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Failed Banks: Class Of 2014--SNL Financial Report

By Divya Lulla and Zuhaib Gull

The Oklahoma State Banking Department closed Freedom State Bank, Freedom, Oklahoma on June 27, making it the 12th FDIC-insured institution to fail in the U.S. in 2014. In comparison, there were 16 bank closures through June 27 in 2013.

(Year-end 2010 there were 814 FDIC-Insured Problem Institutions. March 31, 2014: 411; total assets $126.1 billion, compared to almost $15 trillion in assets held by al FDIC insured institutions. )

((25 bank failures, 2008; 140, 2009; 157, 2010; 92, 2011; 51, 2012;
24, 2013.

The FDIC has relied less on loss-share agreements to complete its failed-bank transactions of late. None of the 12 government-assisted transactions this year included a loss-share agreement, while three of the failures in 2013 included these agreements. In 2012, 20 failures included loss-share agreements.

Failures in 2014 have cost the FDIC's deposit insurance fund less in 2014 as compared to years before. The median cost to the fund at the time of announcement as a percentage of the failed banks' assets is 12.33% in 2014 to date, down from 22% for full year 2013 and 21% in 2012.

Freedom State Bank ($22.8 million)
Freedom State Bank's closure marked the second failure in Oklahoma this year after Bank of Union was shuttered Jan. 24. Established in 1919, Freedom State Bank operated a single branch in Oklahoma before it was shut down. The FDIC had issued a prompt corrective action directive to the bank May 2.
(Leasing News article on Freedom State Bank Closing)

Moline, Ill.-based Valley Bank ($456.4 million
Valley Bank, one of the River Valley Bancorp subsidiaries to fail June 20, operated 13 branches in Illinois before its closure. The bank's nonperforming loans ratio stood just shy of 24% at March 31, and the institution posted $51.3 million in total losses from 2010 through March 31. Valley Bank was also operating under a cease and desist order from Jan. 15.
(Leasing News article on Valley Bank Closing)

Fort Lauderdale, Fla.-based Valley Bank ($81.8 million)
Established in 1974, Valley Bank operated four branches in Florida before its closure June 20. This was the first Florida failure since Graceville, Fla.-based Bank of Jackson County closed Oct. 30, 2013. Valley Bank was operating under a and desist order dated Dec. 18, 2013, and had lost $17.9 million from 2009 through March 31. The Seminole Tribe of Florida had expressed an interest in acquiring Valley Bank but its application June 4.
(Leasing News article on Valley Bank Closing)

Bel Air, Md.-based Slavie Federal Savings Bank (NYSEARCA:MHC) ($140.1 million)
Founded as a community bank in 1900, Slavie Federal Savings Bank (MHC) marks the ninth bank failure in Maryland since 1998. This was the first failure in the state since regulators closed HarVest Bank of Maryland on April 27, 2012. Prior to its closure, the OCC issued a cease and desist order to Slavie on Jan. 7. The institution had struggled to improve its capital position as its Tier 1 risk-based ratio fell to 3.83% in the first quarter from 11.92% two years prior. Furthermore, the bank failed to earn a profit in the last 11 quarters, incurring an aggregate net loss of $16.4 million over that period.
(Leasing News article on Slavie Federal Savings Bank Closing)

Cincinnati-based Columbia Savings Bank ($36.5 million)
Established in 1892, Columbia Savings Bank operated out of a single branch in Cincinnati. The failure marks the first in Ohio after regulators closed Milford-based Bramble Savings Bank in 2010. The FDIC issued a corrective action directive to Columbia Savings Bank on March 13, ordering it to either increase its capital levels or accept an offer to be acquired by another bank. Prior to its failure, the institution had incurred a net loss in 22 of its last 24 quarters. The aggregate loss for those quarters totaled $5.36 million.
(Leasing News article on Columbia Savings Bank Closing)

Berwyn, Ill.-based AztecAmerica Bank ($66.3 million)
The bank was established in 2005, focusing on the Hispanic community in Chicago, according to Crain's Chicago Business. In an SNL analysis, AztecAmerica was ranked fifth in the list of banks and thrifts with the highest adjusted Texas in the first quarter. The bank had incurred net losses for 22 of the last 25 quarters for an aggregate loss of $13.8 million.
(AztecAmerica Bank Report by Leasing News:)

Fairfax, S.C.-based Allendale County Bank ($51.5 million)
The bank was established in 1937 and operated five branches in South Carolina. This represents the first bank failure in South Carolina since Carolina Federal Savings Bank in June 2012. The FDIC had issued a and desist order to Allendale County Bank in July 2013. At the end of 2013, about 56% of the company's loan portfolio consisted of consumer loans. Due to a substantial rise in its loan loss provision, the bank incurred a net loss of $3.1 million in the quarter ended Dec. 31, 2013.
(Allendale County Bank report by Leasing News)

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:(

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:

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:

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:

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:

FDIC List of Bank Failures:
Leasing News Bank Beat:

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.