This Day On The Street
Continue to site right-arrow
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

Ailing California Still Has Strong Banks

Stocks in this article: BAC JPM USB

California Banks and S&Ls Rated B+ or Higher (Millions of Dollars)
chart Ratings takes a conservative approach with bank ratings, and places the greatest weight on capital strength, credit quality and earnings stability.

Looking at the highest-rated California banks and thrifts, most had nonperforming asset ratios below 1%, and risk-based capital ratios greatly exceeding the 10% required for most institutions to be considered well-capitalized under regulatory guidelines.

The largest bank among the highest-rated in the state was Silicon Valley Bank of Santa Clara, a $10.7 billion subsidiary of SVB Financial Group (SIVB - Get Report).

Largest California Institutions

The following includes capital, earnings and asset-quality indicators for the 10 largest California banks and thrifts.

10 Largest California Banks and S&Ls (Millions of Dollars)

Two of the nation's largest holding companies have subsidiary banks in the state with portfolios comprising almost entirely of residential mortgages, including Bank of America California NA, held by Bank of America (BAC - Get Report), which has remained profitable through the crisis, and JPMorgan B&TC NA, held by JPMorgan Chase (JPM - Get Report), which was organized in August 2008 and has also remained profitable.

The biggest bank in the state with a weak rating is United Commercial Bank of San Francisco, a subsidiary of UCBH Holdings (UCBH).

United Commercial Bank was included in's list of undercapitalized banks and thrifts as of June 30, with a tier 1 leverage ratio of 4.02% and a risk-based capital ratio of 7.92%. Those ratios need to be 4% and 8% to be considered adequately capitalized under regulatory capital guidelines. Well-capitalized banks are at least 5% and 10%.

Even after charging off $426 million in soured loans during the second quarter, United Commercial's nonperforming-loan ratio still increased to 10.44% as of June 30, up from 8.28% in the previous quarter. The annualized ratio of net loan charge-offs was 20.39%, and the bank's ratio of loan-loss reserves to total loans was 4.37% -- far behind the pace of loan losses.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link 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

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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!


DOW 17,416.85 +225.48 1.31%
S&P 500 2,021.25 +19.09 0.95%
NASDAQ 4,683.4070 +45.4130 0.98%

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