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Monday, March 26, 2012

Bank Failure Friday: FDIC Seizes 2 Banks, NCUA Seizes 2 Credit Unions



The FDIC closed 2 banks on Friday, March 23, 2012. Total bank failures for 2012 increased to 15. The NCUA seized 2 credit unions this week. Total credit union failures for 2012 increased to 5.

States where banks have been seized by the FDIC in 2012 (in alphabetical order): Florida 2, Georgia 4, Illinois 3, Indiana 1, Minnesota 2, Pennsylvania 1, Tennessee 2. Georgia and Florida accounted for 36 total or 39% of all bank failures in 2011.

States where credit unions have been seized by the NCUA in 2012 (in alphabetical order): California 1, Colorado 1, New York 1, Pennsylvania 1, Wisconsin 1.

Banks Closed This Week

#14 Covenant Bank & Trust, Rock Spring, GA
* Stearns Bank, NA, St. Cloud, MN assumes all of the deposits
* As of December 31, 2011, Covenant Bank & Trust had approximately $95.7 million in total assets
* FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $31.5 million

#15 Premier Bank, Wilmette, IL
* International Bank of Chicago, Chicago, IL assumes all of the deposits
* As of December 31, 2011, Premier Bank had approximately $268.7 million in total assets
* FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $64.1 million

USA Failed Banks by Year Bank failures skyrocketed in 2009 and 2010 to 140 and 157, respectively - a 2-year total of 297 compared to 32 from 2004 through 2008. Bank failures in 2011 continued at a high rate of 92. The 2012 annual bank failures are extrapolated from the weeks reported and failures year-to-date. The 2012 closings are currently estimated at 65.




FDIC Deposit Insurance Fund Cost of Failed Banks The total estimated cost to the FDIC Deposit Insurance Fund for the 2012 bank closures year-to-date is $1.14 billion. The most costly banks to the Deposit Insurance Fund (DIF) in 2012 year-to-date:
1 Tennessee Commerce Bank, Franklin, TN $416.8 million
2 The First State Bank, Stockbridge, GA $216.2 million
3 First Guaranty Bank & Trust Company of Jacksonville, Jacksonville, FL $82.0 million
4 BankEast, Knoxville, TN $75.6 million
5 Central Bank of Georgia, Ellaville, GA $67.5 million
6 Premier Bank, Wilmette, IL $64.1 million
7 Home Savings of America, Little Falls, MN $38.8 million
8 SCB Bank, Shelbyville, IN $33.9 million
9 Patriot Bank Minnesota, Forest Lake, MN $32.6 million
0 Covenant Bank & Trust, Rock Spring, GA $31.5 million



The next FDIC bank closings and NCUA credit union closings, if any, will most likely be announced on Friday, March 30, 2012. For a recap of 2011 bank failures, see Bank Failure Friday: 2011 Closings Final at 92 & Cost $7.18 Billion.




Failed Credit Unions

The latest NCUA actions were:

#4 Saguache County Credit Union of Moffat, CO
* NCUA liquidated and then sold on March 23, 2012 to Aventa Credit Union of Colorado Springs, CO

#5 Telesis Community Credit Union of Chatsworth, CA
* NCUA assumed control as conservator on March 23, 2012

The National Credit Union Association (NCUA) has seized 5 credit unions in 2012:
2 are in conservatorship and managed by the NCUA
* Telesis Community Credit Union of Chatsworth, CA
* A M Community Credit Union of Kenosha, WI
2 have been liquidated and sold
* Saguache County Credit Union of Moffat, CO
* People Community Development Credit Union of Philadelphia, PA
1 has been liquidated and merged
* Eastern New York Federal Credit Union of Napanoch, NY

Tuesday, March 20, 2012

Largest USA Banks Ratings: U.S. Bancorp Leads, Goldman Sachs Last




Largest USA Banks: Ratings and Rankings

U.S. Bancorp is the sole leader at A, followed by PNC Financial Services and Wells Fargo at A-. These 3 banks have moved positively beyond the 2008 financial crisis. Bank of New York Mellon is 4th at a respectable B+. Bank of America is next at #5, a surprise to some, with a ranking of C+. Despite the negative media hype, capital is strong. However, return on assets is inadequate. Bank of America financial performance has been extraordinarily volatile and could move the ranking up or down in the next QE March 2012.
JPMorgan Chase is sixth at D, despite CEO Jamie Dimon's trumpeting of the JPM "fortress balance sheet" of $2.27 trillion. However, financial position and performance are adequate. Next are Citigroup and Morgan Stanley at D-, just below the median score of D. Trailing the field at #9 is the once mighty Goldman Sachs at a dismal G+. Capital is inadequate. The Average Rating for the 9 largest USA banks is C-, just above the median score of D in the overall rating system.

Rating, Bank
A    U.S. Bancorp
A-   PNC Financial Services
A-   Wells Fargo
B+  Bank of New York Mellon
C+  Bank of America
D    JPMorgan Chase
D-   Citigroup
D-   Morgan Stanley
G+  Goldman Sachs
C-   Average

Largest USA Banks Rankings The Largest 9 USA banks ratings are presented below in a percentage format. The ratings range from A+ (100%) to G- (0%).



Based on fundamental analysis of both financial position and performance on a short-term and long-term basis, the largest 9 USA banks rankings have been updated with a composite score. The ratings are based on the December 31, 2011 financial statements. The score can range from a high of A+ to a low of G-, a total of 21 tiers. The median score is D in this rating system. Financial position strength, notably the capital ratio, is weighted more than recent financial performance. The rating therefore is primarily a gauge of financial position, balance sheet, strength, which indicates the ability of the bank to withstand financial shock or a downturn in financial performance. The rating is secondarily a gauge of financial performance, both short-term and long-term.

Saturday, March 3, 2012

Largest USA Banks Report Overall Poor Earnings QoQ and YoY

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Largest USA Banks Net Income QoQ The 9 Largest USA Banks reported an average +3.90% increase in quarterly net income QoQ for the QE 12-31-11, compared to the prior quarter QE 9-30-11. However, this is misleading. 6 of the 9 banks reported a decrease and the chart below indicates overall QoQ performance was poor. A significant portion of the average was attributable to Goldman Sachs at +357.76% QoQ, swinging from a quarterly net loss of -$393 million for QE 9-30-11 to a quarterly net income of +$1.01 billion for QE 12-31-11.
How the Largest Banks Performed QoQ:
Goldman Sachs +357.76%
U.S. Bancorp +6.05%
Wells Fargo +1.28%
JPMorgan Chase -12.53%
BNY Mellon -28.01%
PNC Financial Svcs -40.89%
Bank of America -68.05%
Citigroup -69.11%
Morgan Stanley -111.37%




Largest USA Banks Net Income YoY The 9 Largest USA Banks reported an average +2.96% increase in quarterly net income YoY for the QE 12-31-11, compared to the year-ago quarter QE 12-31-10. However, this is misleading. 6 of the 9 banks reported a decrease and the chart below indicates overall YoY performance was poor. A significant portion of the average was attributable to Bank of America at +260.05% YoY, swinging from a quarterly net loss of -$1.24 billion for QE 12-31-10 to a quarterly net income of +$1.99 billion for QE 12-31-11.
How the Largest Banks Performed YoY:
Bank of America +260.05%
U.S. Bancorp +38.60%
Wells Fargo +20.30%
Citigroup -11.00%
JP Morgan Chase -22.83%
BNY Mellon -31.12%
PNC Financial Svcs -39.88%
Goldman Sachs -57.56%
Morgan Stanley -129.90%




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