First Vietnamese American Bank lost over $1.1 million in the first half of 2010, according to FDIC

Go to http://www.fdic.gov/ click on “Bank Find” on the lower right menu. Click on “Institution Directory Home” on the top right of the page. Click on “Fall All Institutions” in the menu. You will be presented with a form. Enter “First Vietnamese American Bank” and click “Find”. You will see First Vietnamese American Bank listed. Select “All Summary Information” from the ID Report Selections drop down menu and “click generate report”.


What you will find is amazing. The bank opened for business in early 2005 to great fanfare. It is typical for a new bank to loose money in its first few years, but nothing like this. Here are its losses so far.

2005 $2.587 million
2006 $2.263 million
2007 $1.533 million
2008 $3.432 million
2009 $2.874 million
2010 $1.112 million in the first 6 months alone

As of June 30, 2010, First Vietnamese American Bank had less than $1.47 million in capital left. At the current loss rate of over half a million dollars per quarter, the bank will run out of capital before the end of this year.

As of March 31, 2010, 16.2% of First Vietnamese American Bank loans were not current. Its net interest margin (the difference between what it collects on loans and what it pays on interest) was down to 2.26%. Its equity capital to asset ratio was down to 3.77%.

As of June 30, 2010, First Vietnamese American Bank Tier 1 leverage ratio was down to 2.48%

According to http://en.wikipedia.org/wiki/Capital_requirement Depository institutions are subject to risk-based capital guidelines issued by the Board of Governors of the Federal Reserve System (FRB). These guidelines are used to evaluate capital adequacy based primarily on the perceived credit risk associated with balance sheet assets, as well as certain off-balance sheet exposures such as unfunded loan commitments, letters of credit, and derivatives and foreign exchange contracts. The risk-based capital guidelines are supplemented by a leverage ratio requirement. To be adequately capitalized under federal bank regulatory agency definitions, a bank holding company must have a Tier 1 capital ratio of at least 4%, a combined Tier 1 and Tier 2 capital ratio of at least 8%, and a leverage ratio of at least 4%, and not be subject to a directive, order, or written agreement to meet and maintain specific capital levels. To be well-capitalized under federal bank regulatory agency definitions, a bank holding company must have a Tier 1 capital ratio of at least 6%, a combined Tier 1 and Tier 2 capital ratio of at least 10%, and a leverage ratio of at least 5%, and not be subject to a directive, order, or written agreement to meet and maintain specific capital levels. These capital ratios are reported quarterly on the Call Report or Thrift Financial Report. The report is usually available about one month after the close of each quarter.
With an equity capital to asset ratio of 2.48% as of June 30, 2010 and a Tier 1 capital ratio of 3.08% as of down from 5.72% on December 31, 2009, it seems only a matter of a few more months before the bank will fail?