Unofficial Problem Bank list at 997 Institutions

Note: this is an unofficial list of Problem Banks compiled only from public sources. Here is the unofficial problem bank list for June 3, 2011. (new format)Changes and comments from surferdude808: It was a quiet week for the Unofficial Problem Bank List as there was only one removal and one addition. Thus, the institution count remains unchanged at 997 but assets increased by $1.3 billion to $416.7 billion.The removal was the failed Atlantic Bank and Trust, Charleston, SC ($208 million) and the addition was Tennessee Commerce Bank, Franklin, TN ($1.5 billion Ticker: TNCC).Given the quiet week, it gives us a chance to circle back to comments we made on March 25th and retraction on April 1st. We originally published commentary on how the FDIC has not enforced cross-guaranty against Capital Bancorp when one of their subsidiaries failed. Subsequently, we issued a retraction and apology on April 1st based on a message sent by Angela Kimber, Director of Communications, Capitol Bancorp Limited, that said the comments were inaccurate as "...none of Capitol Bancorp's subsidiaries have failed."Well, it feels like we were punked by Angela Kimber, as a bank controlled by Capitol Bancorp -- Commerce Bank of Southwest Florida, Fort Myers, FL -- failed on November 20, 2009 costing the FDIC an estimated $23.6 million, whose cost has been subsequently been raised to $30.6 million (See FDIC Press Release).The FDIC has issued at least 12 cross guaranty waivers to facilitate sales of Capitol Bancorp affiliates as part of its recapitalization efforts. The latest waiver was issued to a Capital Bancorp affiliate in North Carolina -- Community Bank of Rowan, Salisbury, NC (See from FDIC). Within this waiver, the FDIC states: " WHEREAS, on November 20, 2009, Commerce Bank of Southwest Florida, Fort Myers, Florida (Commerce) failed and caused a loss to the Federal Deposit Insurance Corporation (FDIC); and WHEREAS, at the time of its failure, Commerce was controlled by Capitol Bancorp, Ltd., Lansing, Michigan, a bank holding company (BHC)."Over the past few weeks, CR has sent several email requests and phone messages to Angela Kimber requesting clarification on the cross-guaranty waivers and the basis for the retraction request (subsidiary versus control). CR also asked for a list of all Prompt Corrective Actions for banks controlled by Capitol. All CR received two weeks ago from Ms. Kimber was a list of PCAs, a web link to Capitol Bancorp's affiliates and their history. Ms. Kimber wrote that the banks with Prompt Corrective Actions are Bank of Las Vegas, Central Arizona Bank, Michigan Commerce Bank and Sunrise Bank of Arizona. However this is non-responsive on the issue of subsidiary versus control.Although no clarification was received, it appears the argument put forth by Capitol Bancorp that none of its subsidiaries has failed is highly technical and is essentially nothing more than hair splitting. In short, the ownership threshold to be a "subsidiary" requiring financial consolidation is typically 50 percent. Hence, Capitol Bancorp likely owned less than 50 percent of Commerce Bank of Southwest Florida, but it owned a sufficient share or exercised sufficient management influence to meet the "commonly controlled" definition in the cross-guarantee powers in the FDIC Act. The cross-guarantee provisions would allow the FDIC to assess Capitol Bancorp for the $30.6 million resolution cost. The main thrust of the March 25th comments were that the FDIC has pursued a strategy to let Capitol Bancorp sell certain banks in the hope of avoiding a larger and perhaps more costly failure event and that this strategy could be imperiled by the recent Prompt Corrective Action orders issued against several banks controlled by Capitol Bancorp.Thus, we withdraw our retraction and stand by the thrust of our comments as originally published on March 25th. Perhaps Ms. Kimber forgot to add April Fools to her retraction request.Yesterday ...• May Employment Report: 54,000 Jobs, 9.1% Unemployment Rate• Employment Summary, Part Time Workers, and Unemployed over 26 Weeks• Birth/Death Model and Unemployment by Duration and Education• Employment graph gallery