Undercapitalized Bank List Grows

The number of smaller community banks that are undercapitalized per regulatory guidelines is growing, as new data is beginning to identify institutions too small or too weak to receive government bailout assistance.

The number of banks considered undercapitalized per regulatory guidelines rose to 45 as of Dec. 31 from 38 in September, according to Highline Financial. While that might not seem like a significant increase for this environment, there were 12 bank or thrift failures in the fourth quarter alone.

The Treasury Department's investments through its $700 billion Troubled Asset Relief Program, or TARP, thus far have mostly gone to very large holding companies like JPMorgan Chase (JPM Quote), Bank of America (BAC Quote) and Citigroup (C Quote) or to community banks determined to be in decent shape. ...