Des Plaines, IL
17. TREATY OAK BANK of Austin, TX - Getting acquired by Carlile Bancshares
19. CENTRAL PACIFIC BANK of Honolulu, HI - Announced plans to raise $325 million.
22. PLANTERSFIRST of Cordele, GA
24. FIRST COMMUNITY BANK of Taos, NM - In discussions with investors
29. CHARTER OAK BANK of Napa, CA - Merged with Bay Commercial Bank
32. FIRST CHOICE COMMUNITY BANK of Dallas, GA
34. AMERICANA COMMUNITY BANK of Sleepy Eye, MN
36. HANMI BANK of Los Angeles, CA - Raised $120 million in new equity.
37. STATE CENTRAL BANK of Keokuk, IA
38. EVERGREEN STATE BANK of Stoughton, WI
40. THE BANK OF ASHEVILLE of Asheville, NC

Couldn't Avoid the Gulf

18th ranked Gulf State Community Bank of Carrabelle, FL was swallowed up by regulators this week. Gulf State closed with approximately $112.1 million in total assets and $112.2 million in total deposits was closed. Centennial Bank (4347th) of Conway, AR has agreed to assume nearly all deposits deposits. This is the 6th bank that Centennial has acquired in the area through closures.

21st ranked First Banking Center (FBC) of Burlington, WI has also been closed this week. On Aug. 17th, FBC received a Prompt Corrective Action from regulators giving them 60 days to shore up their finances. This week their time ran out and the slightly larger bank of approximately $750.7 million in total assets and $664.8 million in total deposits was closed. First Michigan Bank (6477th) of Troy, MI has agreed to assume all deposits.

84th ranked Allegiance Bank of North America from Bala Cynwyd, PA also closed this week. Allegiance had approximately $106.6 million in total assets and $92.0 million in total deposits was closed. VIST Bank (1860th) of Wyomissing, PA has agreed to assume all deposits.

Fed Friday Takes Two Georgia Banks

This week, the demise of Georgia-based banks continued as two more firm closed. 23rd ranked Tifton Banking Company of Tifton, GA had approximately $143.7 million in total assets and $141.6 million in total deposits. 370th ranked Ameris Bank of Moultrie, GA has agreed to assume nearly all deposits. Ameris also acquired 66th ranked Darby Bank & Trust Co. of Vidalia, GA. In all, they have acquired the branches of 6 other closed banks since the start of the current banking crisis. Darby Bank had approximately $654.7 million in total assets and $587.6 million in total deposits.

Tifton Banking Company was not the only "Top 40" bank to fail this week. 25th ranked Copper Star Bank of Scottsdale, AZ also closed with approximately $204.0 million in total assets and $190.2 million in total deposits. Stearns Bank, N.A. (6505th) of Saint Cloud, MN has agreed to assume all deposits excluding the Cede & Co. deposits.

In all, 17 of the 40 banks listed have failed in the last 8 weeks.

M&T Bank Acquires Another Struggling Bank

For the second time this week, Manufacturers and Traders Bank (M&T) of Buffalo, NY has acquired a struggling bank. After being closed today by regulators, nearly all of the deposits of K Bank of Randallstown, MD were assumed by M&T. Just a few days ago M&T Bank offered to acquire Wilmington Trust Bank in nearby Delaware. K Bank was the 58th ranked bank on the list and had approximately $538.3 million in total assets and $500.1 million in total deposits when closed.

64th ranked Pierce Commercial Bank, of Tacoma, WA closed with approximately $221.1 million in total assets and $193.5 million in total deposits. Heritage Bank (4070th) of Olympia, WA has agreed to assume all deposits.

88th ranked First Vietnamese American Bank of Westminster, CA closed with approximately $48.0 million in total assets and $47.0 million in total deposits. Grandpoint Bank of Los Angeles, CA has agreed to assume all deposits excluding certain brokered deposits. Grandpoint Bank is owned by Grandpoint Capital which began in June 2010 through the acquisition of Santa Ana Business Bank (7015th). It has since been the buyer of a number of small banks.

106th ranked Western Commercial Bank of Woodland Hills, CA has also closed this week. It had approximately $98.6 million in total assets and $101.1 million in total deposits. First California Bank (5750th) of Westlake Village, CA has agreed to assume all deposits.

M&T Acquires Struggling Wilmington Trust

The Wall Street Journal reported today that M&T Bank acquired Wilmington Trust at a 46% discount over (or perhaps under is more accurate) its stock price. While over 90% of all bank failures seem to come from the weakest 1.5% of banks, this does not mean that banks further down the list are not also constrained in terms of their ability to operate. This has been the rationale behind presenting the rank of acquiring banks when possible each week. M&T is an incredibly healthy 6408th on the current list. Wilmington Trust? They are 383rd. If you factor in the roughly 3-5% probability of failure, their cost structure may simply be too great to continue as a going concern.

Fed Friday Claims Seven More Failed Banks

It was a big day for bad banks, with the most closings in two months. In all, 4 Top 40 banks failed. While much of U.S. was covered this week, the majority of the closings were in southeast. An area particularly hard hit during the current banking crisis, another 2 banks in Florida and 2 in Georgia were among the casualties. The list includes both small and somewhat larger banks as shown:

10th ranked, First Bank of Jacksonville, Jacksonville, FL with approximately $81.0 million in total assets and $77.3 million in total deposits was closed. Ameris Bank (3760th) of Moultrie, GA has agreed to assume all deposits.

11th ranked, Hillcrest Bank of Overland Park, KS. Hillcrest was the largets bank to close this week with approximately $1.65 billion in total assets and $1.54 billion in total deposits. A new bank of the same name, Hillcrest Bank, N.A., has been set up and has agreed to takeover the failed bank.

31st ranked, The Gordon Bank of Gordon, GA was the smallest bank to close this week. assets totaled less than $29.4 million with $26.7 million in total deposits. Morris Bank (906th) of Dublin, GA has agreed to assume all deposits.

33rd ranked, Progress Bank of Florida, Tampa, FL with approximately $110.7 million in total assets and $101.3 million in total deposits was closed. Bay Cities Bank (4185th) of Tampa, FL has agreed to assume nearly all deposits.

152nd ranked First Suburban National Bank of Maywood, IL closed with some $148.7 million in total assets and $140.0 million in total deposits was closed. Seaway Bank and Trust Company (2851st) of Chicago, IL has agreed to assume nearly all deposits.

The next bank on the list, 153rd ranked The First National Bank of Barnesville, GA also failed this week. It had approximately $131.4 million in total assets and $127.1 million in total deposits was closed. United Bank (2522nd) of Zebulon, GA has agreed to assume nearly all deposits.

Finally, First Arizona Savings, A FSB of Scottsdale, AZ closed as well. As an OTS bank it was un-ranked. First Arizona had $272.2 million in total assets and $198.8 million in total deposits. No acquirer could be found for the bank. As a result, the FDIC has approved the payout of the insured deposits of First Arizona Savings, A FSB.

Premier Bank Among This Week's Bank Closures

For the second week in a row, eastern U.S. based banks have been sparred from the chopping block. However, three central U.S. based banks have become our most recent casualties of the current banking crisis.

14th Ranked Premier Bank of Jefferson City, MO was shut down by regulators this week. Considerably larger then many of the smaller banks that have been closed in recent weeks, Premier had approximately $1.18 billion in total assets and $1.03 billion in total deposits at the time it was closed. Providence Bank (3043rd) of Columbia, MO has agreed to assume nearly all deposits excluding certain brokered deposits.

Just missing out on the list, 42nd ranked WestBridge Bank and Trust Company of Chesterfield, MO was closed today. WestBridge had approximately $91.5 million in total assets and $72.5 in total deposits. Midland States Bank (2038th) of Effingham, IL has agreed to assume essentially all deposits of the failed bank.

The second bank to close this week was Security Savings Bank (un-ranked OTS regulated bank), F.S.B of Olathe, KS. It had approximately $508.4 million in total assets and $397.0 million in total deposits was closed. Simmons First National Bank (1274th) of Pine Bluff, AR has agreed to assume all deposits.

The Feds Claim Two More Banks

Two Top 40 banks were closed by regulators this week.

The first was 20th ranked Wakulla Bank of Crawfordville, Florida, was closed today by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. As of June 30, 2010, Wakulla Bank had approximately $424.1 million in total assets and $386.3 million in total deposits. In addition to assuming all of the deposits of the failed bank, Centennial Bank (ranked 4347th) of Conway, AR agreed to assume nearly all deposits of the failed bank.

The second was 26th ranked Shoreline Bank of Shoreline, Washington. It had approximately $104.2 million in total assets and $100.2 million in total deposits as of the most recent quarter. GBC International Bank (2687th) of Los Angeles, CA has agreed to assume all deposits excluding certain brokered deposits.

When Does It Become A "Problem Bank?"

If you look at the most recent FDIC statistics on problem banks, you would see that there were 829 problem banks at the end of the last quarter. This is an increase of 127 banks in half a year even as the number of firms continues to fall from bank closures and mergers and acquisitions. The FDIC wont disclose who the problem banks are. This is in order to avoid making the bank's financial position even worse and exacerbating their chances of failure. One proxy is to look at the number of banks facing regulatory action, but not all actions are created equally and how the FDIC regards actions by other agencies is not clear. No doubt, you wouldn't want to hear that your bank had an action taken against it. But a small fine is a very different thing then a cease and desist order. Close scrutiny of the actions helps, although that is a lot to look through.

Even as 10% of banks have problems according to the FDIC, only about 2% are believed to close. So, 80% of these banks likely wont have issues so severe as to lead to a failure. Does this mean we have a large number of banks out there 10-20% likely to fail? Or are we looking at a smaller percentage of very risky banks and then a larger handful of "problem" banks that require attention but may be more in the 2-10% range. Certainly, a 2-10% chance in such a sensitive sector still requires scrutiny. But not the same level of fear of impending doom.

The Bank Blog decided to examine this issue. Based on the present model we break the number of banks down into 4 classes based on their risks of failure:

1. Struggling (greater than 50%) - 75 banks
2. Problems (between 10 and 50%) - 204 banks
3. Issues (between 2 and 10%) - 431 banks
4. Stable (less than 2%) - 6998 banks

Naturally, this list does not contain OTS regulated banks but the 730 banks in the higher 3 rankings should roughly approximate the number of "problem banks" in existence that issue call reports. Clearly, the differences in those banks is great.

Nothing Safe About Haven Trust Bank Florida

This week's first shutdown belongs to Haven Trust Bank Florida of Ponte Vedra Beach, Florida. At 28th on the list, Haven had approximately $148.6 million total assets and $133.6 million in total deposits. First Southern Bank (6308th) of Boca Raton, FL has agreed to assume nearly all deposits for the former bank.

The other bank to close this week was 90th ranked North County Bank of Arlington, WA. It had about $288.8 million total assets and $276.1 million in total deposits. Whidbey Island Bank (3646th) of Cupeville, WA has agreed to assume the deposits.

ISN Bank and Several Others ISNo More

This week's first failed bank is ISN Bank of Cherry Hill, NJ. You might remember ISN as the number 2 bank on the very first list that was posted here. After some model refinements, the bank managed to fall out of the then 25, now 40 listed firms. These listed banks are only the riskiest though and there are quite a few others that the models suggest are ripe for failure. ISN was such a bank as it still scored a dangerous 69th in the second quarter rankings. It had approximately $81.6 million in total assets and $79.7 million in total deposits when it failed. 1011th ranked New Century Bank of Phoenixville, PA has agreed to assume nearly all deposits of shuttered ISN Bank.

Georgia based banks, which last week topped the list in terms of most at risk, were particularly hard hit this week with 3 closures. All 3 banks were in the Top 40 and their branches were all acquired by a very sound Community & Southern Bank (5280th) of Carrollton, GA. Ohio based Bramble Bank and Wisconsin's Maritime Savings Bank also failed this week. In rank order:

1. Number 4, Bank of Ellijay of Ellijay, GA with approximately $168.8 million total assets and $160.7 million in total deposits closed.

2. Number 16, First Commerce Community Bank of Douglasville, GA with approximately $248.2 million total assets and $242.8 million in total deposits.

3. Number 27, The Peoples Bank of Winder, GA with approximately $447.2 million total assets and $398.2 million in total deposits.

4. Number 30, Bramble Savings Bank, Milford, OH with approximately $47.5 million total assets and $41.6 million in total deposits was closed. Foundation Bank of Cincinnati, OH (OTS regulated) has agreed to assume nearly all deposits.

5. Un-ranked (OTS) Maritime Savings Bank of West Allis, WI with approximately $350.5 million total assets and $248.1 million in total deposits. North Shore Bank, FSB (also OTS) of Brookfield, WI has agreed to assume nearly all deposits.

Cant See Past the Horizon

With the FDIC taking the last few weeks off from closing any banks, the Blog decided to take a week's hiatus itself. But this Fed Friday, the FDIC is back with their first closure of the month, Horizon Bank of Bradenton, Florida. Horizon Bank ranked 104th on the current list, placing it outside the Top 40 yet still fairly high in terms of failure risk (top 1.5% of banks). Horizon was a very small bank with approximately $187.8 million total assets and $164.6 million in total deposits. Bank of the Ozarks (3652nd) of Little Rock, AR agreed to assume nearly all deposits. Bank of the Ozarks purchased another defunct bank, Woodlands Bank of Bluffton, SC in mid-July.

With just one closing this week, banks are showing a remarkable resilience. How long it will last is anyone's guess. But chances are there will be a lot more failures to come in areas that are still being heavily impacted by the recent recession and housing crisis. In particular Georgia has 8 banks remaining (not yet closed) in the Top 40, Florida has 7 and Arizona and Wisconsin both have 3.

Live to Loan Another Day

Fed Friday was unusually quiet this week as the regulators took a late August holiday from closing any banks. This is the first week since early July in which no banks failed. During this summer stretch, 32 banks had been closed over 7 Fridays.

The Bank Blog decided to take this momentary calm to double check our models and review some new data that came in. One bank, Michigan Commerce Bank, has drawn greater regulatory scrutiny recently. This has pushed the bank from 9th to 4th most likely to fail (with Shorebank and Community National Bank at Bartow at 5th and 6th ranked respectively already having already failed).

FDIC Closes Bank With Ties to Obama Administration

At 5th on the new "Top 40" list for this quarter ShoreBank of Chicago, IL closed after extensive attempts to save the failing bank. ShoreBank has been credited with providing loans to many low income individuals and minority businesses in Chicago's Southside. In most respects a "classic" community bank, JP Morgan, Bank of America, Citigroup and other major banks all have played a role in trying to keep the bank going. ShoreBank had sizable assets of approximately $2.16 billion along with $1.54 billion in total deposits. But they could not escape the pressure of mounting losses and troubled loans.

A new entity, Urban Partnership Bank of Chicago, IL has agreed to assume nearly all deposits. Investors include Goldman Sachs Group Inc., General Electric Co., JPMorgan Chase & Co., Citigroup Inc. and several philanthropic groups, according to news reports.

At 6th on the list, Community National Bank at Bartow, FL closed today. It had approximately $67.9 million in total assets and $63.7 million in total deposits. It had lost $7.8 million in the first half of the year. CenterState Bank of Florida N.A. of Winter Haven, FL (3596th) has agreed to assume all deposits, excluding certain brokered deposits.

Also on the list, 35th ranked Independent National Bank of Ocala, FL closed as well. It had approximately $156.2 million in total assets and $141.9 million in total deposits. Losses for the first half of the year total led $7.2 million. CenterState Bank of Florida N.A.,also agreed to assume the deposits of this bank.

6687th ranked Rabobank, N.A. (6659th) of El Centro, CA also became the acquirer of two failed banks today. 78th ranked Pacific State Bank of Stockton, CA was one. Pacific State had approximately $312.1 million in total assets and $278.8 million in total deposits. The other, 99th ranked Butte Community Bank of Chico, CA had approximately $498.8 million in total assets and $471.3 million in total deposits.

At 178th Sonoma Valley Bank of Sonoma, CA with approximately $337.1 million in total assets and $255.5 million in total deposits was closed. Westamerica Bank (4038) of San Rafael, CA has agreed to assume all deposits.


Un-ranked (OTS regulated banks are not ranked) Imperial Savings and Loan Association of Martinsville, VA closed with approximately $9.4 million in total assets and $10.1 million in total deposits. River Community Bank, N.A of Martinsville, VA has agreed to assume all deposits. River Community Bank is a stable 1599th on the list, although earnings for the first half of the year were essentially flat.

Un-ranked Los Padres Bank of Solvang, CA with approximately $870.4 million in total assets and $770.7 million in total deposits was closed. Pacific Western Bank (1131st) of San Diego, CA has agreed to assume all deposits.

The New "Top 25"

The underlying data has been updated and a new, preliminary list is ready. The new "Top 25" is actually a Top 40 based on the number of failures we saw in the last 3 months. Banks that remain on the list (or have returned from an earlier version) are in bold. Banks that have closed are in italics.

1. SUNRISE BANK OF ATLANTA of Atlanta, GA
2. PISGAH COMMUNITY BANK of Asheville, NC
3. SUNRISE BANK OF ARIZONA of Phoenix, AZ
4. BANK OF ELLIJAY of Ellijay, GA
5. SHOREBANK of Chicago, IL
6. COMMUNITY NATIONAL BANK AT BARTOW of Bartow, FL
7. SOUTHERN COMMERCE BANK, NA of Tampa, FL
8. FIRST SOUND BANK of Seattle, WA
9. MICHIGAN COMMERCE BANK of Ann Arbor, MI
10. FIRST BANK OF JACKSONVILLE of Jacksonville, FL
11. HILLCREST BANK of Overland Park, KS
12. SUNBANK, NATIONAL ASSOCIATION of Phoenix, AZ
13. ALL AMERICAN BANK of Des Plaines, IL
14. PREMIER BANK of Jefferson City, MO
15. BANK OF LAS VEGAS of Las Vegas, NV
16. FIRST COMMERCE COMMUNITY BANK of Douglasville, GA
17. TREATY OAK BANK of Austin, TX
18. GULF STATE COMMUNITY BANK of Carrabelle, FL
19. CENTRAL PACIFIC BANK of Honolulu, HI
20. WAKULLA BANK of Crawfordville, FL
21. FIRST BANKING CENTER of Burlington, WI
22. PLANTERSFIRST of Cordele, GA
23. TIFTON BANKING COMPANY of Tifton, GA
24. FIRST COMMUNITY BANK of Taos, NM
25. COPPER STAR BANK of Scottsdale, AZ
26. SHORELINE BANK of Shoreline, WA
27. THE PEOPLES BANK of Winder, GA
28. HAVEN TRUST BANK FLORIDA of Ponte Verda Beach, FL
29. CHARTER OAK BANK of Napa, CA
30. BRAMBLE SAVINGS BANK of Milford, OH
31. GORDON BANK, THE of Gordon, GA
32. FIRST CHOICE COMMUNITY BANK of Dallas, GA
33. PROGRESS BANK OF FLORIDA of Tampa, FL
34. AMERICANA COMMUNITY BANK of Sleepy Eye, MN
35. INDEPENDENT NATIONAL BANK of Ocala, FL
36. HANMI BANK of Los Angeles, CA
37. STATE CENTRAL BANK of Keokuk, IA
38. EVERGREEN STATE BANK of Stoughton, WI
39. BANK MIDWEST, NATIONAL ASSOCIATION of Kansas City, MO
40. THE BANK OF ASHEVILLE of Asheville, NC

Disclaimer:

The content of this web site is for general information purposes only and does not constitute advice. The author tries to provide content that is true and accurate as of the date of writing; however, we give no assurance or warranty regarding the accuracy, timeliness, or applicability of any of the contents. Visitors should not act upon content or information without first seeking appropriate professional advice.

The author accepts no responsibility for and excludes all liability in connection with browsing this Web site, use of information or downloading any materials from it, including but not limited to any liability for errors, inaccuracies, omissions, or misleading or defamatory statements. The information at this Web site might include opinions or views which, unless expressly stated otherwise, are not necessarily those of the author.

All content and information might be changed or updated without notice.

The Final Failure of the Quarter

This week marks the 13th week of The Bank Blog. Hopefully, new predictions will be coming sometime during the next week representing the next quarter.

Our final closer was number 55 on the list, Palos Bank and Trust Company of Palos Heights, IL. Palos continues the trend of recent bank failures in small banks, specifically those with assets under $1 billion. As of the end of June, Palos Bank and Trust had total assets of approximately $493.4 million and $467.8 million in total deposits. First Midwest Bank of Itasca, IL (4538th) has agreed to assume all deposits.

So how did we do?

38 banks were seized during the quarter.

31 banks were included in our sample (the other 7 were OTS regulated and not covered). This was .44% of the 7,101 banks in the sample

4 of the Top 5 banks failed.
5 of the Top 10.
13 of the Top 25.
28 of the Top 100.

The worst 1.5% of banks by rankings included over 90% of failures.

The lowest ranked bank to fail was #262 Home Valley Bank.

Ravenswood is Nevermore

After 2 months without a bankruptcy in Illinois, Ravenswood Bank of Chicago, IL closed today with approximately $264.6 million in total assets and $269.5 million in total deposits was closed. Ravenswood is the 109th bank to be shutdown this year. Ravenswood was ranked 11th on the list (18th overall) so it should come as little surprise to readers. Northbrook Bank and Trust Company of Northbrook, IL (1394th) has agreed to assume all deposits, excluding certain brokered deposits.

As July Ends So Do Several More Banks

The final week of July brought with it the demise of 5 more small banks. This brings the monthly total to 22, including 7 of the newest Top 25, one of the worst months for closures in recent years. Florida, Georgia, and the Pacific Northwest were all hit again this week:

At 19th on the list (29th overall) Northwest Bank & Trust of Acworth, GA closed this week. It had approximately $167.7 million in total assets and $159.4 million in total deposits was closed. State Bank and Trust Company of Macon, Georgia (5286th) has agreed to assume all deposits, excluding certain brokered deposits.

At 56th, Coastal Community Bank of Panama City Beach, FL closed with approximately $372.9 million in total assets and $363.2 million in total deposits. Centennial Bank of Conway, AR (4158th) has agreed to assume all deposits. Centennial also acquired the deposits of Bayside Savings Bank of Port Saint Joe, FL (not ranked) this week.

At 79th, The Cowlitz Bank of Longview, WA, closed with approximately $529.3 million in total assets and $513.9 million in total deposits. Heritage Bank of Olympia, WA (4413th) has agreed to assume all deposits, excluding certain brokered deposits.

At 92nd, LibertyBank of Eugene, OR with approximately $768.2 million in total assets and $718.5 million in total deposits was closed. Home Federal Bank of Nampa, ID (not ranked) has agreed to assume all deposits.

Another Bad Week for Small Banks

Just one week after 6 small banks were closed, another 7 were shut down by regulators. None of these banks were larger than $1 billion in total assets and show just how hard hit these community oriented banks have become as the economy continues to struggle. The outcomes for these banks was no surprise, however. 4 of the 7 banks were Top 25 on the updated list. In the last month, 6 of the newest Top 25 have failed. This week's closures include:

1. At 6th on the current list (12th overall), Crescent Bank and Trust Company of Jasper, GA with approximately $1.01 billion in total assets and $965.7 million in total deposits was closed. The Renasant Bank of Tupelo, MS (4871st) has agreed to assume nearly all deposits.

2. At 18th on the current list (28th overall), Community Security Bank of New Prague, MN closed this week. It had approximately $108.0 million in total assets and $99.7 million in total deposits. Roundbank of Waseca, MN (4221st) has agreed to assume all deposits.

3. At 20th on the current list (30th overall), Williamsburg First National Bank of Kingstree, SC also closed this week with approximately $139.3 million in total assets and $134.3 million in total deposits. First Citizens Bank and Trust Company, Inc. of Columbia, SC (1053rd) has agreed to assume nearly all deposits.

4. At 22nd on the current list (32nd overall), Sterling Bank of Lantana, FL with approximately $407.9 million in total assets and $372.4 million in total deposits was closed. IBERIABANK of Lafayette, LA (764th) has agreed to assume nearly all deposits.

5. At 96th overall, Thunder Bank of Sylvan Grove, KS also closed this week. Thunder had approximately $32.6 million in total assets and $28.5 million in total deposits. The Bennington State Bank of Salina, KS (3889th) has agreed to assume nearly all deposits.

6. At 99th overall, SouthwestUSA Bank of Las Vegas, NV closed with approximately $214.0 million in total assets and $186.7 million in total deposits. Plaza Bank of Irvine, CA (4019th) has agreed to assume nearly all deposits.

7. At 262nd overall, Home Valley Bank of Cave Junction, OR with approximately $251.80 million in total assets and $229.6 million in total deposits was closed. South Valley Bank & Trust of Klamath Falls, OR (377th) has agreed to assume all deposits. Home Valley is the lowest (hence, least likely) bank on the list to fail to date. The probability for this bank was slightly under 10%.

A Big Week for Bad Banks

In one of the busiest weeks this year, 6 banks were closed today and all 3 Florida based banks were acquired by the same firm.

At number 10 on the current list (17th overall) was Metro Bank of Dade County of Miami, FL. It closed today with approximately $442.3 million in total assets and $391.3 million in total deposits.

At 43rd overall, First National Bank of the South of Spartanburg, SC closed today. It had approximately $682.0 million in total assets and $610.1 million in total deposits.

A new bank, NAFH National Bank of Miami, FL has agreed to acquire nearly all the deposits of both banks. NAFH also announced recently that it is investing in another under-capitalized bank, TIB Bank of Naples, FL which ranks at 239th on the list.

Several OTS regulated (and un-ranked) banks were also among this week's closures:

1. Mainstreet Savings Bank, FSB of Hastings, MI closed with approximately $97.4 million in total assets and $63.7 million in total deposits. Commercial Bank (838th) of Alma, MI has agreed to assume all deposits

2. Olde Cypress Community Bank of Clewiston, FL closed with approximately $168.7 million in total assets and $162.4 million in total deposits. CenterState Bank of Florida, National Association (3489th) of Winter Haven, FL has agreed to assume all deposits, excluding certain brokered deposits.

3. Turnberry Bank of Aventura, FL with approximately $263.9 million in total assets and $196.9 million in total deposits was closed. NAFH National Bank has agreed to assume all deposits as well.

4. Woodlands Bank of Bluffton, SC with approximately $376.2 million in total assets and $355.3 million in total deposits was closed. Bank of the Ozarks (3233rd) of Little Rock, AR has agreed to assume all deposits, excluding certain brokered deposits.

Ideal Federal Is Less Than Ideal

Ideal Federal Savings Bank of Baltimore, MD failed this week. It had approximately $6.3 million in total assets and $5.8 million in total deposits. Unfortunately, Ideal could not be ranked as it is an OTS regulated thrift and their database was not available for study.

Bay National Bank also of Baltimore, MD was closed as well. Bay ranked as the 37th most likely bank to fail, making it's probability of doing so quite high. Interestingly, with 36th ranked Nevada Security already failed along with 10 others above it, Bay National Bank would have been the 26th on the recently updated list.

Bay had approximately $282.2 million in total assets and $276.1 million in total deposits. Similarly named, Bay Bank, FSB of Lutherville, MD assumed all of the deposits of Bay National Bank. The similar name appears to be no coincidence, however. The OTS only just approved the new Bay Bank today. The new holding institution is called Jefferson Bancorp in Washington. As such there is no rating available for depositors of this "new" bank.

Added:

Two additional banks were closed later in the evening.

USA Bank of Port Chester, NY (15th on updated list, 24th overall) was closed. USA had approximately $193.3 million in total assets and $189.9 million in total deposits. The FDIC entered into a purchase and assumption agreement with New Century Bank (doing business as Customer’s 1st Bank) of Phoenixville, PA, to assume all of the deposits of USA Bank. New Century Bank is a stable 2356th on the list.

Home National Bank of Blackwell, OK (130th overall) was also closed. Scoring in the top 2% of banks in terms of instability this closure does not come as a surprise. But it does edge out Granite Community Bank of Granite Bay, Ca. (128th) as the least likely in our model at 24.8%. Home National Bank had approximately $644.5 million in total assets and $560.7 million in total deposits was closed. RCB Bank (4614th) of Claremore, OK has agreed to assume all deposits.

3 community banks failed this week

Number 11, Peninsula Bank of Englewood, FL was closed. Premier American Bank (a sound 6061st on the list) of Miami, FL has agreed to assume all deposits excluding certain brokered deposits.

Number 14, High Desert State Bank of Albuquerque, NM closed. First American Bank (2014th) of Artesia, NM, agreed to assume all deposits.

Number 58 (not listed), First National Bank of Savannah, GA closed. Savannah Bank, National Association of Savannah (3843rd), GA has agreed to assume all deposits, excluding certain brokered deposits.

Since the start of this list one month ago, 9 of the top 25 banks have failed. Enough that it seemed time to fill the list back out to 25, still, surviving banks:

1. PISGAH COMMUNITY BANK ASHEVILLE NC
2. MICHIGAN COMMERCE BANK ANN ARBOR MI
3. CENTRAL PACIFIC BANK HONOLULU HI
4. SOUTHERN COMMERCE BANK TAMPA FL
5. SUNBANK, NATIONAL ASSOCIATION PHOENIX AZ
6. CRESCENT BANK AND TRUST COMPANY JASPER GA
7. SHOREBANK CHICAGO IL
8. PREMIER BANK JEFFERSON CITY MO
9. SUNRISE BANK OF ARIZONA PHOENIX AZ
10. METROBANK OF DADE COUNTY MIAMI FL
11. RAVENSWOOD BANK CHICAGO IL
12. FIRST SOUND BANK SEATTLE WA
13. BLUE RIDGE SAVINGS BANK, INC ASHEVILLE NC
14. MCINTOSH STATE BANK JACKSON GA
15. USA BANK PORTCHESTER NY
16. HAVEN TRUST BANK FLORIDA PONTE VEDRA BEACH FL
17. ALL AMERICAN BANK of DES PLAINES, IL
18. COMMUNITY SECURITY BANK of NEW PRAGUE, MN
19. NORTHWEST BANK & TRUST of ACWORTH, GA
20. WILLIAMSBURG FIRST NATIONAL BANK of KINGSTREE, SC
21. COMMUNITY NATIONAL BANK AT BARTOW of BARTOW, FL
22. STERLING BANK of LANTANA, FL
23. MIDWEST COMMUNITY BANK of PLAINVILLE, KS
24. WESTBRIDGE BANK & TRUST COMPANY of CHESTERFIELD, MO
25. NORTH COUNTY BANK of ARLINGTON, WA

Not So Secure

This week's casualty was one of the many Nevada based banks that has been having difficulties. Nevada Security Bank of Reno, Nevada (also known as Silverado Bank of Roseville, CA) was closed today. Nevada Security was 36th on the list, just out of the top 25 so you will have to take my word for it. According to the model, they had about a coin flip's chance of survival with ongoing losses and low equity capital. Even in Reno, one should not have taken that bet. This is the 3rd Nevada based bank to fail this year and the 8th since September of 2008.

Washington First is Washington's 7th!

Today, Washington First International Bank of Seattle, Washington became the state's 7th bank to be closed this year. Washington First has approximately $521 million in assets and placed 21st on the list. Washington First has been faced with continuing losses and has drawn the scrutiny of the regulators previously. It is the 10th bank measured to be closed since the blog began on May 23rd and the 7th in the top 25.

A day for the best (of the worst)

Today, two more banks were shut down:

First National Bank of Rosedale, MS
Arcola Homestead Savings Bank of Arcola, IL

These were, no less than, the top 2 banks on the list. They had a near certain probability of failure (rounding error of 100%). Both were smaller banks with assets of $60.4 and $17.0 million respectively.

In 3 weeks, 4 of the top 5 banks have been shutdown. Only, Pisgah Community Bank of Asheville, NC remains with about $60 million in assets. In terms of the "Top 25" there are now 6 closures.

June 9th edit: There was a third bank added to the FDIC list after the time I wrote this entry. TierOne Bank of Lincoln, Nebraska was also closed. TierOne was the first Nebraska based bank to fail since Feb. 2009 and had considerable assets, over $3 billion. However, as an OTS regulated bank, they do not appear in the list. In the future, I hope to include these "savings banks" as well but the datasets used in this study do not include these banks.

In Memorial of...

With Memorial Day weekend beginning, let's spend a moment in thought of the 5 banks that have fallen to the FDIC this week.

Sunwest Bank of Las Vegas, Nv. At 9th on the list, it may only have been a matter of time for this bank that had already faced an enforcement action.

Granite Community Bank of Granite Bay, Ca. Ranked 128th of 7398 in the system still had a fairly high 27% chance according to the model.

Bank of Florida - Tampa of the obvious location.
Bank of Florida - Southeast of Naples, Fla.
Bank of Florida - Southwest of Fort Lauderdale, Fl.

The Bank of Florida, technically 3 separate banks, were all under threat of foreclosure. Southwest and Tampa were on the list at 5th and 20th on the list respectively. Southeast was just out of the top 25 at 27th on the list.

In two weeks 4 of the top 25 banks have been foreclosed upon and 4 of the 6 foreclosures have been in Florida. This got me wondering what states are most at risk? Using the Top 100 (not shown), there are 14 Florida-based banks. But the state leader appears to be Georgia with 15. Washington State follows with 9.

Added: Interestingly, the Wall Street Journal just wrote an article about contagion problems in Washington State.

Second predictions

Took the opportunity to update the data for the most recent quarter. The weights are the same as in the prior post but the list has changed noticeably. Also updated the output file to include bank locations.

1. FIRST NATIONAL BANK ROSEDALE MS
2. ARCOLA HOMESTEAD SAVINGS BANK ARCOLA IL
3. PISGAH COMMUNITY BANK ASHEVILLE NC
4. PINEHURST BANK SAINT PAUL MN
5. BANK OF FLORIDA - SOUTHWEST NAPLES FL
6. MICHIGAN COMMERCE BANK ANN ARBOR MI
7. CENTRAL PACIFIC BANK HONOLULU HI
8. SOUTHERN COMMERCE BANK TAMPA FL
9. SUN WEST BANK LAS VEGAS NV
10. SUNBANK, NATIONAL ASSOCIATION PHOENIX AZ
11. PENINSULA BANK ENGLEWOOD FL
12. CRESCENT BANK AND TRUST COMPANY JASPER GA
13. SHOREBANK CHICAGO IL
14. HIGH DESERT STATE BANK ALBUQUERQUE NM
15. PREMIER BANK JEFFERSON CITY MO
16. SUNRISE BANK OF ARIZONA PHOENIX AZ
17. METROBANK OF DADE COUNTY MIAMI FL
18. RAVENSWOOD BANK CHICAGO IL
19. FIRST SOUND BANK SEATTLE WA
20. BANK OF FLORIDA - TAMPA BAY TAMPA FL
21. WASHINGTON FIRST INTERNATIONAL BANK SEATTLE WA
22. BLUE RIDGE SAVINGS BANK, INC ASHEVILLE NC
23. MCINTOSH STATE BANK JACKSON GA
24. USA BANK PORTCHESTER NY
25. HAVEN TRUST BANK FLORIDA PONTE VEDRA BEACH FL

With over 7000 banks regulated by the FDIC, it would not take much for the Top 25 to shift significantly as new information comes out. Recently foreclosed up Pinehurst, previously 41st on the list, is now 4th.

Disclaimer:

The content of this web site is for general information purposes only and does not constitute advice. The author tries to provide content that is true and accurate as of the date of writing; however, we give no assurance or warranty regarding the accuracy, timeliness, or applicability of any of the contents. Visitors should not act upon content or information without first seeking appropriate professional advice.

The author accepts no responsibility for and excludes all liability in connection with browsing this Web site, use of information or downloading any materials from it, including but not limited to any liability for errors, inaccuracies, omissions, or misleading or defamatory statements. The information at this Web site might include opinions or views which, unless expressly stated otherwise, are not necessarily those of the author.

All content and information might be changed or updated without notice.

First predictions of default

I have been working on some research in the area of foreclosure predictions. The results have been quite strong and I'm now thinking about releasing some it on a limited basis. A more detailed list may be available upon request.

The following 25 banks are predicted to be most likely to fail based on end of 2009 data:

1. The Royal Palm Bank of Florida
2. ISN BANK
3. ALL AMERICAN BANK
4. SAEHAN BANK
5. FIRST SOUND BANK
6. HIGH DESERT STATE BANK
7. BAYTREE NATIONAL BANK & TRUST CO.
8. SUN WEST BANK
9. BANK OF FLORIDA - SOUTHWEST
10. SUNBANK, NATIONAL ASSOCIATION
11. CRESCENT BANK AND TRUST COMPANY
12. HAVEN TRUST BANK FLORIDA
13. STERLING SAVINGS BANK
14. NEVADA SECURITY BANK
15. BLUE RIDGE SAVINGS BANK, INC
16. NEXITY BANK
17. PROFESSIONAL BUSINESS BANK
18. VENTURA COUNTY BUSINESS BANK
19. BANK OF COMMERCE, THE
20. COMMUNITYSOUTH BANK AND TRUST
21. TOWN NORTH BANK, NATIONAL ASSOCIATION
22. COASTAL COMMUNITY BANK
23. PREMIER BANK
24. FIRST NATIONAL BANK OF OLATHE, THE
25. WESTBRIDGE BANK & TRUST COMPANY

The FDIC does not update their lists of foreclosed banks until Monday. Last Friday however, Pinehurst Bank, of Saint Paul, Mn. was foreclosed. Pinehurst is the 41st bank on the list and had a 35.3% chance according to the model.

Disclaimer:

The content of this web site is for general information purposes only and does not constitute advice. The author tries to provide content that is true and accurate as of the date of writing; however, we give no assurance or warranty regarding the accuracy, timeliness, or applicability of any of the contents. Visitors should not act upon content or information without first seeking appropriate professional advice.

The author accepts no responsibility for and excludes all liability in connection with browsing this Web site, use of information or downloading any materials from it, including but not limited to any liability for errors, inaccuracies, omissions, or misleading or defamatory statements. The information at this Web site might include opinions or views which, unless expressly stated otherwise, are not necessarily those of the author.

All content and information might be changed or updated without notice.