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165 Banks On the Brink

NEW YORK ( TheStreet) -- With year-end data for 99% of the nation's savings and loan associations now available, there are 165 undercapitalized institutions on the TheStreet's Bank Watch List, which is 12 more than last quarter. This is despite 13 banks being shuttered by regulators since the final third-quarter watch list was published in November.

Based on fourth-quarter regulatory data supplied by HighlineFI for the nation's banks and savings and loan associations -- and factoring-in the 13 bank and thrift failures -- 155 institutions were undercapitalized at year-end, according to the regulatory guidelines that apply to most institutions.

Click the link below to see the full list:

It is important to note that any capital raised by institutions during the first quarter of 2012 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.

Two banks on the fourth-quarter watch list was actually negatively capitalized as of Dec. 30. These included New City Bank of Chicago, with whose Tier 1 leverage ratio fell to -2.38%, after the bank posted a fourth-quarter net loss of $5.2 million, and Home Savings of America, with a Tier 1 leverage ratio of -2.25%, following a fourth-quarter net loss of $7.0 million.

The largest thrift joining the watch list is the privately held Liberty Bank, FSB, of West Des Moines, Iowa, which had $934 million in total assets as of Dec. 30. The institution has been significantly undercapitalized for a year now, after a fourth-quarter 2010 net loss of $109.2 million brought it's Tier 1 leverage ratio below 3.00%. The Office of Thrift Supervision in July of 2011 ordered Liberty Bank, FSB to bring its Tier 1 leverage ratio up to 9.00% and its total risk-based capital ratio to 12.00%, by Sept. 30, 2011. These ratios were 2.30% and 4.76%, respectively, as of Dec. 30.
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