2Q2009 Results Mean More Failures and Flat IT Spend

Analyst: Bill Bradway

September 3, 2009

The FDIC released its Quarterly Banking Profile for 2Q2009 on August 27th along with the FDIC Call Report data for all FDIC insured banks and thrifts. A total of 84 charters associated with a net of 74 banking entities (due to multiple charters per entity) have been closed in the first eight months. Since the end of 2Q2009, 30 bank entities (representing 39 charters) have been closed, lead by Colonial Bank and Guaranty Bank. The problem bank list expanded to 416, up from 305 in 1Q and 117 at 2Q2008.

he industry consolidation continues at a steady pace. Our analysis of the industry yields 7,112 commercial banks and thrifts at 2Q2009 (net of 135 non bank charters), down by 30 from 1Q2009 and 56 from 4Q2008. This analysis applies a universal Profit Score algorithm to all consolidated institutions.

• When will the industry’s woes will reach bottom and begin to recede?
• What does a more detailed analysis of the individual institutions reveal about the prospect of more failures?
• What will be the impact of the failure induced industry consolidation on bank IT spending?

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