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TheStreet Open House

Undercapitalized Bank List Still Growing

A previous version of this story incorrectly included the ticker of California Bank of Commerce.

NEW YORK ( TheStreet) -- Despite the signs of economic improvement, the pace of bank failures is likely to accelerate as the shakeout continues among community lenders with capital shortfalls.

Based on preliminary first-quarter regulatory data supplied by SNL Financial for roughly 92% of the nation's 7,300 banks and savings and loan associations, 156 were "undercapitalized," according to the regulatory guidelines that apply to most institutions. Clink the link below to see the full list.

>>>Bank Watch List

That number is down slightly from 163 undercapitalized banks and thrifts on a similar list published by TheStreet.com on Feb. 24; however, 40 of the institutions on the previous list have already failed.

More undercapitalized banks are likely to be identified when the full set of first-quarter regulatory data becomes available.

There have been 64 bank failures so far during 2010, more than double the number for the same period last year. In addition to all the institutions that are short of capital, the Federal Deposit Insurance Corp.'s "problem bank list" has continued to grow.

Most banks and thrifts need to maintain Tier 1 leverage, Tier 1 risk-based and total risk-based capital ratios of at least 5%, 6% and 10% respectively to be considered "well-capitalized" under regulatory guidelines. Some trust banks carry lower capital requirements. The ratios need to be at least 4%, 4% and 8% respectively for most to be considered "adequately capitalized".

Here's the entire list of undercapitalized banks, based on preliminary March 31 regulatory filings. The list is likely to grow once a complete set of data for the industry becomes available. Please note the list doesn't reflect any capital raised by bank institutions during the second quarter of 2010. The list is sorted by state, and then by asset size.

Publicly-traded holding companies with multiple undercapitalized bank subsidiaries include Bank of Florida Corp. (BOFL) of Naples, with three subsidiaries, and Capitol Bancorp (CBC) of Lansing, Mich, which holds Pisgah Community Bank of Ashville, N.C., Michigan Commerce Bank of Ann Arbor, Sunrise Bank of Arizona, of Phoenix, and Central Arizona Bank of Casa Grande.

Bank of Florida Corp. announced a first-quarter loss of $33.1 million on Monday, and said it needs to raise $65 million in new capital in order for all three of its subsidiaries to become adequately capitalized. The holding company is currently engaged in a rights offering that seeks to raise nearly $72 million.

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