) -- Fourth-quarter data for the nation's banks and thrifts shows that the number of troubled institutions is still increasing.

Based on preliminary fourth-quarter regulatory data supplied by SNL Financial for roughly 90% of the nation's 7,700 banks and savings and loan associations, 160 were


according to the regulatory guidelines that apply to most institutions.

Click the link below to see the full list:

>>>Bank Watch List

The number of undercapitalized institutions increased from last quarter, even though 28 banks have failed since the second-quarter list was pulled on November 4. The fourth-quarter list is also likely to grow once the remaining regulatory data becomes available.

It is important to note that any capital raised by institutions during the first quarter of 2011 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


Three of the banks on the Watch List were actually negatively-capitalized as of December 31. The largest of these was

First Choice Community Bank

of Dallas, Ga., which had $308 million in total assets as of December 31. After reporting a fourth-quarter net loss of $20.9 million, the bank was left with a Tier 1 capital ratio of -2.37%. The bank's ratio of nonperforming assets - including loans past due more than 90 days or in nonaccrual status (less government-guaranteed balances) and repossessed real estate - to total assets was 26.87%.

The three largest banks on the Watch List last quarter have sufficiently improved their capital ratios to be excluded from the third-quarter list:


Superior Bank

of Birmingham, Ala. -- which was the largest institution on last quarter's Watch List - fourth quarter data isn't yet available. The parent company

Superior Bancorp

( SUPR) announced in November that the bank had filed a $58 million claim with the Gulf Coast Claims Facility for "additional stresses on our Gulf Coast loan portfolio" resulting from the Deepwater Horizon oil spill.

The largest bank on the preliminary fourth-quarter Watch List is

Integra Bank, NA

, which is headquartered in Evansville, Ind., and had $2.4 billion in total assets as of December 31. The bank is the main subsidiary of

Integra Bank Corp.

( IBNK). The holding company's shares plunged on Tuesday, after it reported $35.4 million loss at the parent level, and also said the bank subsidiary was no longer adequately capitalized.

The second-largest bank on the Watch List is

CommunityONE Bank, NA

of Asheboro, N.C., which had $1.9 billion in assets. The bank is held by

FNB United

. In January, the holding company announced that $7.5 million of a $15 million loan from


(STI) - Get Report

was converted into preferred stock with an 8% coupon, while the remainder of the loan was converted to a subordinated note, also paying 8%. Under the agreement with SunTrust, the holding company agreed to raise $300 million in capital by June 30, 2011.

Next is

Bank of the Cascades

of Bend, Ore., which is held by

Cascade Bancorp


. The bank reported net income of $3.7 million for the fourth quarter, resulting from a "reserve release" of $4.9 million, since net charge-offs - loan losses less recoveries - total $9.9 million, while the bank's provision for loan loss reserves was $5 million.

Capitol Bancorp


of Lansing, Mich. is the only bank holding company with multiple subsidiaries on the Bank Watch List, including nine subsidiary banks in six states. The holding company's ticker symbol changed from CBC to CBCR, as the shares were delisted from the New York Stock Exchange and the listing moved to the OTCQB.

The holding company had 64 separately-charted bank subsidiaries in 17 states at the end of 2009, and was aiming to reduce the number of subsidiaries to 26 in 2010, through sales of some subsidiary banks and mergers of others. As of September 30, Capitol Bancorp had 27 banking subsidiaries. The holding company's Tier 1 leverage ratio was 0.67% and its total risk-based capital ratio was 1.89% as of September 30, according to regulatory data supplied by SNL Financial.

On December 31, Capitol Bancorp announced a new plan to boost capital, which would include authorizing additional common shares, converting trust-preferred securities to newly-issued common shares, a rights offering and potentially a reverse stock split. Interest payments on the trust-preferred securities had been deferred since mid-2009. The exchange offer commenced on January 4 and was closed on January 31, although the company has yet to announce the results of the exchange.

Recent Events

Here are some events involving undercapitalized institutions that are subsidiaries of publicly traded holding companies:

On Monday,

McIntosh State Bank

of Jackson, Ga., which is a subsidiary of

McIntosh Bancshares


, announced the cancellation of two "salary continuation and retirement agreements" with an officer and a director of the bank, resulting in pre-tax savings of $641 thousand.

On January 20,

Charter Oak Bank


of Napa, Calif. announced that shareholders had approved the bank's agreement to merge with

Bay Commercial Bank

(BCML) - Get Report

of Walnut Creek California, in an all-stock transaction at a value of $2.3 million, or $1.23 a share, according to SNL Financial. The deal was announced on November 1, and represented a 60% premium from Charter Oak's closing price of 77 cents a share on October 29. The merger is expected to be completed during the first quarter.

Royal Palm Bank of Florida

, is held by Mercantile Bancorp

( MBR) of Quincy, Ill. The holding company announced in late December that it had identified a "material weakness" in its reporting and would restate its third-quarter results to an additional $16.3 in noncash losses and an additional deferred tax assets valuation allowance of $10.1 million. These moves were expected to reduce the holding company's capital ratios, and the company was "working with its financial advisors and legal counsel in assessing its strategic and capital-raising options."

Treaty Oak Bancorp


, which holds

Treaty Oak Bank

of Austin Texas, agreed in September to sell the bank to

Carlile Bancshares

of Fort Worth, Texas for $835 thousand, after which Carlile will recapitalized the bank by making an additional investment of $8.8 million.

Thorough Bank Failure Coverage

All bank and thrift failures since the beginning of 2008 are detailed in


interactive bank failure map:

Image placeholder title

The bank failure map is color-coded, with the states having the greatest number of failures highlighted in dark gray, and states with no failures in light green. By moving your mouse over a state you can see its combined 2008-2011 totals. Clicking on a state opens a detailed map pinpointing the locations and providing additional information for each bank failure.


10 Banks Ready to Repay TARP >>

Four Banks Fail; 2011 Tally at 11 >>


Written by Philip van Doorn in Jupiter, Fla.

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Philip van Doorn


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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.