Troubled / Untroubled Banks

[TJ_98370]

.
This should be no surprise to anybody who is following the health of local banks.



EVERETT, Wash. -- Officials of Everett-based Frontier Financial Corp. say the bank holding company will merge with a New York company.
.
Frontier announced the merger with SP Acquisition Holdings on Friday. It says the $24 million stock deal will provide more than $400 million in assets to help rejuvenate the bank's portfolio.
.
Frontier was hurt when the real estate market tanked last year. It has 48 offices in Western Washington and three in Oregon, and employs about 700 people.
.
The merger must be approved by shareholders of both companies.
.

[TJ_98370]

.

.
-------------.
.

.
Colonial BancGroup Inc., which is based in Montgomery, Ala., was seized by bank regulators Friday and has been taken over by BB&T Corp of North Carolina.
.
It is the sixth-largest bank to fail in the nation's history and the largest of 74 U.S. banks to fail this year. Colonial has 23 Texas bank offices, 20 of which are in Dallas-Fort Worth......
.
......The failure will cost the federal insurance fund $2.8 billion, according to the FDIC. Colonial's $20 billion in deposits have been transferred to BB&T.....
.
----------------
.

.
Banks in the U.S. that failed in the past two years were in far worse shape than those that collapsed during the industry's last crisis, a looming problem for the government agency charged with insuring deposits.
.
At three of the five banks that failed Friday, increasing the total to 77 so far this year, the financial hit to the agency's deposit-insurance fund is expected by the Federal Deposit Insurance Corp. to be about 50% of their assets......
.
Not to worry. Congress will replenish as required. What is mildly disturbing is that Colonial Bank had a "Texas Ratio" of 26 last December, which is supposed to indicate a healthy bank.
.
.

.

[TJ_98370]

.
Foreign companies / banks are now buying our failed banks. Is this really a good thing?
.

.
BANKING regulators in the United States have sold the Guaranty Bank in Texas after it crashed and became the country's second biggest institutional failure this year.
.
The sale of the Austin-based lender to a major Spanish bank cost the US government billions in loan guarantees.
.
The transaction approved by the Federal Deposit Insurance Corporation marked the first time a foreign bank has bought a failed US bank.
.
The bank failure, the 10th largest in US history, is expected to cost the deposit insurance fund an estimated $3 billion.
.
The FDIC sold Austin-based Guaranty Bank, with about $13 billion in assets and $12billion in deposits to BBVA Compass, the US division of Banco Bilbao Vizcaya Argentaria, Spain's second-largest bank.......

============================


.
The sale of the operations of failed Guaranty Bank in Texas on Friday to the U.S. division of a Spanish bank signals that foreign banks can succeed in the auctions for collapsed U.S. lenders.
.
Banco Bilbao Vizcaya Argentaria SA on Friday became the first foreign company to buy a failed U.S. bank in this crisis; on Friday, federal regulators shut down Guaranty.
.
Other foreign banks with a U.S. presence interested in gobbling up failing U.S. banks include French bank BNP Paribas SA through its San Francisco subsidiary, Bank of the West; Toronto-Dominion Bank, through its Portland, Maine, subsidiary, TD Bank; and Rabobank, the El Centro, Calif., subsidiary of Rabobank Group of Utrecht, Netherlands.
.
Any additional capital to help cushion the blow to the Federal Deposit Insurance Corp. and the financial system from bank failures would be welcome. So far, 106 banks have failed in the two years since the financial crisis erupted, 81 this year and 25 in 2008. The failures are depleting the FDIC's insurance fund...............
.

[TJ_98370]

.

.
According to a report from the Federal Deposit Insurance Corporation, Washington banks have twice the percentage of non-performing loans as the national average.
.
The Vancouver Columbian reports that Thursday's FDIC report listed a 9.2 percent ratio of non-performing loans for Washington's 81 banks. That compares with a 4.4 rate nationally in the second quarter.
.
The FDIC-insured banks in Washington reported a combined quarterly loss of $522 million, compared with a $74 million profit a year ago.
.

[TJ_98370]

.
Fifteen additional bank failures during the month of August
.

.

.

[TJ_98370]

.
This is old news to some. I'm just attempting to maintain some consistency with this thread.
.
Venture is the third Washington State based bank to fail this year - Bank of Clark County on 16 Jan, Westsound Bank on 8 May, Venture Bank on 11 Sept.
.

.
Regulators seized DuPont-based Venture Bank on Friday night and turned its assets over to Raleigh, N.C.-based First Citizens Bank and Trust Co. – ending a 30-year history as a South Sound community bank.
.
The Washington State Department of Financial Institutions closed Venture Bank at 6 p.m. and immediately named the Federal Deposit Insurance Corp. as receiver. The bank was then sold to First Citizens, which has assumed all deposits and assets – except for some brokered deposits – of Venture Bank.......
.
.......Venture was the 92nd bank to fail this year, according to FDIC data......
.

Seattle Bubble news post -
.

[TJ_98370]

.
Wow! The FDIC is running out of funds. Who would have expected that?
.

.
Regulators may borrow billions from big banks to shore up the dwindling fund that insures regular deposit accounts.............
.
.........Regulators also are considering levying a special emergency fee on all banks, charging regular fees early or tapping a $100 billion credit line with the U.S. Treasury, the people (industry and government officials) said.
.
The fund, which insures deposit accounts up to $250,000, is at its lowest point since 1992, at the height of the savings-and-loan crisis. Ongoing losses on commercial real estate and other loans continue to cause multiple bank failures each week.
.
FDIC Chairman Sheila Bair wants to avoid tapping the Treasury credit line, and Treasury officials insist that the strongest big banks have enough extra capital to operate, the people said. Comptroller of the Currency John Dugan, who is a voting member of the FDIC board, has said he doesn't want to levy another fee on banks while the industry is still recovering..........
.
......The FDIC estimates bank failures will cost the fund around $70 billion through 2013. Ninety-four banks have failed so far this year. Hundreds more are expected to fall in coming years largely because of souring loans for commercial real estate.
.
The FDIC's fund has slipped to 0.22 percent of insured deposits, below a congressionally mandated minimum of 1.15 percent. The $10.4 billion in the fund at the end of June is down from $13 billion at the end of March, and $45.2 billion in the second quarter of 2008........
.

[TJ_98370]

.
I believe Jillayne posted a link to Calculated Risk's list of problem banks awhile ago. I am posting that link again. Lots of info here. Anchor Mutual Savings Bank of Washington State made mention as being one of the larger banks recently making the problem bank list. Last December it had a "Texas Ratio" of 53, which qualified it as being vulnerable back then.
.

.

The following link will take you to a sortable spreadsheet where you can view the 15 Washington State banks that are in trouble at this time. Several familiar names are listed. Note that this list excludes banks that have failed already.
.

.

[TJ_98370]

.
Article from Calculated Risk linked below –
.
Coastal Community Bank of Everett was recently added to the list. It appears that commercial real estate loans are what is causing trouble for this bank.
.

.
Spreadsheet linked below:
.

.

[TJ_98370]

.
Calculated Risk added Cascade Bank of Everett as a problem bank as of 20 Oct and Sterling Savings Bank of Spokane as of 15 Oct
.

.

[TJ_98370]

.
From Calculated Risk;
.

.
There are 23 Washington State based "problem" banks on the list now. The latest additions were: Washington First International Bank of Seattle, Evergreen Bank of Seattle, Regal Financial Bank of Seattle, and Business Bank of Burlington.
.
Assuming my data sources are correct, as of 31 Oct 09, 3% of Washington State based banks have failed since the beginning of 2008, and 24% of the remaining Washington State based banks are considered "problem" banks.
.

[TJ_98370]

.
Ms. Gregoire in action ..............
.

.
Politicians are putting pressure on regulators to ease up on small community banks across the U.S., a move some say could increase the cost of cleaning up the financial crisis.
.
Last week, House Financial Services Committee Chairman Barney Frank (D., Mass.) sent a letter to the country's top bank regulators, including Federal Reserve Chairman Ben Bernanke and Federal Deposit Insurance Corp. Chairman Sheila Bair, urging them to "show some temperance in their regulation of traditional banks." One common complaint from lawmakers is that regulators' tough examinations are making banks reluctant to lend......
.
.......Washington Gov. Christine Gregoire sent a letter to her congressional delegation Oct. 9 complaining that "federal regulators have applied inflexible "one size fits all" regulatory standards on community banks and potential investors that hinder the ability of these community banks to weather the financial storm and actually inhibit opportunities to raise critically needed capital at the local level." Her letter came just days after the Federal Reserve declined to approve the sale of Frontier Financial, the fifth-largest bank in her state, to a New York investment fund for $450 million. Frontier Financial Chief Executive Patrick Fahey declined to comment.
.
Scott Jarvis, director of Washington's Department of Financial Institutions, said the letter didn't say "you have to have a systemic opening of floodgates." Rather, he said, the state wanted to see "a little fine tuning to deal with reality.".......
.

[jillayne]

I saw both the CR blog post and the WSJ article, too. This can only mean one thing: Bank Failure Friday will soon make an appearance in Wa State!

[TJ_98370]

.
Washington State is number one!!! Calculated Risk article posted 6 Nov 09 linked / quoted below..........
.

.
....Washington State leads the way with more than 26 percent of its banking industry either under formal enforcement action or having failed. No wonder the esteemed governor wrote a letter to the state's congressional delegation complaining about bank regulators....
.
There were five more bank failures last Friday, none in Washington.
.

.

.

[BillE]