155 Undercapitalized Banks Still Litter U.S.

The bank slipped to undercapitalized in the third quarter of 2011. Following total losses of $79 million during 2011, U.S. Century Bank posted a first-quarter net loss of $3.6 million. The bank's ratio of nonperforming assets to total assets remained stubbornly high, at 21.42%, according to Thomson Reuters Bank Insight.

U.S. Century Bank in June of last year entered into a consent order with state regulators and the Federal Deposit Insurance Corp., agreeing to improve board of directors supervision of the institution, hire qualified new senior officers achieve a Tier 1 leverage ratio of 8% and a total risk-based capital ratio of 12% within 120 days of the order.

The second-largest bank on the first-quarter watch list is Guaranty Bank of Milwaukee, which was not included in the fourth-quarter watch list, because the institution's Dec. 31 thrift financial report was restated. Beginning with the first quarter of 2012, all savings and loan associations and federally chartered savings banks that were formally regulated by the Office of the Thrift Supervision and previously filed thrift financial reports are now required to file call reports, like all other banks and thrifts.

A first-quarter net loss of $5.1 million left Guaranty Bank with a Tier 1 leverage ratio of 2.83% and a total risk-based capital ratio to 5.40%.

The third-largest undercapitalized bank on the fourth-quarter watch list is First Mariner Bank of Baltimore, which had $1.2 billion in total assets as of March 31. The bank is held by First Mariner Bancorp (FMAR).

The holding company still hopes to meet the conditions of an April 2011 agreement Priam Capital Fund I LP, which was modified in September. Under the agreement, Priam would invest roughly $36.4 million in First Mariner Bancorp, contingent upon the company raising another $123.6 million from other investors.

First Mariner Bank is operating under cease and desist orders from state regulators and the FDIC. The bank and the holding company also entered into an agreement with the Federal Reserve, agreeing to improve its management and achieve respective Tier 1 leverage and total risk-based capital ratios of at least 4.00% and 8.00% for the bank by Dec. 31.

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