SOURCE: Highline Financial

Highline Financial

September 24, 2010 08:05 ET

Highline Financial Quarterly Banking Sector Watch List Remains Consistent Through Q2

259 Financial Institutions With Combined Assets of $125 Billion at Extreme Risk of Failure

NEW YORK, NY and AUSTIN, TX--(Marketwire - September 24, 2010) -  Highline Financial, the preferred source for banking information and analytics for the financial sector, released its Quarterly Banking Sector Watch List based on the Highline Rating. As of June 30, 2010, the Highline Financial Watch List included 744 institutions with combined total assets of $468 billion. Of the 744, 259 institutions with combined assets of $125 billion are at an extreme risk of failure.

The Highline Watch List includes institutions with a Highline Peer Rating below 10 for three consecutive quarters and the Extreme List includes institutions with a Highline Peer Rating equal to 0 for three consecutive quarters. 

Between March and June of this year, 61 institutions came off the Highline Extreme List, including 34 that failed, 4 that were acquired and 23 with an improved Highline rating. Meanwhile, 49 new institutions were added to the Extreme List after nearly doubling bad loans over the past year which resulted in a deterioration of Asset Quality by a weighted average of 97.7%.

According to Highline Financial, the number of US bank and savings & loan failures in 2010 are set to surpass the totals for 2009. In 2009, there were 139 failures with combined assets totaling $169 billion. Through September 21, there have been 125 bank failures with combined assets of $82.5 billion. 

Institutions at Extreme Risk of Failure by Asset Size

    Q2 2010
 > $10B   1
 $1-10B   17
 $250M - $1B   63
 < $250M   178
 TOTAL   259

Highline Financial rates every bank, S&L, credit union and consolidated bank holding company on a quarterly basis. The Highline Rating is based on a scale from 0 - 99 with 0 being the lowest and 99 being the highest. Highline rates over 8,000 commercial banks, savings banks and savings & loans as well as over 7,500 credit unions and 1,300 bank holding companies.

Terry Waters, Highline Financial CEO, said, "The Highline Rating continues to offer the market and our clients the strongest predicator of a financial institution's health and potential for failure. 92% of institutions that failed this year had a Highline Rating of 0 for the quarter prior to failure."

The Highline Rating compares institutions on a national, regional basis and by asset size. The top performing states, measured by the fewest bank failures, continued to be dominated by Nebraska, Massachusetts, Rhode Island and Vermont. Banks in Rhode Island have the best asset quality this quarter, while Nebraska banks are the most profitable so far this year. Florida, Illinois, Georgia and California continued to top the list of states with the most bank failures this year with 23, 15, 14 and 10 failures respectively.

Best Performing Institutions by Top Four States:

Nebraska High Performers:

  • Chambers State Bank -- Chambers, NE
  • First National Bank of Omaha -- Omaha, NE
  • Bank of Lewellen -- Lewellen, NE

Massachusetts High Performers:

  • DanversBank -- Beverly, MA
  • Athol Savings Bank -- Athol, MA
  • Easthampton Savings Bank -- Easthampton, MA

Rhode Island High Performers:

  • BankNewport -- Newport, RI
  • Independence Bank -- East Greenwich, RI

Vermont High Performers:

  • Union Bank -- Morrisville, VT
  • Northfield Savings Bank -- Northfield, VT

Top Five Well-Performing Banks with Total Assets > $10 Billion*

  • First National Bank of Omaha -- Omaha, NE, Highline Peer Group Rating = 82
  • First Hawaiian Bank -- Honolulu, HI, Highline Peer Group Rating = 79
  • First-Citizens Bank & Trust Company -- Raleigh, NC, Highline Peer Group Rating = 67
  • Commerce Bank, NA -- Kansas City, MO, Highline Peer Group Rating = 64
  • Bank of Hawaii, Honolulu, HI, Highline Peer Group Rating = 62

* This only includes banks with Loans/Assets > 40%, Credit card loans/Loans < 50% and Number of branches > 5

About Highline Financial Ratings
The Highline Rating has been used for rating banks, S&Ls, credit unions and bank holding companies since 1985. Originally developed by Sheshunoff Information Services, it was first known as the Sheshunoff Rating. Over the last 25 years, the Highline Rating has undergone periodic evaluations and improvements to ensure its effectiveness as a strong predictor of a financial institution's health and potential for failure.

The Highline Rating is calculated on a quarterly basis using four key ratios (capital adequacy, asset quality, earnings strength and liquidity) and encompasses both current and historical data. In addition, all ratings assess an institution's health using weighted criteria to evaluate the industry's condition as a whole, with ratios and respective weights adjusting to meet industry changes. Used by government entities, leading investment banks, law firms, advisories and other financial institutions, the Highline Rating enables companies to manage financial risk and make profitable investment decisions on a daily basis.

About Highline Financial
Highline Financial is the preferred source of banking information and tools with decades of experience serving the financial industry. Our mission is to deliver the highest quality and most relevant banking data and analytics solutions that enable our clients to manage financial risks and make profitable investment decisions every day, at a lower cost of ownership. We do this by combining our focused industry expertise in banking with best of breed industry partnerships to fulfill the real-time strategic needs of executives, business leaders and analysts in financial institutions, corporations and public sector agencies. For more information visit

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