This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Undercapitalized Thrifts Join Growing List

This column originally posted on RealMoney.com on Thursday, Feb. 19. For more information about subscribing to RealMoney , please click here.

Nine of the nation's 804 savings & loan associations were undercapitalized per regulatory guidelines as of Dec. 31, according to preliminary data reviewed by TheStreet.com Ratings.

Combined with an updated list of 40 banks considered undercapitalized by regulatory standards, also based on preliminary data, several of this group of financial institutions have already joined the growing legions of bank failures. Thirty-eight banks and thrifts have failed since the beginning of 2008.

Suburban Federal Savings of Crofton, Md., which was shut down by the Office of Thrift Supervision on Jan. 30, was one of the nine undercapitalized savings & loans.

The table below lists the eight remaining thrifts that were undercapitalized as of Dec. 31, according to the preliminary data supplied by Highline Financial:

Undercapitalized S&Ls - Dec. 30, 2008 - Preliminary Data ($millions)
Highline Financial, Inc

Please keep the following in mind for this table and for our updated list of undercapitalized banks below:

  • The lists are based on preliminary data: S&Ls have filed their thrift financial reports with the OTS and banks have filed their call reports with the Federal Deposit Insurance Corp., which our data provider, Highline Financial, obtains from the agencies. The data was not yet finalized when we downloaded it on Feb. 17. This data is often updated before it is finalized.
  • The data is for the S&Ls and banks themselves, not holding companies.
  • An S&L or bank on the list may have raised capital since Dec. 31: Most institutions with capital concerns are trying very hard to raise capital any way they can. Some on the list may have raised significant capital privately since filing their Dec. 31 call reports. If your S&L or bank is on either of these lists, you should determine if you have any deposits that exceed the FDIC's insurance limits and consider discussing the situation with the institution.

Leading the list was IndyMac Federal Bank FSB, the successor institution which was run by the FDIC since IndyMac failed in July. The FDIC reached an agreement in January to sell the institution to a partnership including J. Christopher Flowers, George Soros and Dell (DELL) CEO Michael Dell. The partnership was to put up $1.3 billion in capital toward the purchase, with the FDIC standing behind some of the remaining IndyMac loans with a loss-sharing agreement.

Another S&L on the list with negative capital ratios was American Sterling Bank of Sugar Creek, Mo. The institution reported net losses of $18 million for 2008 from writedowns of available-for-sale loans in the third quarter and provisions for mortgage loan losses.

CEO John Kopecky, who joined American Sterling in August, explained that while the thrift's majority shareholder infused $20.5 million in new capital early in the third quarter, the institution was forced to record $12.9 million in writedowns of loans it had expected to sell to Countrywide Bank, before Countrywide was acquired by Bank of America (BAC - Get Report) in July.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
BAC $15.31 -0.71%
BBX $18.48 1.04%
AAPL $123.25 -0.80%
FB $83.30 0.35%
GOOG $548.34 -1.23%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs