Banks Most in Need of a Rescue

You can find more stories like this in our On the Brink series.

Many of the nation's largest banks could have really used that bailout Monday.

After the House of Representatives voted down the bill, sparking a 778-point drop in the Dow Jones Industrial Average, lawmakers adjourned until Thursday, leaving the $700 billion rescue plan in limbo.

Of course, it was almost impossible to predict what immediate effect the bill would have had if it had been passed, since the initial funding would have been only $250 billion, and the Treasury Department's purchase program left so many questions unanswered.

Community bankers wondered if Treasury would be purchasing any nonperforming construction loans. Banks large and small, domestic and foreign, were wondering how they would get in line to sell assets to the Treasury.

Then again, any steps to remove distressed assets from bank balance sheets or boost the market value of mortgage-backed securities, would free up some capital.

A list of the 20 largest banks with the highest nonperforming assets ratios offers a telling scorecard of which ones needed the bailout the most.

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Out of the 20 banks and S&Ls on the list, 10 are (or were) federally-chartered thrifts supervised by the Office of Thrift Supervision. Washington Mutual Bank, of Henderson, Nev., was by far the largest charter supervised by the OTS, with $307 billion in total assets, or approximately 20% of assets under the agency's supervision. It was closed down on Sept. 25 and sold to JPMorgan Chase (JPM). The next largest OTS shop is Countrywide Bank FSB, which Bank of America (BAC) continues to operate as a separate entity.