For Banks, More Trouble Just Around the Bend

Since nonperforming loans factor in the risk-based capital ratio, Westernbank was the closest on the list to slipping below the 10% required to be considered well-capitalized under regulatory guidelines.

On Dec. 2, W Holding Company conducted a reverse stock split, with a ratio of one share for every 50. This will prevent the stock's delisting on the New York Stock Exchange, which threatened to do just that after the company's shares sold for less than $1 for 30 consecutive days. The closing share price Tuesday after the split was $8.98, down from the open of $12.20.

Much more troubling is that the holding company has not filed a 10-Q or 10-K report since July 2007, when it reported first quarter 2007 results. In a Nov. 11 filing, the company announced it wouldn't be able to file its third quarter 10-Q report on time, and that financial statements from 2005, 2006 and 2007 could no longer "be relied upon" and would be restated. This all sprang from the company's June 2007 announcement of a "collateral deficiency" it discovered in one of its largest asset-backed loans, to the tune of $80 million.

W Holding Company declined to comment about any capital raising activity, as the company was in the midst of preparing its financial restatement. It expects to have the filing completed by year-end.

Fifth Third Bank of Grand Rapids

Fifth Third Bank of Grand Rapids, Mich. came in second on the list, with a ratio of nonperforming CRE and CCL to total assets of 2.15%. The bank, with $54 billion in total assets as of Sept. 30, and Fifth Third of Cincinnati, Ohio, with total assets of $67 billion, are the two main commercial bank charters held by Fifth Third Bancorp (FITB Quote).