by Calculated Risk on 3/01/2014 10:21:00 AM

This is an unofficial list of Problem Banks compiled only from public sources.

Here is the unofficial problem bank list for February 28, 2014.

Changes and comments from surferdude808:

Busy week as the FDIC closed a couple of banks, provided an update on its enforcement action activities, and released industry results and the Official Problem Bank List for the fourth quarter of 2013. In all, there were 12 removals that dropped the unofficial list to 566 institutions with assets of $182.1 billion. Assets declined by $10.9 billion from last week with $4.5 billion coming from the update to assets through year-end 2013. A year ago, the list held 808 institutions with assets of $298.1 billion.

Among the 12 removals were six action terminations, four mergers, and two failures. Action were terminated against Patriot Bank, Houston, TX ($1.3 billion); Kaw Valley Bank, Topeka, KS ($364 million); Insouth Bank, Brownsville, TN ($301 million); Northpointe Bank, Grand Rapids, MI ($300 million); SouthernTrust Bank, Goreville, IL ($49 million); and D'Hanis State Bank, Hondo, TX ($47 million). Also, the FDIC terminated a Prompt Corrective Action order against Oxford Bank, Oxford, MI ($261 million Ticker: OXBC).

Removals through unassisted mergers include First Place Bank, Warren, OH ($2.5 billion Ticker: FPFC); Great Florida Bank, Coral Gables, FL ($1.0 billion Ticker: GFLB); First National Bank of New York, Merrick, NY ($255 million); and Premier Service Bank, Riverside, CA ($128 million).

After a month off, the FDIC got back to closing two banks -- Millennium Bank, National Association, Sterling, VA ($130 million Ticker: MBVA); and Vantage Point Bank, Horsham, PA ($63 million).

The FDIC told us this week there are 467 institutions with assets of $153 billion on the Official Problem Bank List. The unofficial list has 99 more institutions and $29.1 billion more in assets. The difference is down from 130 institutions and $47.2 billion in assets last quarter. The differences have narrowed from 157 institutions and $65 billion in assets a year ago. In contrast, the official list had higher totals four years ago with 58 and $76.9 billion more in institutions and assets, respectively.

by Calculated Risk on 2/28/2014 06:14:00 PM

From the FDIC: First Choice Bank, Mercerville, New Jersey, Assumes All of the Deposits of Vantage Point Bank, Horsham, Pennsylvania

As of December 31, 2013, Vantage Point Bank had approximately $63.5 million in total assets and $62.5 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $8.5 million. Compared to other alternatives, First Choice Bank's acquisition was the least costly resolution for the FDIC's DIF. Vantage Point Bank is the 5th FDIC-insured institution to fail in the nation this year, and the first in Pennsylvania.

A twofer Friday!

by Calculated Risk on 2/28/2014 05:45:00 PM

From the FDIC: WashingtonFirst Bank, Reston, Virginia, Assumes All of the Deposits of Millennium Bank, National Association, Sterling, Virginia

As of December 31, 2013, Millennium Bank, N.A. had approximately $130.3 million in total assets and $121.7 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $7.7 million. Compared to other alternatives, WashingtonFirst Bank's acquisition was the least costly resolution for the FDIC's DIF. Millennium Bank, N.A. is the 4th FDIC-insured institution to fail in the nation this year, and the first in Virginia.

It is Friday!  On pace for about the same number of bank failures as last year (24).

by Calculated Risk on 2/28/2014 04:06:00 PM

From housing economist Tom Lawler: Government New Home Sales Report, If Accurate, Suggests Large Builder Share Down; Aggressive Home Price Hikes May Be to Blame

The Commerce Department earlier this week estimated that new SF home sales ran at a seasonally adjusted annual rate of 468,000, up 9.6% from December’s upwardly-revised (to 427,000 from 414,000) pace. Estimated sales for October and November were revised downward slightly, and the estimated sales for the fourth quarter of 2013 were not revised.

While January’s new SF home sales estimate was somewhat higher than I expected, I was even more surprised that last quarter’s sales estimates were not revised downward. Most large publicly-traded home builders reporting on a calendar quarter showed relatively weak net orders last quarter compared to a year earlier, and the nine large builders I regularly track¹ had combined net orders that were down 3.8% from a year earlier (not seasonally adjusted, of course.) That contrasts sharply with Census estimates showing an unadjusted YOY increase in sales last quarter of about 15%.

Of course, comparisons of builder results and Census sales estimates are tricky, given (1) the different treatment of cancellations; and (2) differences in the timing of the recognition of contract signings. Nevertheless, the difference results were “unusual,” and over the last two years builder results that varied materially from Census preliminary estimates have been a decent predictor of revisions to Census estimates of SF sales.

If in fact the Census sales estimates are reasonable (further revisions will occur, given its methodology), an implication would be that large builders’ share of the new SF home market declined significantly in the second half of last year. One possible reason is that many of the large publicly-traded builders, facing demand that exceeded their ability to supply new homes (in several instances because of “supply-chain” issues) in the early part of the year, jacked up prices by not just unusually large amounts, but by more than other builders. The combination of higher mortgage rates and these unusually aggressive price hikes not only slowed their sales, but also slowed their sales relative to other builders. Given that the huge price hikes at many large builders pushed margins on closed sales in the second half of last year to the highest levels in seven to eight years, it’s perhaps not “shocking” that other builders weren’t as aggressive.

Given the optimistic sales plans most of these large builders have for 2014 – backed by rapid expansions in their land/lot acquisitions over the last one-to-two years – it seems unlikely that these large publicly-traded builders will be able to hike prices much if at all this year unless they are will to see their share erode further, which seems unlikely.

¹ D.R. Horton, Pulte, NVR, Ryland, Beazer, Meritage, Standard Pacific, MDC, and M/I.

by Calculated Risk on 2/28/2014 01:14:00 PM

From Zillow: Negative Equity Crosses 20 Percent Threshhold to End 2013

According to the fourth quarter Zillow Negative Equity Report, the national negative equity rate dipped below 20 percent to 19.4 percent for the first time in years, thereby reducing negative equity by roughly a third from its 31.4 percent peak in the first quarter of 2012. Negative equity has fallen for seven consecutive quarters as home values have risen, freeing almost 3.9 million homeowners nationwide in 2013. The national negative equity rate fell from 27.5 percent of all homeowners with a mortgage as of the end of the fourth quarter of 2012, and 21 percent in the third quarter. However, more than 9.8 million homeowners with a mortgage still remain underwater.
emphasis added

The following graph from Zillow shows negative equity by Loan-to-Value (LTV) in Q4 2013 compared to Q4 2012.

Click on graph for larger image.

From Zillow:

Figure 6 shows the loan-to-value (LTV) distribution for homeowners with a mortgage in 2013 Q4 versus 2012 Q4. Even though many homeowners are still underwater and haven’t crossed the 100 percent LTV threshold to enter into positive equity, they are moving in the right direction.

Almost half of the borrowers with negative equity have a LTV of 100% to 120% (the light red columns). Most of these borrowers are current on their mortgages - and they have probably either refinanced with HARP or the loans are well seasoned (most of these properties were purchased in the 2004 through 2006 period, so borrowers have been current for eight years or so). In a few years, these borrowers will have positive equity.

The key concern is all those borrowers with LTVs above 140% (about 6.5% of properties with a mortgage according to Zillow). It will take many years to return to positive equity ... and a large percentage of these properties will eventually be distressed sales (short sales or foreclosures).

Note: CoreLogic will release their Q4 negative equity report in the next couple of weeks. For Q3, CoreLogic reported there were 6.4 million properties with negative equity, and that will be down further in Q4.