With so many banks in Illinois, there are bound to be more than a few feeling the pinch as checking accounts become less and less profitable.
Of course, the banks with the greatest incentive to merge with stronger institutions are the ones still reeling from credit losses.
According to data provided by HighlineFI, there were 19 undercapitalized Illinois banks and thrifts as of Dec. 30 -- which were included on
Bank Watch List
-- not including
Charter National Bank and Trust of Hoffman Estates
, which was shuttered by the Office of the Comptroller of the Currency on Feb. 10, and sold by the Federal Deposit Insurance Corp. to
Barrington Bank & Trust Company, NA
of Barrington, Ill., which is a subsidiary of
of Lake Forest, Ill.
Since the Watch List is based solely on capital ratios, we take a different approach on our quarterly coverage of banks in key states, by looking at overall credit quality to identify troubled institutions.
Illinois Banks with Weakest Asset Quality
The following list includes all banks in the state with nonperforming assets comprising more than 15% of total assets as of Dec 30:
Nonperforming assets (NPA) include nonaccrual loans, loans past due 90 days or more and repossessed assets. Government-guaranteed loan balances are excluded. The ratio of net charge-offs to average loans is annualized.
The total risk-based capital ratios needs to be at least 8% for most institutions to be considered
by regulators and 10% for most to be considered well-capitalized. Most of the undercapitalized banks on the above list are operating under regulatory orders to achieve and maintain total risk-based capital ratios higher than 10%.
The list also includes financial strength ratings provided by Weiss Ratings. Weiss Ratings uses a very conservative ratings model, placing the greatest weight on capital strength, credit quality and earnings stability to assign ratings ranging from A-plus (Excellent) to E-minus (Very Weak).
The Illinois institution with the highest level of nonperforming assets as of Dec. 30 was
American Metro Bank
of Chicago, which had roughly $86 million in total assets, with nearly 31% NPA, and was undercapitalized, with a total risk-based capital ratio of 6.77%.