Updated from 6:59 a.m. EDT

In step with our

Banks That Can Snap Back Hard

article, at Stockpickr.com we set up a portfolio called

Bank Stocks That Are Toast

. The FDIC has publicly stated that 90 or so banks are on its watch list for possible defaults.

Here are the requirements we used for the portfolio:

1. Increasing nonperforming loans, or NPLs.

We want companies that are actually experiencing an increase in their defaults. And that are loaded with toxic subprime, prime and Alt-A paper.

2. Increased capital reserves requirements into the company's loan-loss provisions portfolio.

These companies will need to raise more capital at extremely dilutive spreads to continue their current business.

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3. Widening credit default swap spreads, or CDS.

The portfolio includes such stocks as

Corus

( CORS),

Downey Financial

(DSL) - Get DoubleLine Income Solutions Fund Report

and

Zions

(ZION) - Get Zions Bancorporation (ZION) Report

.

To read more, please click here.

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