Of course, even if the federal government were to buy a significant portion of BankUnited's poisoned portfolio of option-payment adjustable-rate mortgages, the bank might have to book even more losses at that time. It would also be a tall order for enough assets to be removed from the institution to boost it back to being well-capitalized.

Update: Undercapitalized Banks

TheStreet.com's partial list of 40 undercapitalized banks has changed since we published our Feb. 6 report, based on preliminary call report data downloaded from Highline Financial. Two of the banks, County Bank of Merced, Calif. and FirstBank Financial Services of McDonough, Ga., failed later that same day.

Another undercapitalized bank, Alliance Bank of Culver City, Calif., also failed on Feb. 6. Alliance was not on the undercapitalized list because its preliminary year-end call report data was not available on Dec. 5.

Two more undercapitalized banks from the preliminary list failed on Feb. 13: Riverside Bank of the Gulf Coast of Cape Coral, Fla., and Corn Belt Bank & Trust of Pittsfield, Ill.

Another institution on the original list, Warren Bank of Warren, Mich. no longer appears on the list of undercapitalized banks, since its call report numbers were revised. Warren Bank's revised tier-1 leverage and risk-based capital ratios as of Dec. 31 were 5.22% and 8.04%, putting it in the adequately capitalized category.

Here's the updated list of undercapitalized banks as of Dec. 31. Once again, we're excluding one bank that only operates as a trust bank, with no deposits or loans, and a very small Texas bank that is just a "shell" at this point, with no deposits, no loans and hardly any assets, since the bank charter is being transferred.

Undercapitalized Banks - Dec. 30, 2008 - Preliminary Data ($millions) -
Revised Feb. 17
Highline Financial, Inc

Joining the list since Feb. 6 is Lehman Brothers Commercial Bank of Salt Lake City, TeamBank NA, of Paola, Kan., Texas First Bank of Galveston and Texas National Bank of Mercedes.

Lehman Brothers Commercial Bank and the significantly undercapitalized Lehman Brothers Bank FSB, are held by Lehman Brothers Holdings, which filed for bankruptcy in September. Lehman Brothers declined to comment for this article.
Philip W. van Doorn joined TheStreet.com Ratings., Inc., in February 2007. He is the senior analyst responsible for assigning financial strength ratings to banks and savings and loan institutions. He also comments on industry and regulatory trends. Mr. van Doorn has fifteen years experience, having served as a loan operations officer at Riverside National Bank in Fort Pierce, Florida, 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.

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