States that have already taken the brunt of the pain due to the rash of bank failures since the beginning of 2008 look to have more trouble on the horizon.

Based on early regulatory data for 96% of the nation's approximately 8,500 banks, Illinois, Georgia and California have more than half of the 78 institutions considered undercapitalized by regulatory capital guidelines as of March 31. Georgia leads all states with 11 bank and thrift failures since the start of 2008, followed by California with nine and Illinois, tied with Florida and Nevada with four.

In comparison, 60 banks and thrifts reported being undercapitalized per ordinary regulatory guidelines as of Dec. 31. Since 22 of those institutions have failed so far, it's clear that being undercapitalized is a good indicator of an institution's risk of failure.

The preliminary list of undercapitalized banks for the first quarter doesn't include savings and loan institutions, since data was available for only 10% of the approximately 800 U.S. thrifts.

The table below lists the 78 undercapitalized banks, in order of ascending Tier 1 leverage ratio:

Undercapitalized Banks - 3/31/09 -
Preliminary Regulatory Data ($Mil)
SNL Financial

In order to be considered well-capitalized, a bank needs to maintain a Tier 1 leverage ratio of 5%, along with a Tier 1 risk-based capital ratio of 6% and a total risk-based capital ratio of 10%. The respective minimum ratios for a bank to be considered adequately capitalized are 4%, 4% and 10%.

Please keep in mind the following:

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