155 Undercapitalized Banks Still Litter U.S.

NEW YORK (TheStreet) -- With year-end data for all of the nation's banks and savings and loan associations now available, there are 155 undercapitalized institutions on the TheStreet's Bank Watch List. That is 10 fewer than last quarter, although 15 banks have been shuttered by regulators since the final fourth-quarter watch list was published in February.

Based on fourth-quarter regulatory data supplied by Thomson Reuters Bank Insight for the nation's nearly 7,400 banks -- and factoring-in the 15 bank and thrift failures since TheStreet's final fourth-quarter Watch List was published on Feb. 16 -- 155 institutions were undercapitalized at as of March 31, 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 second 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.

The Federal Deposit Insurance Corp. reported last week the U.S. banking industry's first-quarter aggregate profit of $35.3 billion was its best performance since the second quarter of 2007. The regulator also said that there were 772 "problem institutions" as of March 31, declining from 813 the previous quarter and 888 a year earlier.

With the pace of bank failures slowing and the number of undercapitalized banks beginning to decline, it is reasonable to expect many of the institutions on the Bank Watch List to see regulatory pressure to merge with stronger institutions, rather than facing failure.

Plantation Federal Bank of Pawley's Island, S.C., was actually negatively capitalized as of March 31, after a $27.6 million first-quarter net loss lowered its Tier 1 leverage ratio to -4.88% as of March 31,

U.S. Century Bank of Doral, Fla., remains the largest institution on the watch list, with $1.4 billion in total assets as of March 31. The bank slipped from well capitalized to adequately capitalized in the fourth quarter of 2010, when it posted a $52 million net loss, as it set aside reserves, mainly for nonperforming commercial real estate and development loans, and saw its total risk-based capital ratio fall below 10.00%.

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