Chicago ( TheStreet) - ShoreBank was poised to be shuttered by regulators after being denied $75 million in federal bailout money, according to Bloomberg, which cited three sources familiar with the matter.

ShoreBank was included in TheStreet's Bank Watch List of undercapitalized institutions, based on first-quarter regulatory data provided by SNL Financial, because the institution's Tier 1 leverage ratio had slipped to 1.16% and its total risk-based capital ratio had fallen to 3.37%, far below the 4% and 8% required for most banks to be considered adequately capitalized.

The ratios need to be 5% and 10% for most banks to be considered well capitalized, but ongoing losses and a very high level of nonperforming loans prompted an amended cease-and-desist order from the Federal Deposit Insurance Corp. and state regulators on March 10, requiring ShoreBank to raise sufficient capital to achieve a Tier 1 leverage ratio of 9% and a total risk-based capital ratio of 12% within 60 days.

According to preliminary regulatory data provided Friday by SNL, ShoreBank reported a second-quarter net loss of $22.2 million pushing the capital ratios down to 0.18% and 0.66%.

According to the early data for June 30, ShoreBank had $2.2 billion in total assets. Nonperforming assets -- including loans past due 90 days or in nonaccrual status (less government-guaranteed balances) and repossessed real estate -- comprised 24.32% of total assets.

Back in May, a group of investors including Citigroup ( C), Bank of America ( BAC), Goldman Sachs ( GS), JPMorgan Chase ( JPM), and General Electric ( GE) had promised ShoreBank a $145 capital infusion contingent upon the receipt of federal bailout money.

The money was placed in escrow and was scheduled to be returned Friday "unless the government agrees to provide money or some other remedy can be found," according to Bloomberg.

ShoreBank's numerous political connections prompted something of an outcry in the media, since it was pretty obvious that the lender was receiving far more attention and assistance than other similarly-sized banks lacking capital.

The attention and level of assistance offered by so many of the largest industry players begs the question -- why don't these companies step up with the rest of the capital that ShoreBank needs?

-- Written by Philip van Doorn in Jupiter, Fla.

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 TheStreet.com 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.

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