by Calculated Risk on 8/07/2010 03:24:00 PM

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

Here is the unofficial problem bank list for August 6, 2010.

Changes and comments from surferdude808:

The Federal Reserve was active this week issuing several Written Agreements and two Prompt Corrective Action Orders. Five state member banks were added to the Unofficial Problem Bank List this week. The additions are New Peoples Bank, Inc., Honaker, VA ($868 million); CapitalBank, Greenwood, SC ($745 million Ticker: CPBK); Premier Bank, Dubuque, IA ($292 million); Oregon Pacific Bank, Florence, OR ($164 million Ticker: ORPB); and Progress Bank of Florida, Tampa, FL ($119 million). Progress Bank of Florida has the dubious distinction of receiving a simultaneous Prompt Corrective Action Order with an enforcement action, which is a first during this crisis.

The Federal Reserve also issued a Prompt Corrective Action Order against Community First Bank - Chicago ($60 million). The OTS converted the Supervisory Agreement against Home Federal Bank of Hollywood to a Cease & Desist Order this week. The other changes are two removals -- the failed Ravenswood Bank ($301 million) and Charter West National Bank, which had its Supervisory Agreement terminated by the OCC.

The Unofficial Problem Bank List had a net change of three additions and finishes the week at 811 institutions with aggregate assets of $416.5 billion.

Click on graph for larger image in new window.

This graph shows the number of banks on the unofficial list. The number of institutions has more than doubled since we started the list in early August 2009 - even with all the bank failures (failures are removed from the list). The number of assets is up 50 percent over the last year.

On August 7, 2009, we listed 389 institutions with $276 billion in assets, and now the list has 811 institutions and $416.5 billion in assets.

The four red dots are the number of banks on the official problem bank list as announced in the FDIC quarterly banking profile for Q2 2009 through Q1 2010. The dots are lagged one month because of the delay in announcing formal actions. The FDIC Q2 2010 Quarterly Banking Profile will be released in a two weeks.

The unofficial count is close, but is slightly lower than the official count - probably mostly due to timing issues - so I expect the FDIC to list around 840 to 870 institutions at the end of Q2.

by Calculated Risk on 8/07/2010 11:41:00 AM

From the National Multi Housing Council (NMHC): Widespread Improvement Continues for Apartment Industry, According to NMHC Quarterly Survey of Market Conditions

The Market Tightness Index, which measures changes in occupancy rates and/or rents, rose from 81 to 83. Fully 69 percent of respondents said markets were tighter (meaning lower vacancies and/or higher rents). This was the sixth straight quarter in which this measure has risen, and is the highest figure since July 2006.
...
“Demand for apartment residences has substantially increased thanks to modest improvements in the jobs market and the continuing decline in homeownership rates. ... Going forward, the near-term outlook for the apartment industry is likely to be tied to the pace of job growth,” [said NMHC Chief Economist Mark Obrinsky]

Click on graph for larger image in new window.

This graph shows the quarterly Apartment Tightness Index.

The index has increased for six straight quarters, but only has indicated tighter market conditions for the last two quarters (from very weak conditions).

A reading above 50 suggests the vacancy rate is falling. Based on limited historical data, I think this index will lead reported apartment rents by about 6 months to 1 year.

Also this data is a survey of large apartment owners only. The data released in late July from the Census Bureau showed the rental vacancy rate was steady in Q2 for all rental units in all areas.

A final note: The results of this survey are a little surprising, but it does suggest the rental market might have bottomed - at least for now. I've heard from a couple of sources that effective rents have risen slightly over the first half of 2010 at some large apartment complexes. Just something to be aware of ... (I've posted about this before).

by Calculated Risk on 8/07/2010 08:30:00 AM

This is a new repeat sales index for commercial real estate. Previously I've only been using the Moodys/REAL Commercial Property Price Index (CPPI) for commercial real estate.

From CoStar: CoStar Commercial Repeat-Sales Indices, July 2010

The commercial real estate market’s pricing has been a tale of two worlds with the largest metro markets attracting significant institutional capital and forcing prices upward over the first two quarters of 2010, while the broader market has continued to soften.

This divergence of the two worlds may soon change as we are now witnessing a pause and softening even within the investment or institutional grade primary markets.

Over the past ten months we have seen the overall CCRSI oscillate from positive to negative and back again, with preliminary July figures very likely to be down for the investment grade property markets. From May to June, the overall CCRSI was down 7.78% with the investment grade property declining by 4.83%, reversing previous positive movement.
emphasis added

Click on graph for larger image in new window.

This graph from CoStar shows the indexes for investment grade, general commercial and a composite index. The investment grade index had been increasing - but turned sharply lower in June.

On the number of transactions:

The CCRSI July report is based on data through the end of June. In June, 665 sales pairs were recorded, up significantly from May, during which 506 transactions occurred. Overall, there has been an upward trend in pair volume going back to 2009. February 2009 appears to have been the low point in the downturn in terms of pair volume, when 374 transactions were recorded.
...
Distress is also a factor in the mix of properties being traded. Since 2007, the ratio of distressed sales to overall sales has gone from around 1% to above 23% currently. Hospitality properties are seeing the highest ratio, with 35% of all sales occurring being distressed. Multifamily properties are seeing the next highest level of distress at 28%, followed by office properties at 21%, retail properties at 18%, and industrial properties at 17%.

Just another index to follow!

by Calculated Risk on 8/06/2010 09:20:00 PM

Earlier employment posts today (with many graphs):

July Employment Report: 12K Jobs ex-Census, 9.5% Unemployment Rate for graphs of unemployment rate and a comparison to previous recessions.

Employment-Population Ratio, Part Time Workers, Unemployed over 26 Weeks

Employment Report: Temporary Help and Diffusion Index

From the California Franchise Tax Board today: Last Chance to Apply for State’s First-Time Buyer Tax Credit

The Franchise Tax Board (FTB) announced today that it will stop accepting applications for the First-Time Buyer Credit at midnight Sunday, August 15, 2010.

As of August 4, FTB has received 31,460 applications. Because some of the applications are invalid or duplicates, FTB will continue to accept them through August 15, to ensure that enough valid applications are received to properly allocate the full $100 million of tax credit. FTB estimates that it can award approximately 17,500-20,000 credit certificates to unique and valid applicants. However, once the funds are exhausted, any remaining applications will be denied.
...
California homebuyers still have time to qualify for the state’s other $100 million home tax credit for the purchase of a new home. The New Home Credit is available for taxpayers who purchase (close escrow) a new home on or after May 1, 2010, and before August 1, 2011, as long as they enter into an enforceable contract executed before January 1, 2011. The seller must certify that the home has never been previously occupied.

Here are tables with the number of applications received so far.

It appears that the first time homebuyer tax credit allocation was exhausted over a month ago, and it is very unlikely that anyone applying today will receive a credit. The new homebuyer credit is still available, but probably for not much longer.

by Calculated Risk on 8/06/2010 07:05:00 PM

Earlier employment posts today (with many graphs):

July Employment Report: 12K Jobs ex-Census, 9.5% Unemployment Rate for graphs of unemployment rate and a comparison to previous recessions.

Employment-Population Ratio, Part Time Workers, Unemployed over 26 Weeks

Employment Report: Temporary Help and Diffusion Index
Losses to behold,
Quoth the Raven, nevermore!
One can only hope.
by Soylent Green is People
From the FDIC: Northbrook Bank and Trust Company, Northbrook, Illinois, Assumes All of the Deposits of Ravenswood Bank, Chicago, Illinois

As of June 30, 2010, Ravenswood Bank had approximately $264.6 million in total assets and $269.5 million in total deposits.
...
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $68.1 million. ... Ravenswood Bank is the 109th FDIC-insured institution to fail in the nation this year, and the thirteenth in Illinois. The last FDIC-insured institution closed in the state was Arcola Homestead Savings Bank, Arcola, on June 4, 2010.

by Calculated Risk on 8/06/2010 04:09:00 PM

This post is a little more technical ...

Earlier employment posts today (with many graphs):

July Employment Report: 12K Jobs ex-Census, 9.5% Unemployment Rate for graphs of unemployment rate and a comparison to previous recessions.

Employment-Population Ratio, Part Time Workers, Unemployed over 26 Weeks

Temporary Help

From the BLS report:

The number of jobs in temporary help services showed little movement (-6,000) over the month.

The following graph was used early this year as the basis for several optimistic employment forecasts (I disagreed).

Click on graph for larger image in new window.

This graph is a little complicated. The red line is the three month average change in temporary help services (left axis). This is shifted four months into the future.

The blue line (right axis) is the three month average change in total employment (excluding temporary help services).

Unfortunately the data on temporary help services only goes back to 1990, but it does appear that temporary help leads employment by about four months.

The thinking was that before companies hire permanent employees following a recession, employers first increase the hours worked of current employees and also hire temporary employees. After the number of temporary workers increased sharply late last year, some people thought this might be signaling the beginning of a strong employment recovery.

I was skeptical and joked that "We're all temporary now!" As this graph shows, the hoped for surge in overall hiring didn't happen. There are a number of reasons why employment growth is sluggish following the credit bust - mostly related to excess capacity in many sectors, and the excess supply of houses (usually new residential investment is one of the key sectors for employment at the beginning of a recovery).

This will be my last post with this graph.

Note: the temporary hiring for the Census is excluded from this graph.

Diffusion Index

The BLS diffusion index for total private employment was steady at 55.6 in July. For manufacturing, the diffusion index is at 50.0; down from 53.0 in June, and down sharply from 65.9 in May.

Think of this as a measure of how widespread job gains are across industries. The further from 50 (above or below), the more widespread the job losses or gains reported by the BLS. From the BLS:

Figures are the percent of industries with employment increasing plus one-half of the industries with unchanged employment, where 50 percent indicates an equal balance between industries with increasing and decreasing employment.

The increase in the diffusion index earlier this year was one of the clear positives in the monthly employment reports. The decrease in the diffusion index over the last few months (falling to 50% for manufacturing in July), is disappointing.