Failed Banks 2011

One of the more popular topics at BobandScott.com is any post that discusses failed banks.  The FDIC has a fairly orderly process for bringing in banks that are failing for one reason or another. Typical failures are due to reserve requirements not being met.

During this latest budget crunch, we heard that the government site data.gov might be shut down. We jumped over to take a look and noticed that there is a nice dataset for the failed banks since October, 2000.   The data includes the failed bank along with the acquiring bank, and date of closure.

Failed bank list. Update February 12, 2012
failed-bank-list-2012

Click on the image to download the 2011 failed bank list (CSV format)

2011 Failed Bank List (updated 04/14/2011)

Bank Name,City,State,CERT #,Acquiring Institution,Closing Date,Updated Date

[csv id=1]

Housing crisis continues in new ways

This mortgage mess will certainly be with us for many more years.  Not only do we have to contend with banks that still don’t want to lend, but there are many banks that are cleaning up the mess in questionable ways.  It seems that there are a lot of dishonest folks in the mortgage game and when you give them an incentive that is directly tied to their pay they tend to find a way to fudge something for their own gain.  I think that the whole idea that, in the end, someone else pays (taxpayers via Fannie and Freddie), makes it feel like a “I won’t have to deal with it when it goes bad”.

Good old accountability needs to come back into the game.  If a bad mortgage is written, someone gets in trouble or loses their job.

The cover it up, dress it up, and get rid of it mentality has to stop.

Two big mortgage lenders are reviewing foreclosures as public officials heighten pressure on the industry over allegations that they made errors in documents used to evict homeowners. GMAC Mortgage, a unit of Ally Financial Inc., said Tuesday that it has enlisted legal and accounting firms to conduct independent reviews of its foreclosure procedures in all 50 states.

GMAC has already halted foreclosures in 23 states.Separately, Wells Fargo & Co. said it would review pending foreclosures for potential defects in response to requests from lawmakers and public officials. The San Francisco-based company says it has not turned up any evidence of problems.

via GMAC, Wells Fargo to review foreclosures – Yahoo! Finance.

Shocking!  Not really, just sad.

U.S. banks that spent more money on lobbying were more likely to get government bailout money, according to a study released on Monday.

via Banks with political ties got bailouts, study shows | Reuters.

How good are things out there?

It generally isn’t a good thing when you accept the offer, of whoever is holding your note, to skip a payment for a month.  This is a very common tactic for credit card companies and even came into the mortgage market a bit near the peak.  Interest still accrues.

There are many who will not have a problem with ‘catching up’ the next month, but it came with a cost.  There are also those who are in serious trouble and using this as a last ditch prior to bigger problems.

There are some big names on the list.  AIG… big surprise (of course not).  Citizens… I though that they were doing OK.  Perhaps not.

It is generally never a good idea to put something off like this.

Yow! Number of Banks Not Making TARP Payments Skyrockets!.

Well, failed bank friday saw 6 more closings.  This one hit close to home.  I live about 5-10 miles from Waterford Village bank which becomes the first bank to close in NY State since 2004.

Waterford was about a year old and got off to a rough start.  The founder appeared to go a little spend happy at a time when the banking business was facing tough times.  They built a beautiful branch and took on a lot of payroll for single location.  The founder was removed a number of months back for an unamed violation.   This one was not unexpected as a deal to buyout the bank hit some snags.  The bank will be taken over by another local player, Evans National Bank.  Evans is a well run bank that should add a lot to the former home of Waterford.

Waterford Village Bank

July 25 (Bloomberg) – Security Bank Corp.’s six Georgia subsidiaries and Waterford Village Bank in New York were seized by regulators, pushing this year’s toll of failed U.S. lenders to 64, the most since 1992.

Reference: Lender Failures Reach 64 for the Year

Well, it is Friday, which of course means that banks get brought in, closed, shut down, etc…. by the FDIC.

The banks were: First Piedmont Bank, based in Winder, Ga.; BankFirst, based in Sioux Falls, S.D.; Temecula Valley Bank of Temecula, Calif.; and Vineyard Bank of Rancho Cucamonga, Calif.

Friday’s actions bring the total number of closings for 2009 to 57.

Four more banks bite the dust

Failed Bank Friday

via Another four banks bite the dust – Jul. 17, 2009 .

Goldman Sachs has been at the center of every bubble in the economy. They are the smartest players at the table who know enough about where to spend their money to curry favor and to be sure that related parties have positions that most benefit Goldman Sachs.  Smart, cunning, ruthless?

http://www.rollingstone.com/politics/story/28816321/the_great_american_bubble_machine

Matt Taibbi video discussing his article on Goldman Sachs

Everyone should plan for the banking landscape to chane.  Banks will consolidate.  We have mentioned this a number of times in prior articles and on “The Bob and Scott Show” podcast.  Assuming our economy has turned… (big assumption)

1. Banks will focus on being banks, others will not
2. Ratios will come in line and traditional lending will be the core of the bank
3. Healthy banks will look to buy growth from other entities where they can continue down the traditional path

The key here is to identify the players on the buy side and sell side.  Until the sell side companies get the toxic assets and divisions off of their books they won’t be candidates, once they do the picture will be bright.

Consider some of the following names

• FNFG
• BKK
• IBOC
• FISI
• STT
• FMER
• MTB

Breaking down the bank stress tests results.

At long last, the Federal Reserve released the results of its bank stress tests. After a series of leaks, the report contained few surprises, with 10 out of 19 banks ordered to raise a combined total of $74.6B and projected total losses under an adverse testing scenario coming in at around $600B. Officials hope the private sector will step up to help banks close capital gaps. Optimists viewed the findings as a sign that the worst of the banking crisis is over, but questions remain about the tests’ rigor, especially considering the Fed scaled back some loss projections after being pressured by banks. Analysts also wonder about the health of the rest of the roughly 8,000 banks in the country and the possibility of writedowns at small-cap banks.

Here’s the breakdown of capital shortfall, or lack thereof:

• American Express (AXP): $0 (+2.8% after hours)
• Bank of America (BAC): $33.9B (+9.0% AH)
• BB&T (BBT): $0 (+4.7% AH)
• Bank of New York Mellon (BK): $0 (+4.4% AH)
• Capital One (COF): $0 (+3.4% AH)
• Citigroup (C): $5.5B (+6.8% AH)
• Fifth Third Bancorp (FITB): $1.1B (+21.8% AH)
• GMAC: $11.5B
• Goldman Sachs (GS): $0 (+2.1% AH)
• JPMorgan (JPM): $0 (+1.8% AH)
• KeyCorp (KEY): $1.8B (+9.1% AH)
• MetLife (MET): $0 (+3.0% AH)
• Morgan Stanley (MS): $1.8B (-0.5% AH)
• PNC Financial (PNC): $0.6B (+3.4% AH)
• Regions Financial (RF): $2.5B (+8.4% AH)
• State Street (STT): $0 (+8.6% AH)
• SunTrust Banks (STI): $2.2B (+2.9% AH)
• U.S. Bancorp (USB): $0 (+7.2% AH)
• Wells Fargo (WFC): $13.7B (-2.4% AH)

via Wall Street Breakfast — Seeking Alpha.

Regional banks could be the greatest long term play that has been seen in more than 15 years. At the end of the S&L crisis, when the RTC stepped in, strong regional players jumped in to buy assets on the cheap. FDIC assisted takeovers are tantamount to discounted employee stock ownership plans.  You get a known asset at a discounted price.

Names to consider FNFG, FMER, IBOC.

Other banks to consider are BK and STT.