by Calculated Risk on 4/05/2022 03:39:00 PM

The FDIC's official problem bank list is comprised of banks with a CAMELS rating of 4 or 5, and the list is not made public (just the number of banks and assets every quarter). Note: Bank CAMELS ratings are also not made public.

CAMELS is the FDIC rating system, and stands for Capital adequacy, Asset quality, Management, Earnings, Liquidity and Sensitivity to market risk. The scale is from 1 to 5, with 1 being the strongest.

As a substitute for the CAMELS ratings, surferdude808 is using publicly announced formal enforcement actions, and also media reports and company announcements that suggest to us an enforcement action is likely, to compile a list of possible problem banks in the public interest.

DISCLAIMER: This is an unofficial list, the information is from public sources only, and while deemed to be reliable is not guaranteed. No warranty or representation, expressed or implied, is made as to the accuracy of the information contained herein and same is subject to errors and omissions. This is not intended as investment advice. Please contact CR with any errors.

NOTE: I'm no longer updating the spreadsheet.

Here are the quarterly changes and a few comments from surferdude808:

Update on the Unofficial Problem Bank List through March 31, 2022. Since the last update at the end of December 2021, the list decreased by three to 54 institutions after two additions and five removals. Assets increased by $4.3 billion to $60.9 billion, with the change primarily resulting from a $4.1 billion increase from updated asset figures through December 31, 2021. A year ago, the list held 65 institutions with assets of $48.6 billion. Additions during the fourth quarter Nano Banc, Irvine, CA ($1.2 billion) and Citizens State Bank, Ganado, TX ($64.5 million). Removals during the quarter because of action termination included Florida Capital Bank, National Association, Jacksonville, FL ($442 million); Southwest Capital Bank, Albuquerque, NM ($413 million); Commonwealth National Bank, Mobile, AL ($57 million); Ford County State Bank, Spearville, KS ($53 million); and State Bank, Green River, WY ($42 million).

With the conclusion of the fourth quarter, we bring an updated transition matrix to detail how banks are transitioning off the Unofficial Problem Bank List. Since we first published the Unofficial Problem Bank List on August 7, 2009 with 389 institutions, 1,783 institutions have appeared on a weekly or monthly list since then. Only 3.0 percent of the banks that have appeared on a list remain today as 1,729 institutions have transitioned through the list. Departure methods include 1,022 action terminations, 411 failures, 278 mergers, and 19 voluntary liquidations. Of the 389 institutions on the first published list, only 3 or less than 1.0 percent, still have a troubled designation more than ten years later. The 411 failures represent 23.1 percent of the 1,783 institutions that have made an appearance on the list. This failure rate is well above the 10-12 percent rate frequently cited in media reports on the failure rate of banks on the FDIC's official list.

On March 1, 2021, the FDIC released fourth quarter results and provided an update on the Official Problem Bank List. While FDIC did not make a comment within its press release on the Official Problem Bank List, they provided details in an attachment that listed 44 institutions with assets of $170 billion, which was a material increase in assets from the $51 billion of assets listed in the preceding disclosure. The last time the Official Problem Bank List had assets this high was $174 billion as of September 30, 2013. Given the decline in the number of institutions from last quarter, there is speculation as to what institution with assets of about $125 billion was added to the list during the quarter. At year-end 2021, there are six insured institutions with assets ranging from $115 billion to $130 billion. While one these could have caused the large asset jump, there could have been a large removal to mask the identity of the addition. There are stories, perhaps urban myths, of the list being manipulated during the early 1990s to obfuscate the addition of a money center bank to the list. On March 10, 2022, the American Banker published an article on the mystery of the large jump in assets.