Next was Harris NA, held by Bank of Montreal (BMO - Get Report). It maintained its C-minus (fair) rating after posting a second-quarter loss of $44 million. After charging-off $248 million in problem loans in the fourth quarter, nonperforming loans crept up during the first and second quarters, leaving Harris with a nonperforming-assets ratio of 1.62% as of June 30. Loan-loss reserves covered 2.65% of total loans, well ahead of the 1.75% annualized ratio of net charge-offs to total loans for the second quarter.
The bank with the weakest asset quality among the 10 biggest in the state was Amcore Bank NA, a subsidiary of Amcore Financial (AMFI). Amcore was in serious trouble, with an 8.98% nonperforming-assets ratio and a total risk-based capital of 8.78% as of June 30. In late June, the bank agreed with the Federal Reserve and the Office of the Comptroller of the Currency to achieve and maintain a total risk-based capital ratio of 12% by Sept. 30.
Amcore is scheduled to release third-quarter results Oct. 27. While the company announced the sale of four branches in August, it has remained silent about compliance with its regulatory capital requirement.