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More Than 100 U.S. Banks Lack Capital

Four other banks had negative capital ratios according to preliminary regulatory reports for the second quarter. After Corus, which had $7 billion in total assets, the largest of these was Mainstreet Bank of Forest Lake, Minn., with $459 million.

Undercapitalized Banks and Thrifts

The list of undercapitalized banks is based on preliminary data that's subject to revision. Banks or S&Ls might have raised capital since June. The list also excludes banks and thrifts whose capital ratios meet government standards but are considered undercapitalized because regulators are requiring them to hold additional money.

The list is sorted by state in ascending order by tier 1 leverage ratio:

Undercapitalized Banks and S&Ls - 6/30/09 - Preliminary Regulatory Data ($Mil)
Undercapitalized Banks table
Source: SNL Financial Inc.

Georgia leads the U.S. with 21 banks and thrifts fail since the beginning of 2008. Behind it are Illinois with 14 failures, California with 13, Florida with six and Nevada with four.

Large bank holding companies such as SunTrust Banks (STI - Get Report), Fifth Third Bancorp (FITB - Get Report) and U.S. Bancorp (USB) have been buying failed institutions for the past 18 months. JPMorgan Chase (JPM - Get Report) acquired Washington Mutual, the largest-ever bank or thrift to fail in the U.S.

Free Financial Strength Ratings for Banks, Thrifts Ratings issues independent and very conservative financial strength ratings on each of the nation's 8,500 banks and savings and loans which are available at no charge on the Banks & Thrifts Screener.

In addition, the Financial Strength Ratings for 4,000 life, health, annuity, and property/casualty insurers are available on the Insurers & HMOs Screener. The writer owns shares in Riverside Banking Co., the holding company for Riverside National Bank of Florida, of Fort Pierce, a former employer.

-- Reported by Philip van Doorn in Jupiter, Fla.
Philip W. van Doorn joined Ratings., Inc., in February 2007. He is the senior analyst responsible for assigning financial strength ratings to banks and savings and loan institutions. He also comments on industry and regulatory trends. Mr. van Doorn has fifteen years experience, having served as a loan operations officer at Riverside National Bank in Fort Pierce, Florida, and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a Bachelor of Science in business administration from Long Island University.
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