CYCLE PRO UPDATED: Current Commentary -- Where Are We Now?
Friday, October 3, 2008 PM
Another List of Possible Bank Failures; The following is a table of the top 130 US banks that are, in my opinion, most vulnerable to failure out of the 8600 banks for which I have performance data. The statistics used are current as of June 30, 2008.
The column headings have the following definitions: E/A Equity / Assets
IM Interest Margin
NPA/A Non-Performing Assets / Assets
NPA/ELR Non-Performing Assets / Equity Loss Reserves
ROE Return on Equity
RBCR Risk-Based Capital Ratio
TC/TA Tangible Capital / Tangible Assets
Assets Total bank assets
Rank Overall Rank
The table includes banks of all sizes whose performance data is the worst of each of the seven categories. To develop this list I found the top 75 worst banks of each category, ranked them, and then grouped them by a calculation that grouped these rankings across all seven categories from most worst to least worst. The ranking gives a higher value to banks that hit multiple categories and a lower value for those that only hit one or two categories. For example, the #1 worst bank in my list is Ameribank and #4 is Integrity Bank, both of which have already been seized by FDIC.
I have no idea which of these banks will actually be seized. And it is quite possible there will be FDIC seizures for banks not on this list. For example, on a scale of 1 to 5 (1 being best to 5 being worst) IndyMac was ranked a 3 just before they were seized. FDIC maintains a watchlist of the 117 most vulnerable banks for which I'd like to think I have most of them in my list here. But in the environment were now find ourselves, I believe this list of bank are more likely than not to be seized. Before all the dust settles over the next 6-12 months, many of these banks are likely to go under.
US Banks - Highest Likelihood of Failure Institution Name E/A IM NPA/A NPA/ELR ROE RBCR TC/TA Assets Rank
Ameribank, Northfork, WV
* Seized by FDIC 9/19/08 4 2 3 5 4 3 104M 1
First Priority Bank, Bradenton, FL
* Seized by FDIC 8/1/08 1 23 2 6 1 1 258.6M 2
Main Street Bank, Northville, MI 3 12 3 5 5 112.4M 3
Integrity Bank, Alpharetta, GA
* Seized by FDIC 8/29/08 6 3 4 1 16 13 9 1.1B 4
Fulton Financial Advisors, NA, Lancaster, PA 2 1 46.5M 5
Nebraska Rural Comm, Morrill, NE 1 1.4M 6
Wellington Trust Co NA, Boston, MA 1 87.2M 7
Security Bank Of Gwinnett County, Suwanee, GA 8 6 5 7 369.2M 8
BBM, Birmingham, AL 1 5 1.3M 9
Ebank, Atlanta, GA 7 4 26 11 18 137.8M 10
Eastern Savings Bank, FSB, Hunt Valley, MD 1 6 1.1B 11
American Sterling Bank, Sugar Creek, MO 5 29 2 8 258.1M 12
Port Trust, Charleston, SC 2 <1M 13
Imperial Savings & Loan Assn, Martinsville, VA 2 72 24 15 3 2 9.3M 14
Fremont Investment & Loan, Anaheim, CA 11 6 56 26 14 22 23 5.7B 15
Strategic Capital Bank, Champaign, IL 13 15 7 675.8M 16
Citizens Comm Bank, Ridgewood, NJ 9 19 10 19 46.4M 17
Alpha Bank & Trust, Alpharetta, GA 13 14 12 383.2M 18
Magnet Bank, Salt Lake City, UT 5 7 24 30 344.8M 19
Mayes County, Pryor, OK 3 21M 20
First Natl Bank Of Nevada, Reno, NV
* Seized by FDIC 7/25/08 31 31 2 9 3.4B 21
First Georgia Comm Bank, Jackson, GA 11 17 18 263.6M 22
Morton Savings Bank, Morton, PA 10 42 27 27 21 18.3M 23
Bankfirst, Sioux Falls, SD 3 10 346.3M 24
Platinum Comm Bank, Rolling Meadows, IL 18 8 26 32 80.2M 25
Security Pacific Bank, Los Angeles, CA 21 28 4 587.7M 26
Freedom Bank, Bradenton, FL 23 12 6 45 284.1M 27
PFF Bank & Trust, Pomona, CA 46 25 9 35 31 4.1B 28
Rivergreen Bank, Kennebunk, ME 17 7 31 97.9M 29
Ocala Natl Bank, Ocala, FL 24 11 31 28 258.3M 30
Bethany Baptist, Farmingdale, NJ 3 13 <1M 31
Bright Hope, Philadelphia, PA 7 9 <1M 32
First Century Bank, NA, Gainesville, GA 14 19 27 45.9M 33
Mellon Bank, NA, Pittsburgh, PA 4 39.5B 34
Sterlent, Pleasanton, CA 4 88.9M 35
Wells Fargo Bank, Ltd., Los Angeles, CA 4 305.2M 36
Alliance Banking Co, Winchester, KY 24 20 14 46 55.4M 37
First St Bank, Danville, VA 16 19 30 27.3M 38
Comm Bank, The, Loganville, GA 8 10 628.1M 39
Ameriprise Bank, FSB, New York, NY 8 11 1.5B 40
Bishop De Mazenod, Houston, TX 2 17 <1M 41
Lewiston Catholic, Lewiston, ID 4 15 <1M 42
Allst Bank, Vernon Hills, IL 15 30 28 923.3M 43
Fifth Street Baptist Church, Richmond, VA 5 <1M 44
High Desert, Apple Valley, CA 13 7 157.6M 45
Putnam Fiduciary Trust Co, Boston, MA 5 378.1M 46
Silver St Bank, Henderson, NV
* Seized by FDIC 9/5/08 34 33 18 35 2B 47
St Bank Of Lebo, The, Lebo, KS 28 15 32 25.5M 48
Depository Trust Co, The, New York, NY 30 10 37 50 3.6B 49
C M A, Bham, AL 12 10 4.5M 50
Newton County Loan & Savings, FSB, Goodland, IN 10 34 41 7.3M 51
Ing Bank, FSB, Wilmington, DE 12 58 17 79.5B 52
Home Town Bank Of Villa Rica, Villa Rica, GA 7 17 224.5M 53
Wells Fargo Bank, NA, Sioux Falls, SD 6 503.3B 54
First Security Natl Bank, Norcross, GA 9 16 147M 55
Omni Natl Bank, Atlanta, GA 52 35 32 36 1B 56
Circolo Campobello Di Licata, Amherst, NY 14 12 <1M 57
Vineyard Bank, NA, Rancho Cucamonga, CA 39 40 38 41 2.3B 58
First Frontier, Lynbrook, NY 6 21 <1M 59
Downey S & La, F.A., Newport Beach, CA 33 35 34 12.6B 60
American St Bank, Tulsa, OK 68 70 59 43 64 70 11.1M 61
Franklin Bank, S.S.B., Houston, TX 46 43 37 42 5.6B 62
Westsound Bank, Bremerton, WA 7 428.5M 63
Alliance Bank, Culver City, CA 50 36 51 32 1.1B 64
Firstcity Bank, Stockbridge, GA 16 13 255.4M 65
West Hartford, Farmington, CT 8 22 3.8M 66
Citizens Natl Bank, Macomb, IL 21 10 461M 67
Mutual Bank, Harvey, IL 44 39 34 1.7B 68
Farmers Bank, Lincoln, NE 63 68 58 61 63 19.5M 69
Pacific Western Bank, San Diego, CA 8 4.3B 70
St. Helena Parish, Chicago, IL 10 23 <1M 71
Metlife Bank, NA, Bridgewater, NJ 39 52 36 7.7B 72
Home Fed Savings Bank, Detroit, MI 48 66 36 54 16.5M 73
St. Gertrude'S, Mora, NM 26 8 1.7M 74
St. Margaret, St. Louis, MO 15 20 <1M 75
Bestwall Brunswick, Brunswick, GA 9 <1M 76
Redwood Bank, Watertown, NY 9 18.3M 77
Security Bank Of North Fulton, Alpharetta, GA 9 182.5M 78
Universal Savings Bank Fa, Milwaukee, WI 75 20 40 4.3M 79
Westernbank Puerto Rico, Mayaguez, PR 50 35 54 17.1B 80
Los Padres Bank, Solvang, CA 41 49 51 1.2B 81
First United, San Jose, CA 32 6 17.8M 82
Texico St Bank, Texico, IL 70 48 38 72 9.4M 83
Centennial Bank, Ogden, UT 12 27 212.3M 84
Jennings St Bank, Spring Grove, MN 19 20 47.9M 85
Security Savings Bank, Henderson, NV 18 21 254.5M 86
Corus Bank, NA, Chicago, IL 62 40 45 9B 87
Almena St Bank, Almena, KS 58 33 58 16.2M 88
Alliant Bank, Sedgwick, KS 45 50 55 16.7M 89
Comm Trust Bank, Hiram, GA 13 27 279.4M 90
County Bank, Merced, CA 58 49 43 2.1B 91
Southern Comm Bank, Fayetteville, GA 22 18 378.1M 92
Bank Of Parsons, Parsons, KS 44 55 53 11.8M 93
Guaranty Bank, Austin, TX 27 15 15.9B 94
Real Financial, Edina, MN 31 11 28.3M 95
Farmers St Bank, Fairmont, NE 38 48 74 7.3M 96
Mesilla Valley Bank, Las Cruces, NM 36 60 64 17.3M 97
Bankunited, FSB, Coral Gables, FL 57 46 58 14.2B 98
Alliance Of Poles, Cleveland, OH 18 25 <1M 99
Bear Stearns Bank & Trust, Princeton, NJ 11 879.9M 100
First Bank, Roxton, Texas, The, Roxton, TX 59 72 74 59 19.9M 101
First Private Bank & Trust, Encino, CA 11 638.8M 102
Mt Zion Woodlawn, Cincinnati, OH 11 <1M 103
Nova Savings Bank, Berwyn, PA 29 16 520.1M 104
Mcclave St Bank, Mcclave, CO 75 73 57 67 19M 105
Meridian Bank, Eldred, IL 8 38 44.2M 106
Riverside Bank of Gulf Coast, Cape Coral, FL 25 21 620.5M 107
Filley Bank, Filley, NE 56 62 56 15.1M 108
Freeport St Bank, Harper, KS 57 60 57 16.2M 109
First St Bank Of Altus, Altus, OK 31 16 124.5M 110
Delaware Sterling Bank & Trust, Christiana, DE 12 32.3M 111
Neighborhood Comm Bank, Newnan, GA 26 22 240.1M 112
Old West, John Day, OR 29 19 90.6M 113
Heritage Comm Bank, Glenwood, IL 25 24 263M 114
First-Knox Natl Bank, Mount Vernon, OH 21 29 818.8M 115
Bank Of Wyandotte, The, Wyandotte, OK 67 58 69 12.7M 116
Colorado FSB, Greenwood Village, CO 13 99M 117
Pnc Bank, NA, Pittsburgh, PA 13 128.3B 118
Citizens St Bank, Carleton, NE 62 73 62 12.1M 119
Anchor St Bank, Anchor, IL 71 54 73 13.7M 120
Oglesby St Bank, Oglesby, TX 69 59 71 12.1M 121
Bank Of New York, The, New York, NY 34 20 130.1B 122
Milford B & La, Milford, IL 66 72 68 18.8M 123
Central Progressive Bank, Lacombe, LA 14 480.9M 124
Rocky Mountain Bank & Trust, Florence, CO 19 37 212.2M 125
Sc Firefighters, Columbia, SC 14 3.7M 126
University Bank, Ann Arbor, MI 14 113M 127
Kaiser-Lakeside, Oakland, CA 33 24 28.5M 128
Valley Wide, Vernal, UT 28 29 <1M 129
Oakdale St Bank, Oakdale, IL 72 75 74 16.7M 130
Possibility of Martial Law At least one Congressman admitted that he was told that not passing the bailout bill could result in the declaration of martial law. I concur that this was a very real possiblity. If the bill had not passed, the stock market would likely have dumped hard, similar to what happened last Monday. While there are many that suggest the PPT would step in and support stocks to keep them from falling, I disagree. It depends upon what the Presidents Working Group on Financial Markets wants to accomplish. Last Monday was an example where it was clear there was nothing supporting the market. In fact, I believe the selloff was stronger to the downside because short selling was not allowed on the 800+ financial stocks. When a short-seller needs to exit their position, they must buy it back and that creates support. Without shorts being there to buy back their own positions, there was a shortage of buyers and that causes stocks to drop much faster than normal. You have witnessed first hand what happens when the stock market becomes less liquid because of poorly conceived government regulations -- an aftereffect of the law of unintended consequences. Public opinion of the bailout quickly shifted from opposition to acceptance following Mondays min-crash -- it is amazing how quickly Americans can be herded like sheep when their pocketbook is immediately threatened. A stock panic today of similar magnitude would certainly have helped set the stage for a martial situation.
If it was going to happen, this weekend was the very best opportunity. Because the bailout bill passed the House, I do not think the likelihood has disappeared, rather I think it has simply stepped aside awaiting the next opportunity. Here are the points that I have identified as necessary before martial law is likely (and this of course is my worst nightmare):
Bush signed an executive order in Spring, 2007 authorizing the sitting President to suspend Constitutional government indefinitely in the event of a catestrophic emergency (the definition of emergency is up to the President to decide).
I interpret the executive order that in such an emergency Bush will have the power to temporarily "nationalize" corporations deemd to have strategic national importance, such as banks, oil, airlines, food distribution, etc.
US Elections could be suspended indefinitely (again, timing is everything so a move sooner is more likely than waiting as few weeks)
A few months ago Bush reassigned the US Army 1st Batallion from Iraq to US to train for "domestic operations" and to be on-call beginning 10/1/08 to quell riots and public unrest.
US Treasury has the authority to do just about everything in Paulsons original bailout proposal... in the event of an emergency. Anything not specifically authorized may be granted to the Treasury by the President. This includes confiscation of gold, silver, and any other commodity deemed necessary in support of the US financial and banking system.
The strategy of FDIC announcing bank seizures on Friday nights, sets up a perfect backdrop and maximum drama for Bush to declare such an emergency this weekend. I would expect the next FDIC announcement to be many banks at one time.
Quite possible he might declare a "bank holiday" and keep banks closed for several days.
Failure for Congress (damned if they did and damned if they didn't) to pass the bailout bill allows Bush to hold Congress up as the scapegoat to blame for the crisis and therefore justifying his need to declare an immediate emergency.
If Bush wants to leave office with maximum impact, this is a golden opportunity for him to make his move.
This is a nightmare scenario that I truely hope does not come to pass. I think the pressure is off for the time being because the House did pass the bailout bill. President Bush has already signed it. The new bill has gone from Henry Paulson's initial 3 page document to 450 pages, full of add-on's and pork. A declaration of martial law by Bush may not happen this weekend, but the possibility still exists and if it happens is most likely before November's election. Stay tuned.
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