Bank Watch List Grows: 155 Banks On The Brink (Update 2)
By Philip van Doorn - 02/07/12 - 4:26 PM ESTTheStreet) -- There are now 155 undercapitalized institutions on the TheStreet's Bank Watch List, which is two more than last quarter, despite 11 banks being shuttered by regulators in the meantime. Based on a set of preliminary fourth-quarter regulatory data supplied by HighlineFI for the nation's banks and savings and loan associations -- and factoring-in the 11 bank and thrift failures since TheStreet's final third-quarter Watch List was published on Nov. 16 -- 155 institutions were undercapitalized at year-end, according to the regulatory guidelines that apply to most institutions. Fourth-quarter data is now available for roughly 90% of U.S. banks and thrifts. Click the link below to see the full list: >>>Bank Watch List It is important to note that any capital raised by institutions during the first quarter of 2012 will not be reflected on the Watch List. Most banks and thrifts need to maintain Tier 1 leverage, Tier 1 risk-based and total risk-based capital ratios of at least 5%, 6% and 10% to be considered well-capitalized under regulatory guidelines. Some trust banks carry lower capital requirements. The ratios need to be at least 4%, 4% and 8% for most to be considered adequately capitalized. One banks on the preliminary fourth-quarter watch list was actually negatively capitalized as of Dec. 30. New City Bank of Chicago's Tier 1 leverage ratio fell to -2.38%, after the bank posted a fourth-quarter net loss of $5.2 million. U.S. Century Bank of Doral, Fla., is the largest institution on the preliminary fourth-quarter watch list, with $1.3 billion in total assets as of Dec. 30. The bank slipped from well capitalized to adequately capitalized in the fourth quarter of 2010, when it posted a $52 million net loss, as it set aside reserves, mainly for nonperforming commercial real estate and development loans, and saw its total risk-based capital ratio fall below 10.00%. The bank slipped to undercapitalized in the third quarter. Total losses for 2011 were $79 million, and the bank's nonperforming assets ratio was a very high 21.58% as of Dec. 30, according to HighlineFI. U.S. Century Bank in June of last year entered into a consent order with state regulators and the Federal Deposit Insurance Corp., agreeing to improve board of directors supervision of the institution, hire qualified new senior officers achieve a Tier 1 leverage ratio of 8% and a total risk-based capital ratio of 12% within 120 days of the order.
Thorough Bank Failure CoverageA total of seven institutions have been shuttered by regulators this year, following 92 failures in 2011. During the current wave of failures that began in 2008, there have been 421 banks and thrifts closed by regulators, with Georgia in the lead with 75 bank closures; followed by Florida, with 60 failures; Illinois, with 47; and California, with 38 failed banks and thrifts. All bank and thrift failures since the beginning of 2008 are detailed in TheStreet's interactive bank failure map: >>>Click here for the Bank Failure Map
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