All four of the states we have already surveyed for the fourth quarter had banks or thrifts included on TheStreet's Bank Watch List, that were undercapitalized under ordinary regulatory guidelines. Texas had none.
Texas Banks with Weakest Asset Quality
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 adequately capitalized 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 Texas institution with the highest nonperforming assets ratio as of Dec. 30 was Park Cities Bank of Dallas, which had $612 in total assets as of Dec. 30 and a crippling nonperforming assets ratio of 29.23%. The bank is operating under an April 2010 consent order from the FDIC and state regulators, agreeing to raise its total risk-based capital ratio to 13%, submit a strategic plan, and improve its credit administration and interest rate risk management.
Largest Texas BanksDeposit gathering in Texas is dominated by three of the "big four" U.S bank holding companies. JPMorgan Chase Bank NA -- the main subsidiary of JPMorgan Chase (JPM) -- has the leading deposit market share in Texas, with 18% of deposits in the state as of June 30, 2011, according to the most recent FDIC data. The bank's deposit market share grew from 16% a year earlier. Bank of America NA-- held by Bank of America (BAC) -- has a second-place market share in Texas, with 14% of deposits in the state as of June 30, with its share unchanged from a year earlier. After Tom Brown of Second Curve Capital said in December that he had suggested to Bank of America board of directors member Chad Gifford that the company consider selling part of its branch network -- with the company's Texas operations given as an example -- as a way of showing the market that the company's assets really were worth more than the fraction of book value the stock was trading for, the Wall Street Journal on Feb. 17 reported that the company might indeed consider a Texas sale if it were to come under severe stress.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV