Like a wave of tornadoes touching down, the FDIC struck across the country on Friday shuttering five banks from coast to coast. The regulator took down Plantation Federal in Pawleys Island, South Carolina, Bank of the Eastern Shore of Cambridge and HarVest Bank of Maryland in Gaithersburg, Maryland, Inter Savings Bank, fsb in Maple Grove, Minnesota and Palm Desert National Bank in Palm Desert, California.
All of these banks displayed clear signs of distress for months to years preceding their demise according to the records in Institutional Risk Analytics Bank Monitor. As is customary when a bank fails, a forensic page is released on the bank for open research use.
Palm Desert National Bank -- Palm Desert, CA had been stressed for years according to Bank Stress Index estimates. It has been overcapitalized since March of 2010. As of December 2011, the bank had over 37 percent of its lending base in some sort of trouble and a whopping Texas Ratio of 690 percent. Assets of the bank have been acquired by Pacific Premier Bank.
HarVest Bank of Maryland -- Gaithersburg, MD had also been stressed as far back as 2009. Twenty percent of its lending was troubled and the institution has been Undercapitalized since September of 2010. They had a 470 percent Texas Ratio. Assets of this bank were purchased and assumed by Sonabank.
Bank of the Eastern Shore -- Cambridge, MD had only been Undercapitalized for a little over a year and displayed distress going back to the end of 2009. Texas Ratio was only 162 percent with 14 percent troubled assets in December 2011. But period net income was deeply negative and apparently no relief from this condition as forthcoming. Sadly, the FDIC was unable to locate a buyer and this bank failed with no acquirer. This means the insured depositors will be paid to the FDIC insured amounts and all other claims will have to seek recovery from the bankruptcy court.
Inter Savings Bank, fsb D/B/A InterBank, fsb -- Maple Grove, MN was another long term stressed bank that had been Undercapitalized since September 2009. It too saw net income diving deep into the red in the last year. This one found a buyer and the assets are going to Great Southern Bank over the weekend.
Plantation Federal Bank -- Pawleys Island, SC is the last of this week's failed banks. This one is another long term stress bank that went Undercapitalized beginning in December of 2010. It was the most profuse net income red ink bleeder of this week's group. Texas Ratio was high at 477 percent and troubled loans were just under 1/5th of the book. They were assumed by First Federal Bank.
There's a pattern to this week's group along with last Friday's closure of Fort Lee Federal Savings Bank, FSB of Fort Lee, New Jersey worth noting -- the FDIC may be cleaning house on long term stressed institutions that have so far failed to work their way out of their woes more aggressively as 2012 progresses. With five strike teams in the field this weekend, the FDIC is pushing forward with gusto.