by Calculated Risk on 10/02/2010 01:27:00 PM

Note: this is an unofficial list of Problem Banks compiled only from public sources.

Here is the unofficial problem bank list for Oct 1, 2010.

Changes and comments from surferdude808:

The number of institutions on the Unofficial Problem Bank List rose this week but assets fell with the removal of a large publicly traded bank.

Removals include the failed Shoreline Bank ($104 million), an affiliate of the failed Chicago-based ShoreBank; and Sterling Savings Bank ($9.1 billion Ticker: STSA), which said in an 8-K that its enforcement action had been terminated.

There were six additions this week including First Savings Bank Northwest, Renton, WA ($1.3 billion Ticker: FFNW); Brooklyn Federal Savings Bank, Brooklyn, NY ($523 million Ticker: BFSB); Diamond Bank, FSB, Schaumburg, IL ($278 million); The Bank of Asheville, Asheville, NC ($214 million Ticker: WFSC); Alaska Pacific Bank, Juneau, AK ($177 million Ticker: AKPB), which is the first Alaska-based institution to make an appearance on the Unofficial Problem Bank List; and Wawel Savings Bank, Wallington, NJ ($96 million Ticker: WAWL).

After these changes, the Unofficial Problem Bank List includes 877 institutions with assets of $416.1 billion compared to 872 institutions with assets of $422.4 billion last week.

Transition Matrix
With the passage of another quarter, it is time to update the transition matrix. The Unofficial Problem Bank List debuted on August 7, 2009 with 389 institutions with assets of $276.3 billion (see table).

Over the past 13 months, 144 institutions have been removed from the original list with 103 due to failure, 29 due to action termination, and 12 due to unassisted merger. Thus, about 72 percent of the removals are from failure.

Nearly 27 percent of the 389 institutions on the original list have failed, which is substantially higher than the 12 percent figure usually cited by the media as the failure rate for institutions on the FDIC Problem Bank List. Failed bank assets have totaled $159 billion or nearly 58 percent of the $276.3 billion on the original list.

Since the publication of the original list, another 740 institutions have been added. However, only 632 of those 740 additions remain on the current list as 108 institutions have been removed in the interim. Of the 108 interim removals, 88 were due to failure, 15 were due to unassisted merger, 4 from action termination, and one from voluntary liquidation.

Again, failure represents a disproportionate 81.5 percent of the reason for removal. In total, 1,129 institutions have made an appearance on the Unofficial Problem Bank List and 191 or 16.9 percent have failed.

The average asset size of removals because of failure is $1.2 billion. Currently, the average asset size of institutions on the current list is $474 million versus $710 million on the original list. This would suggest the asset size of future failures will likely be lower.

Unofficial Problem Bank List
Change Summary
		Number of Institutions	Assets ($Thousands)
Start (8/7/2009)		389	276,313,429
Subtractions
	Action Terminated	29	(4,038,439)
	Unassisted Merger	12	(1,762,072)
	Failures	103	(159,037,514)
	Asset Change		(11,891,765)
Still on List at 7/02/2010		245	99,583,639
Additions		632	316,517,379
End (10/01/2010)		877	416,101,018
Interperiod Deletions1
	Action Terminated	4	12,881,783
	Unassisted Merger	15	2,545,683
	Voluntary Liquidation	1	119,082
	Failures	88	70,091,963
	Total	108	85,638,511
1Institution not on 8/7/2009 or 10/01/2010 list but appeared on a list between these dates.