Weiss Ratings: Legacy Bank Identified as “Weak” by Weiss in June 2008 Bank Failures Hit 25 as Regulators Close Two More Institutions

JUPITER, Florida (March 14, 2011) — On Friday, regulators closed two banks: Legacy Bank, Milwaukee, Wisconsin and First National Bank of Davis, Davis, Oklahoma. This brings the total number of U.S. bank and thrift failures to 25 for 2011, behind last year’s pace of 30.

Legacy Bank, Milwaukee, Wisconsin, with assets of $205.4 million at September 30, 2010 had been rated E- (“Very Weak”) for the last two quarters by Weiss Ratings and was first identified as “Weak” in June 2008 based on first quarter 2008 data. It reported a loss of more than $6.4 million through September 30, 2010. Legacy Bank had below-FDIC-mandated Tier 1 (5%) and Risk-Based Capital (6%) ratios of 2.20% and 4.30%, respectively. Nonperforming loans represented almost 23% of its loan portfolio. Seaway Bank and Trust Company of Chicago, Illinois, with assets of $411.9 million and a Weiss Rating of D+ (“Weak”) will assume the deposits of Legacy Bank.

First National Bank of Davis, Davis, Oklahoma, south of Oklahoma City, with assets of $86.6 million at September 30, 2010 was rated C (“Fair”) by Weiss Ratings when it failed. It had been rated “Weak” as early as June 2008 but was upgraded to C- (“Fair”) based on second-quarter 2009 results and then to C (“Fair”) based on third-quarter 2010 results, due primarily to improved profitability. However, by September 30, 2010, its liquidity had deteriorated to a dangerously low 5.7% compared to an industry average of 31.5%. It reported a profit of $948,000 through September 30, 2010. First National had above-FDIC-mandated Tier 1 (5%) and Risk-Based Capital (6%) ratios of 8.05% and 14.24%, respectively. Nonperforming loans to core capital made up almost 10% of its loan portfolio. The Pauls Valley National Bank of Pauls Valley, Oklahoma, with assets of $165 million and a Weiss Rating of B+ (“Good”) will assume the deposits of First National Bank of Davis.

Weiss Ratings, the nation’s independent provider of bank, credit union and insurance company financial strength ratings, accepts no payments for its ratings from rated institutions. It also distributes independent investment ratings on the shares of thousands of publicly traded companies, mutual funds, closed-end funds and ETFs.

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