Community Bank Consulting, Newsletters and Research
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May 8, 2012 |
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1 Bank Closure and 0 New Enforcement Actions
Bank Closure Update
- Security Bank, NA (North Lauderdale, Florida), a $101.0 million asset bank, was closed and Banesco USA (Coral Gables, Florida) executed its first failed bank acquisition. Information about Banesco was found on the company's website: "Since opening more than six years ago, Banesco USA has been gradually growing in Greater Miami. The bank's three principal owners — Juan Carlos Escotet, Xavier Lujan and Ricardo Ayala — are key people at Banesco Banco Universal, Venezuela's largest bank. Banesco USA is a separate company from the Caracas-based bank. It is a privately-owned, state-chartered bank that opened in January 2006." As of December 31, 2011 Banesco had total assets of $490.4 million with one office in Puerto Rico and two offices in Florida.
The March 31, 2012 Community Bank Stock Price Volatility Survey is now available on our affiliated website.
This issue represents our eighteenth consecutive quarterly Survey of U.S. community banks - a trusted source for bank CFO's and CPA's since 2007.
Volatility Informatics provides:
- Stock Price Volatility Assumptions for Equity Grant Fair Value calculations using Black Scholes Models.
- Independent objective information to maintain CPA / Client Audit Independence.
- Custom studies and Fair Value consultations.
iBank Monitor Critical List
The iBank Monitor Critical List identifies the most troubled U.S. banks using a proprietary financial screening process. Our methodology examines the most recent quarter-end financial information including capital ratios, non performing assets, intangible assets, and net earnings after considering gains/losses from sales of assets as well as loan loss provisions.
Excluding quarter to date bank failures, the Critical List contains 128 Banks with aggregate total assets of $35.0 billion.
Our Critical List continues to be a very reliable predictor of eventual failure, having detected all but a few bank failures since 2008.
Premium subscribers, please click here to access detailed Critical Lists and custom search features.
(Click on Map for State List Summary)
2012 Bank Closure Forecast
Here is our assessment of the 2012 bank closure environment:
- By slowing down the bank closure rate, the FDIC is obviously managing Receivership Funding and Operating Losses as the FDIC has boasted in a recent press release: "Assessment revenue and fewer expected bank failures continued to drive growth in the fund balance."
- Regulators appear to be intentionally delaying closures, depleting bank capital and using bank earnings to position bank balance sheets for receivership/sale. They are essentially buying time, managing pre-failure, wiping out shareholders' equity and using bank earnings to their benefit.
- Regulators are operating "pre-closure receiverships" without actually closing the banks, they are essentially under tight regulatory control with very poor asset quality ratios and severely depleted capital.
- Regulators appear to be uncharacteristically patient with troubled banks, as long as there is not a "Liquidity Event" or an anxious buyer ready to do a deal.
- FDIC DIF losses per bank are declining due to the smaller asset size of troubled banks. Smaller asset size banks are clearly becoming the bigger problem.
- From the 2012 FDIC Operating Budget, it would appear that the FDIC plans to close about 80 banks in 2012, but our iBank Monitor analysis (click here) calculates a contingent loss reserve to close approximately 130 banks.
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Regulatory Enforcement Actions
While the FDIC, Office of the Comptroller of the Currency (OCC) and the Federal Reserve Bank (FRB) each have separate enforcement action search pages, which are sporadically updated, they can be cumbersome to review.
Historically, the FRB and the Office of Thrift Supervision (OTS) held the best track record in publishing thier enforcement actions in a timely manner, however, on July 21, 2011 the OTS was absorbed by the OCC. Unfortunately, the OCC and the FDIC have the worst track records for timely enforcement action annoucements which will result in less transparency for banks formerly regulated by the OTS.
Georgia has retained its ranking as the state with the most bank failures since 2008, and also the most failed banks without any previous Public Regulatory Enforcement Actions (EA).
Georgia's non-EA failed bank count represents over 50% of the nation's 38 banks which have failed without any prior regulatory notice. This is an interesting pattern suggesting intentional suppression of public notice for a number of severely troubled banks. Further, it is ironic that of the nation's banks which failed without public EA's since 2008, 94% have been regulated by the FDIC which is often assumed to be the primary consumer watchdog. (Click here for a complete list of bank failures without EA's.)
While bank failures over the last few years have eventually reduced the number of troubled banks without public EA's, there are eight banks on our Critical List and forty three banks on our Watch List lacking any public EA. (Premium subscribers can access these lists via our Critical and Watch List pages.)
Premium subscribers, please click here to access detailed Regulatory Enforcement Action Lists including custom search features as well as a concise list of all outstanding Prompt and Correction Actions.
Troubled Bank Metrics
iBank Monitor Watch List
Our proprietary Watch list is based on analysis of the most current financial information and public regulatory enforcement actions.
Premium subscribers, please click here to access detailed Watch Lists and custom search features.
(Click on Map for State List Summary)
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For more Updates:
Aware of noteworthy community bank announcements in your area pertaining to mergers, acquisitions or capital raises?
Send us the news link at news@ibankmonitor.com.
Useful Links
FDIC Material Loss Reviews prepared by the Office of Inspector General analyzing each failed bank and its regulatory supervision.
* Accredited members of the press working for established media organizations are eligible to receive complimentary access to our Premium content. Additionally, we are pleased to assist with the preparation of custom studies and reports. For media inquiries, please contact Peter Minford.
