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Failed Banks: Class Of 2014

By Divya Lulla and Robert Clark

A SNL Financial Exclusive Report

Regulators closed two banks Feb. 28, increasing the year's total number of failures to five. In 2013, regulators had closed three banks through Feb. 28.

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The five bank failures in 2014 did not involve a loss-share agreement. In 2013, only three of the 24 bank failures had a loss-share agreement. In 2012, the FDIC entered loss-share agreements with the buyers of 20 of the 51 closed banks.

The median cost to the deposit insurance fund at the time of announcement as a percentage of the failed banks' assets was 6% in 2014, 22% in 2013 and 21% in 2012.

Sterling, Va.-based Millennium Bank NA ($130.3 million)

Established in 1999, the bank had two branches in northern Virginia. It was the first failure in Virginia since Bank of the Commonwealth in September 2011. The bank had incurred net losses for 23 consecutive quarters for an aggregate loss of $52.1 million. Millennium topped the list of banks having the highest adjusted Texas ratio for the quarter ended Sept. 30, 2013, according to an analysis conducted by SNL.

(Millennium Bank report by Leasing News:(http://leasingnews.org/archives/Mar2014/3_03.htm#bank_beat)

Horsham, Pa.-based Vantage Point Bank ($63.5 million)

The bank was formed in 2007 and operated one branch in the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA. This marks the first failure in Pennsylvania since Nova Bank in October 2012. The FDIC had issued a consent order to Vantage Point on Dec. 9, 2013. The bank had also recently experienced turnover in senior management.

(Vantage Bank report by Leasing News:
(http://leasingnews.org/archives/Mar2014/3_03.htm#bank_beat)

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Boise, Idaho-based Syringa Bank ($153.4 million)

Established in 1997, the bank had six branches in Idaho, five of which were in the Boise City-Nampa MSA. This was the first bank failure in Idaho since April 2009. Syringa Bank's parent, Syringa Bancorp, had received TARP funds in January 2009. Syringa Bank had incurred net losses for 19 consecutive quarters for an aggregate loss of $40.0 million. Total loans and leases were $119.8 million at year-end 2013, down from $260.2 million five years earlier.

(Syringa Bank Report by Leasing News:
(http://leasingnews.org/archives/Feb2014/2_03.htm#abnk_beat)

El Reno, Okla.-based Bank of Union ($317.2 million)

Established in 1900, Bank of Union had two branches in central Oklahoma. This was the first bank failure in Oklahoma since First Capital Bank in June 2012. The FDIC issued Bank of Union a consent order in June 2013. More than half of the bank's loan portfolio was nonperforming as of Sept. 30, 2013.

(Bank of Union report by Leasing News:
(http://leasingnews.org/archives/Jan2014/1_27.htm#bank_beat)

West Chicago, Ill.-based DuPage National Bank ($53.5 million)

The bank was established in 1891 and operated three branches in the Chicago MSA. DuPage National was the first bank failure in Illinois since Covenant Bank in February 2013. The bank had incurred net losses for 25 consecutive quarters for an aggregate loss of $17.7 million. As of Sept. 30, 2013, 17.41% of its gross loans were past due or nonaccrual.

(DuPage Bank Report by Leasing News:
(http://leasingnews.org/archives/Jan2014/1_27.htm#bank_beat)

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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.