Federal Reservations

Catching up ...

• Kansas City Fed: Tenth District Manufacturing Activity Rebounded in January

The month-over-month composite index was 7 in January, up from revised totals of -2 in December and 4 in November. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. ... The production and shipments indexes jumped to their highest levels since June, and the new orders index climbed from -2 to 8.

All of the regional manufacturing surveys have indicated stronger expansion in January (Empire state, Philly, Richmond and Kansas City). The Dallas Fed survey is scheduled to be released on Monday.

• The Chicago Fed released the national activity index (a composite index of other indicators): Index shows economic activity improved in December

Led by improvements in production- and employment-related indicators, the Chicago Fed National Activity Index increased to 0.17 in December from –0.46 in November. ...
The index’s three-month moving average, CFNAI-MA3, increased from –0.19 in November to –0.08 in December—its highest value since March 2011. December’s CFNAI-MA3 suggests that growth in national economic activity was slightly below its historical trend. The economic slack reflected in this level of the CFNAI-MA3 suggests limited inflationary pressure from economic activity over the coming year.

This graph shows the Chicago Fed National Activity Index (three month moving average) since 1967.

Click on graph for larger image.

According to the Chicago Fed:

A zero value for the index indicates that the national economy is expanding at its historical trend rate of growth; negative values indicate below-average growth; and positive values indicate above-average growth.

• From the Philly Fed:

The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for December 2011. In the past month, the indexes increased in 39 states, decreased in seven, and remained unchanged in four (Arizona, Nebraska, New York, and Wyoming) for a one-month diffusion index of 64.

This is a graph is of the number of states with one month increasing activity according to the Philly Fed. This graph includes states with minor increases (the Philly Fed lists as unchanged).

In December, 42 states had increasing activity, down from 44 in November.

Note: These are coincident indexes constructed from state employment data. From the Philly Fed:

The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.

Here is a map of the three month change in the Philly Fed state coincident indicators. This map was all red during the worst of the recession, and all green in early 2011 - but this is an improvement from last summer.

Originally from Calculated Risk

Note: The graph below includes the enhanced sample discussed last week. "The survey captures more than 75% of all U.S. retail and consumer direct mortgage applications, compared to 50% previously." For a discussion of the changes, see: Presentation to Discuss Enhancements to MBA’s Weekly Applications Survey.

There is also additional data. The weekly survey now includes mortgage rates for both conforming and jumbo loans. There is also a new Monthly Profile report (see sample here: Monthly Profile of State and National Mortgage Activity). This report breaks down the monthly application data by product type, size of loans, and state data. This appears very useful for short-term prepay modeling given the differences across states. This report is only available to subscribers.

The MBA reports: Mortgage Applications Increase in Latest MBA Weekly Survey

The Refinance Index increased 11.2 percent from the previous week. The seasonally adjusted Purchase Index increased 2.6 percent from one week earlier.
...
"Mortgage rates declined last week, at least partially in response to the Fed's announcement that they would shift their portfolio towards longer-term Treasury securities, and that they would resume buying mortgage-backed securities," said Mike Fratantoni, MBA's Vice President of Research and Economics. "With lower rates, refinance application volume increased to its highest level since August 19, 2011. Purchase application volume also increased. However, the increase was in conventional purchase applications, which were up by 4.9 percent. Purchase applications for government loans fell by 0.6 percent over the week, likely influenced by the pending decline in FHA loan limits."
...
The average loan size of all loans for home purchase in the US was $212,700 in August 2011, up from $211,200 in July 2011. The average loan size for a refinance was $241,300, up from $209,200 in July.
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 4.25 percent from 4.29 percent, with points decreasing to 0.35 from 0.41 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.51 percent from 4.55 percent, with points decreasing to 0.38 from 0.46 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The following graph shows the MBA Purchase Index and four week moving average since 1990.

Click on graph for larger image in graph gallery.

August was an especially weak month for this index. This increase was pretty small, and although this doesn't include the large number of cash buyers, this suggests fairly weak home sales in September and October.

Originally from Calculated Risk

Effect on Total Economy-Wide Spending from a Cut in Government Spending Suppose that the federal government cuts its current spending on goods and services. Assuming nothing is done to tax rates, this means that the government's current borrowing will fall commensurately. (This represents a shift in the demand curve for credit, not a movement along it.) All else the same, the interest rates, with the exception of the one-day federal funds rate, which is targeted by the Federal Reserve, will decline as the demand for credit declines.

Originally from The Market Oracle

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

Here is the unofficial problem bank list for Feb 18, 2011.

Changes and comments from surferdude808:

Despite well wishes for a safe banking week, it was anything but with several failures and numerous additions to the Unofficial Problem Bank List. In all, there were six removals and 13 additions this week, which leaves the Unofficial Problem Bank List with 951 institutions with assets of $418.6 billion.

Assets increased by $5.6 billion, which is the largest weekly increase since November 5, 2010. Furthermore, the asset total of $418.6 billion is the highest it has been in nearly three months when they were $419.6 billion at November 19, 2010.

Among the removals are an action termination against Eaton National Bank & Trust Co., Eaton, OH ($190 million) and an unassisted merger as American State Bank, Tulsa, OK ($13 million) merged into Peoples Bank, Tulsa, OK.

All of the failures this week were on the Unofficial Problem Bank List and they include Habersham Bank, Clarkesville, GA ($396 million Ticker: HABC); San Luis Trust Bank, FSB, San Luis Obispo, CA ($306 million Ticker: SNLS); Citizens Bank of Effingham, Springfield, GA ($221 million); and Charter Oak Bank, Napa, CA ($136 million). Interestingly, Habersham Bank must have been on double secret probation with the FDIC as they never disclosed the Cease & Desist order Habersham Bank was under. In addition, the OTS issued a Prompt Corrective Acton order against San Luis Trust Bank, FSB only nine days before its failure.

As anticipated, the OCC released its actions through the middle of January 2011, which contributed to the numerous additions this week. Among the 13 additions are Wilmington Trust FSB, Baltimore, MD ($1.8 billion Ticker: WL); Southern Community Bank and Trust, Winston Salem, NC ($1.7 billion Ticker: SCMF); Queensborough National Bank & Trust Company, Louisville, GA ($941 million); Horry County State Bank, Loris, SC ($804 million Ticker: HCFB); and One Bank & Trust, National Association, Little Rock, AR ($439 million).

Other changes include Prompt Corrective Action orders issued by the Federal Reserve against the Bank of Whitman, Colfax, WA ($722 million) and Idaho Banking Company, Boise, ID ($195 million) and the OCC against Western Springs National Bank and Trust, western Springs, IL ($196 million).

Next week we anticipate the FDIC will release its actions through January 2011. Perhaps we should not issue any well wishes for a safe banking for the upcoming week given the carnage this past week.

CR Note: The FDIC will probably release the Q4 Quarterly Banking Profile in the next couple of weeks, and that will include the number of banks on the official problem bank list at the end of 2010.

Originally from Calculated Risk

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

Here is the unofficial problem bank list for Jan 28, 2011.

Changes and comments from surferdude808:

Not the safest week in banking as the FDIC released its formal enforcement actions for December 2010 and closed four institutions including the largest bank headquartered in New Mexico. This week there were 15 additions and three removals. The changes leave the Unofficial Problem Bank list at 949 institutions with assets of $410.9 billion, up from 937 institutions with assets of $409.4 billion.

The removals include three of the four failures -- First Community Bank, Taos, NM ($2.3 billion Ticker: FSNM); Firstier Bank, Louisville, CO ($782 million); and Evergreen State Bank, Stoughton, WI ($246 million). The other failure this week -- The First State Bank, Camargo, OK was only placed under enforcement action in December 2010 (35 days before it failed) by the FDIC so it never made an appearance on the Unofficial Problem Bank List.

Among the 13 additions are First Federal Savings Bank of Elizabethtown, Elizabethtown, KY ($1.2 billion Ticker: FFKY); The Heritage Bank, Hinesville, GA ($952 million); First American International Bank, Brooklyn, NY ($604 million); Park Federal Savings Bank, Chicago, IL ($216 million Ticker: PFED); and Premier Service Bank, Riverside, CA ($157 million Ticker: PSBK).

Other changes include the issuance of Prompt Corrective Action orders by the FDIC against The Bank of Commerce, Wood Dale, Il ($174 million) and the Federal Reserve against Virginia Business Bank, Richmond, VA ($129 million). Positively, the FDIC terminated the PCA order against AmericanWest Bank, Spokane, WA ($1.5 billion Ticker: AWBCQ).

After the monthly release of actions by the FDIC, it would not be unusual for the Unofficial Problem Bank List to trend down until the middle of next month as closings tend to outpace new order issuance during this part of the month. Overall, if trends persist, the list could hit CR's anticipated [1000] mark by the end of May 2011.

Originally from Calculated Risk

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

Here is the unofficial problem bank list for Dec 31, 2010.

Changes and comments from surferdude808:

The FDIC finally released its enforcement actions for November 2010. After 18 additions and two removals, the Unofficial Problem Bank List finishes 2010 at 935 institutions and assets of $412.4 billion. The two removals were McClave State Bank, McClave, CO ($21 million) and First Resource Bank, Savage, MN ($17 million).

Among the 18 additions are Baylake Bank, Sturgeon, WI ($1.1 billion Ticker: BYLK); Signature Bank of Arkansas, Fayetteville, AR ($617 million); Regent Bank, Davie, FL ($471 million Ticker: RGTB); Grand Bank & Trust of Florida, West Palm Beach, FL ($463 million); United American Bank, San Mateo, CA ($344 million Ticker: UABK); Santa Lucia Bank, Atascadero, CA ($265 million Ticker: SLBA); and New Millennium Bank, New Brunswick, NJ ($246 million Ticker: NMNB).

Other changes include the Federal Reserve issuing a Prompt Corrective Action (PCA) order against BankEast, Knoxville, TN ($287 million). The FDIC terminated a PCA order against Bank 1st, Albuquerque, NM ($78 million).
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 below). Over the past 16 months, 163 institutions have been removed from the original list with 114 due to failure, 35 due to action termination, and 14 due to unassisted merger. Almost 30 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 $161 billion or nearly 59 percent of the $276.3 billion on the original list.

Since the publication of the original list, another 844 institutions have been added. However, only 709 of those 844 additions remain on the current list as 135 institutions have been removed in the interim. Of the 135 interim removals, 102 were due to failure, 23 were due to unassisted merger, 8 from action termination, and two from voluntary liquidation. In total, 1,296 institutions have made an appearance on the Unofficial Problem Bank List and 216 or 16.7 percent have failed. Of the 298 removals, failure is the primary form of exit (216 or 72 percent) while only 43 or 14.4 percent have been rehabilitated. The average asset size of removals because of failure is $1.1 billion. Currently, the average asset size of institutions on the current list is $441 million versus $710 million on the original list.

Unofficial Problem Bank List
Change Summary
		Number of Institutions	Assets ($Thousands)
Start (8/7/2009)		389	276,313,429
&nbsp
Subtractions
	Action Terminated	35	(5,158,906)
	Unassisted Merger	14	(2,176,310)
	Failures	114	(161,735,942)
	Asset Change		(14,407,340)
&nbsp
Still on List at 7/02/2010		226	92,834,931
&nbsp
Additions		709	319,519,339
&nbsp
End (12/31/2010)		935	412,354,270
&nbsp
Interperiod Deletions1
	Action Terminated	8	14,115,832
	Unassisted Merger	23	22,357,619
	Voluntary Liquidation	2	833,567
	Failures	102	75,345,146
	Total	135	112,652,164
1Institution not on 8/7/2009 or 12/31/2010 list but appeared on a list between these dates.

Originally from Calculated Risk

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

Here is the unofficial problem bank list for Dec 17, 2010.

Changes and comments from surferdude808:

The Unofficial Problem Bank List finished the week at 920 institutions with assets of $411.4 billion, up from 919 institutions last week. Assets were essentially unchanged. This week there were six failures, but only four were on the list -- The Bank of Miami, National Association, Coral Gables, FL ($448 million); Chestatee State Bank, Dawsonville, GA ($244 million); United Americas Bank, National Association, Atlanta, GA ($242 million); and Appalachian Community Bank, F.S.B., McCaysville, GA ($68 million Ticker: APAB).

As anticipated, the OCC released its actions through mid-November, which contributed to the five additions the weeks. Newly joining the list are Omnibank, National Association, Houston, TX ($384 million); Empire National Bank, Islandia, NY ($319 million Ticker: EMPK); The First National Bank of Mercersburg, Mercersburg, PA ($188 million Ticker: MCBG); The Headland National Bank, Headland, AL ($114 million); and The First National Bank of Fleming, Fleming, CO ($18 million).

The OCC strengthened actions against First Citizens Bank of Polson, National Association, Polson, MT ($26 million) and Metropolitan National Bank, New York, NY ($600 million) by replacing Formal Agreements with Consent Orders. The other change was a Prompt Corrective Action order being issued by the Federal Reserve against The Park Avenue Bank, Valdosta, GA ($1.0 billion).

We anticipate the FDIC will release its actions for November 2010 next week, and it is likely they will take the rest of the year off executing closures.

So 157 failures is probably it for 2010.

Originally from Calculated Risk

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

Here is the unofficial problem bank list for Nov 19, 2010.

Changes and comments from surferdude808:

As anticipated, the Unofficial Problem Bank List rose above 900 as the OCC released its actions through the middle of October 2010 today. Net additions were 5 institutions, which pushed the list total to 903. Assets increased this week by $1.13 billion pushing the aggregate total to $419.6 billion.

There were four removals this week including the three failures -- First Banking Center, Burlington, WI ($822 million Ticker: FCBI); Gulf State Community Bank, Carrabelle, FL ($117 million); and Allegiance Bank of North America, Bala Cynwyd, PA ($116 million). First Banking Center opened in 1920, survived the Great Depression, but did not make it through the Great Recession.

The other removal was the termination of a Supervisory Agreement against The First National Bank of Trenton, Trenton, TX ($147 million) by the OCC. We would not be surprised if the termination is because the Supervisory Agreement is being replaced by a Consent Order.

The nine additions this week include Mid-Wisconsin Bank, Medford, WI ($498 million Ticker: MWFS); First National Bank South, Alma, GA ($335 million); Farmers State Bank, Victor, MT ($323 million); Madison National Bank, Merrick, NY ($305 million); United Americas Bank, National Association, Atlanta, GA ($263 million); San Antonio National Bank, Refugio, TX ($249 million); First Federal Bank, A FSB, Tuscaloosa, AL ($180 million); Santa Clara Valley Bank, National Association, Santa Paula, CA ($140 million); and Sonoran Bank, N.A., Phoenix, AZ ($36 million).

Other changes this week include the Federal Reserve issuing a Prompt Corrective Action Order against Legacy Bank, Milwaukee, WI ($216 million); and the OCC converting a Formal Agreement to a Consent Order against Fidelity Bank of Florida, National Association, Merritt Island, FL ($419 million). We anticipate the FDIC will release its actions for October next week.

The Q3 FDIC Quarterly banking profile will be released soon and will probably show around 900 problem banks at the end of September.

Originally from Calculated Risk

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

Here is the unofficial problem bank list for September 3, 2010.

Changes and comments from surferdude808:

It was a comparatively quiet week for the Unofficial Problem Bank List as there were only four additions and no removals with the FDIC taking the long holiday weekend off from closures.

The additions include First National Bank of Chester County, Chester, PA ($1.2 billion Ticker: FCEC); Lafayette Savings Bank, FSB, Lafayette, IN ($379 million Ticker: LSBI); Oregon Community Bank & Trust, Oregon, WI ($195 million); and Hull Federal Savings Bank, Baltimore, MD ($27 million). Other changes include Prompt Corrective Action Orders issued by the Federal Reserve against First Community Bank ($2.6 billion Ticker: FSNM) and Sunrise Bank ($134 million) and OTS against AnchorBank, fsb ($4.0 billion Ticker: ABCW).

The Unofficial Problem Bank List includes 844 institutions with aggregate assets of $412 billion. This week the FDIC released its official count of problem institutions at 829 with assets of $403 billion as of June 30th.

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 844 institutions and $412 billion in assets.

The 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 Q2 2010. The dots are lagged one month because of the delay in announcing formal actions.

The unofficial count is close to the official count (the difference is mostly timing issues), and the FDIC will probably have close to 1,000 banks on the list by the end of the year.

Originally from Calculated Risk

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

Here is the unofficial problem bank list for August 20, 2010.

Changes and comments from surferdude808:

Failures and the OCC disclosure of its recent actions contributed to many changes in the Unofficial Problem Bank List this week. After 12 additions and 8 removals this week the Unofficial Problem Bank List stands at 817 institutions with aggregate assets of $415.9 billion.

The eight failures this week – ShoreBank ($2.3 billion), Los Padres Bank ($902 million Ticker: HWFG), Butte Community Bank ($523 million Ticker: CVLL), Sonoma Valley Bank ($363 million Ticker: SBNK), Pacific State Bank ($323 million Ticker: PSBC), Independent National Bank ($163 million Ticker: IBFL), Community National Bank at Bartow ($75 million), and Imperial Savings and Loan Association ($10 million) were removed.

There were 12 additions this week including Southern First Bank, National Association, Greenville, SC ($742 million Ticker: SFST); First National Bank South Dakota, Yankton, SD ($405 million Ticker: FINN); The Peoples National Bank, Easley, SC ($341 million Ticker: PBCE); and United Fidelity Bank, fsb, Evansville, IN ($214 million Ticker: FDLB).

Other changes include Prompt Corrective Action Orders issued by the Federal Reserve against First Banking Center ($869 million Ticker: FBCI) and by the OTS against Security Savings Bank, F.S.B. ($536 million).

Note: The FDIC Q2 2010 Quarterly Banking Profile will be released this coming week.

Originally from Calculated Risk