Bank Deals Blog: Bank Health

Kansas state regulators closed Almena State Bank late Friday, October 23. This is the fourth bank to fail in 2020, and it’s the third bank to fail since the COVID-19 pandemic began in March. Like the first and second bank that failed during the pandemic, Almena State Bank had major problems long before this year. According to the FDIC press release:

Even though the pandemic may not be to blame for this bank’s failure, it should be noted that this failure occurred only one week after the previous bank failure (the...

Last Friday Ally Financial released its third quarter earnings report, and Q3 profits were strong and far exceeded analysts’ estimates. A few details from Ally’s earnings report may interest Ally Bank deposit customers. First, if you have a lot of your savings at Ally Bank, the Q3 earnings report indicates a financially healthy bank. According to this American Banker article on Ally:

Auto loans contributed to large gains in both revenue and profit. Compared to Q3 2019, adjusted total net revenue was up 4%, and adjusted earnings per share was up...

Florida state regulators closed First City Bank of Florida late Friday, October 16. This is the third bank to fail in 2020, and it’s the second bank to fail since the COVID-19 pandemic began in March. Like the first bank that failed during the pandemic, First City Bank of Florida had major problems long before this year. According to the FDIC press release:

The pandemic will likely result in a large increase in loan defaults and other conditions that will stress banks. Help from the Federal Reserve, the Treasury, the FDIC...

We have finished updating our financial health grades based on the first quarter call report data that the FDIC and NCUA released. In the past, these updates have been done about six weeks earlier. One thing that delayed the update was that both the FDIC and NCUA delayed their release by about a month due to the COVID-19 pandemic. In normal times, the FDIC and NCUA release the Q1 call reports in late May. We had an additional delay due to technical issues involving the importing of the call reports...

The economic impact of the COVID-19 pandemic has just begun. Loan delinquencies and defaults will surely increase due to the forced business shutdowns. The Fed, Congress and the White House have provided significant support which should help, but there still remains uncertainty about how the economy and the financial system will fare. As we learned from the 2008 financial crisis, when the financial system is under stress, bank failures rise dramatically.

Health Ratings Based on Latest FDIC and NCUA Call Reports

DepositAccounts.com Bank Health Ratings page

Banks that are most likely to...

The stress on the financial system from the COVID-19 pandemic has just started. The Federal Reserve and the U.S. Government have begun massive new programs to support the economy and the financial system, and hopefully, that will prevent a wave of bankruptcies and bank failures. Nevertheless, as we saw after the 2008 Financial Crisis, these programs and policies can only do so much. A large number of banks still failed after the 2008 Financial Crisis. For savers, a much worse outcome than a bank failure is finding out that your...

West Virginia state regulators closed The First State Bank this Friday, April 3rd. This is the second bank to fail in 2020, and it’s the first bank to fail in the coronavirus crisis. Even though this bank failed in the coronavirus crisis, it had major financial problems long before the pandemic started. Based on the 2019 Q4 bank call reports from the FDIC (the latest available), this bank had the highest Texas Ratio of any bank in the nation (1,050%). Any bank with a Texas Ratio greater than 100% is...

The Coronavirus Aid, Relief, and Economic Security (CARES) Act that unanimously passed the Senate has a few little-known provisions that will likely be of interest to savers. The well-known provisions have been discussed at length by the media. These include the $1,200 tax rebates to most individuals, expanded unemployment benefits, billions of dollars for state and local governments and hospitals, and billions of dollars in loans for small and large businesses. The total cost of this package is close to $2 trillion. The bill is expected to pass the House...

It was apparent last Sunday when the Fed held an emergency FOMC meeting and announced drastic policy actions, the COVID-19 (coronavirus) pandemic has the potential of seriously impacting the financial system. Also, as we learned from the 2008 financial crisis, when the financial system is under stress, bank failures rise dramatically. Thus, it’s reasonable that savers would be concerned about the safety of their deposits. To help ease those concerns, the FDIC published this March 18th press release for bank customers, and the NCUA published a similar March 19th press...

Nebraska state regulators closed Ericson State Bank on Friday, February 14th. This is the first bank to fail in 2020. Four banks failed in 2019, and no banks failed in 2018. Bank failures have been rare in the last few years. The number of bank failures spiked during and soon after the last financial crisis, rising from 25 in 2008 to 140 in 2009, and peaking at 157 in 2010.

According to this FDIC press release, “Ericson State Bank had approximately $100.9 million in total assets and $95.2 million in...