Illinois Tops Undercapitalized Bank List
States that have already taken the brunt of the pain due to the rash of bank failures since the beginning of 2008 look to have more trouble on the horizon.
Based on early regulatory data for 96% of the nation's approximately 8,500 banks, Illinois, Georgia and California have more than half of the 78 institutions considered undercapitalized by regulatory capital guidelines as of March 31. Georgia leads all states with 11 bank and thrift failures since the start of 2008, followed by California with nine and Illinois, tied with Florida and Nevada with four.
In comparison, 60 banks and thrifts reported being undercapitalized per ordinary regulatory guidelines as of Dec. 31. Since 22 of those institutions have failed so far, it's clear that being undercapitalized is a good indicator of an institution's risk of failure.
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