165 Banks On the Brink
Philip van Doorn
NEW YORK (TheStreet) — With year-end data for 99% of the nation’s savings and loan associations now available, there are 165 undercapitalized institutions on the TheStreet’s Bank Watch List, which is 12 more than last quarter. This is despite 13 banks being shuttered by regulators since the final third-quarter watch list was published in November.
Based on fourth-quarter regulatory data supplied by HighlineFI for the nation’s banks and savings and loan associations — and factoring-in the 13 Bank And Thrift Failures – 155 institutions were Undercapitalized at year-end, according to the regulatory guidelines that apply to most institutions.
Click the link below to see the full 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.
Two banks on the fourth-quarter watch list was actually negatively capitalized as of Dec. 30. These included New City Bankof Chicago, with whose Tier 1 leverage ratio fell to -2.38%, after the bank posted a fourth-quarter net loss of $5.2 million, and Home Savings of America, with a Tier 1 leverage ratio of -2.25%, following a fourth-quarter net loss of $7.0 million.
The largest thrift joining the watch list is the privately held Liberty Bank, FSB, of West Des Moines, Iowa, which had $934 million in total assets as of Dec. 30. The institution has been significantly undercapitalized for a year now, after a fourth-quarter 2010 net loss of $109.2 million brought it’s Tier 1 leverage ratio below 3.00%. The Office of Thrift Supervision in July of 2011 ordered Liberty Bank, FSB to bring its Tier 1 leverage ratio up to 9.00% and its total risk-based capital ratio to 12.00%, by Sept. 30, 2011. These ratios were 2.30% and 4.76%, respectively, as of Dec. 30.
U.S. Century Bank of Doral, Fla., remians the largest institution on the 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 of 2011. 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.
The second-largest undercapitalized bank on the fourth-quarter watch list is First Mariner Bank of Baltimore, which had $1.2 billion in total assets as of Dec. 31, and is a subsidiary of First Mariner Bancorp (FMAR).
The holding company last April entered into an agreement with Priam Capital Fund I LP for an investment of $36.4 million, as part of the company’s plan to raise $160 million in new capital. Priam’s investment was contingent upon First Mariner lining up the remaining $123.6 million in capital, and the Nov. 30 deadline quietly passed without the deal being consummated.
Next is Citizens First National Bank of Princeton, Ill., which had $1.0 billion in total assets as of Dec. 31, and slipped to undercapitalized during the fourth quarter, when a $15.2 million net loss left the bank with a Tier 1 leverage ratio below 4.00%.
The bank is held by Princeton National Bancorp (PNBC), and on Sept 20 entered into a consent order with the Office of the Comptroller of the Currency, agreeing to improve its credit administration, implement monthly liquidity reviews, submit a three-year strategic plan, and within 90 days bring its Tier 1 leverage ratio up to 8.00% and its total risk-based capital ratio up to 12%.
The holding company in October entered into an agreement with the Federal Reserve bank of Chicago, agreeing to act as a source of strength to the bank, submit a capital plan to the Fed.
The holding company hasn’t yet announced its fourth-quarter results.
Capitol Bancorp (CBCR) of Lansing, Mich., had nine undercapitalized bank subsidiaries as of Sept. 30, including Central Arizona Bank of Casa Grande, Sunrise Bank of Arizona of Phoenix, Bank of Las Vegas, 1st Commerce Bank of North Las Vegas, Nev., Sunrise Bank of Valdosta, Ga., First Carolina State Bank of Rocky Mount, N.C., Pisgah Community Bank of Asheville, N.C., Sunrise Bank of Albuquerque N.M., and Michigan Commerce Bank of Ann Arbor.
The holding company had 64 separately-charted bank subsidiaries in 17 states at the end of 2009, and reduced the number of subsidiaries to 19 as of Sept. 30, through sales of some subsidiary banks and mergers of others.
Capitol Bancorp hasn’t yet reported its fourth-quarter results.
Thorough Bank Failure Coverage
A total of nine 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:
The bank failure map is color-coded, with the states having the greatest number of failures highlighted in dark gray, and states with no failures in light green. By moving your mouse over a state you can see its combined 2008-2012 totals. Clicking on a state opens a detailed map pinpointing the locations and providing additional information for each bank failure.
– Written by Philip van Doorn in Jupiter, Fla.