More Banks on the Capital Brink

NEW YORK (TheStreet) -- Fourth-quarter data for the nation's banks and thrifts shows that the number of troubled institutions is still increasing.

Based on preliminary fourth-quarter regulatory data supplied by SNL Financial for roughly 90% of the nation's 7,700 banks and savings and loan associations, 160 were undercapitalized according to the regulatory guidelines that apply to most institutions.

Click the link below to see the full list:

>>>Bank Watch List

The number of undercapitalized institutions increased from last quarter, even though 28 banks have failed since the second-quarter list was pulled on November 4. The fourth-quarter list is also likely to grow once the remaining regulatory data becomes available.

It is important to note that any capital raised by institutions during the first quarter of 2011 will not be reflected on the Watch List.

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% 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% for most to be considered adequately capitalized.

Three of the banks on the Watch List were actually negatively-capitalized as of December 31. The largest of these was First Choice Community Bank of Dallas, Ga., which had $308 million in total assets as of December 31. After reporting a fourth-quarter net loss of $20.9 million, the bank was left with a Tier 1 capital ratio of -2.37%. The bank's ratio of nonperforming assets - including loans past due more than 90 days or in nonaccrual status (less government-guaranteed balances) and repossessed real estate - to total assets was 26.87%.

The three largest banks on the Watch List last quarter have sufficiently improved their capital ratios to be excluded from the third-quarter list:

For Superior Bank of Birmingham, Ala. -- which was the largest institution on last quarter's Watch List - fourth quarter data isn't yet available. The parent company Superior Bancorp (SUPR) announced in November that the bank had filed a $58 million claim with the Gulf Coast Claims Facility for "additional stresses on our Gulf Coast loan portfolio" resulting from the Deepwater Horizon oil spill.

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