Thrifts Join Bank Watch List

NEW YORK ( TheStreet) -- There are now 156 undercapitalized institutions on the TheStreet's Bank Watch List, with preliminary first-quarter data now available for roughly 96% of the nation's banks and thrifts.

Based on first-quarter regulatory data supplied by SNL Financial for the nation's banks and savings and loan associations -- and factoring-in 18 bank and thrift failures since TheStreet's previous Watch List was published on February 23 -- 156 institutions were undercapitalized according to the regulatory guidelines that apply to most institutions.

Click the link below to see the full list:

>>>Bank Watch List

It is important to note that any capital raised by institutions during the second 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.

Thrift institutions added to the Watch List this week include SCB Bank of Shelbyville, Ind., which is a subsidiary of Blue River Bancshares ( BRBI). SCB slipped to undercapitalized following a fourth-quarter net loss of $10.7 million, losing another $1 million during the first quarter.

Atlantic Bank and Trust of Charleston, S.C., and American Eagle Savings Bank of Upper Chichester, Pa., also joined the Watch List, with first-quarter data now available.

Coastal Bank of Cocoa Beach, Fla., which failed last Friday, was not on the preliminary first-quarter Watch List, since first-quarter regulatory data for the institution was not made available.

The largest bank on the preliminary first-quarter Watch List is Integra Bank, NA of Evansville, Ind., which had $2.2 billion in total assets as of March 31, and has been operating under an Office of the Comptroller of the Currency consent order since July 2010, under which it agreed to achieve and maintain a Tier 1 leverage ratio of at least 9% and a total risk-based capital ratio of at least 12%. SNL Financial reported that the OCC didn't accept a capital restoration plan submitted by the institution in March, and was therefore considered "significantly undercapitalized" by the regulator.

Integra Bank's nonperforming assets -- including nonaccrual loans and loans past due 90 days (less government-guaranteed balances) and repossessed real estate -- made up 10.92% of total assets as of March 31.

The institution is the main subsidiary of Integra Bank Corp. ( IBNK), which was delisted from NASDAQ on May 2.

The next-largest largest institution on the preliminary first-quarter Watch List is CommunityONE Bank, NA of Asheboro, N.C., which had $1.8 billion in assets and was actually negatively capitalized as of March 31. The bank is held by FNB United ( FNBN ).

CommunityOne is expected to be removed from the Watch List next quarter, as FNB United on April 27 entered into a deal to acquire Bank of Granite Corporation ( GRAN) of Granite Falls, N.C., with $155 million in new capital being contributed by The Carlyle Group and Oak Hill Capital Partners. The target company holds Bank of Granite, which is also on the Watch List.

The merger is subject to shareholder and regulatory approvals, and is expected to be completed during the third quarter.

Next is Community Banks of Colorado of Greenwood Village, which had $1.5 billion in total assets as of March 31. SNL reported that the Federal Reserve issued a Prompt Corrective Action against the institution on February 8 after determining it was "significantly undercapitalized." The order required the bank to become adequately capitalized within 90 days or agree to be acquired or merge with a stronger institution.

First Mariner Bank of Baltimore had $1.3 billion in total assets as of March 31, and after a first-quarter net loss of $6.8 million was left with a total risk-based capital ratio of 7.91%, which was just below the 8% required for most banks to be considered adequately capitalized by regulators. The institution is held by First Mariner Bancorp ( FMAR).

The holding company announced on April 25 that it had entered into an agreement with Priam Capital Fund I LP for an investment of $36.4 million, as part of the company's plan to raise $160 million in new capital. Priam's investment was contingent upon First Mariner lining up the remaining $123.6 million in capital.

First Mariner also said that CEO Edwin Hale, Sr., would step down after the recapitalization was completed.

Capitol Bancorp ( CBCR) of Lansing, Mich. is one of two publicly traded bank holding company with multiple subsidiaries on the Bank Watch List.

The holding company had 64 separately-charted bank subsidiaries in 17 states at the end of 2009, and reduced the number of subsidiaries to 23 in 2010, through sales of some subsidiary banks and mergers of others.

In its annual 10-K filing with the Securities and Exchange Commission on March 31, Capital Bancorp announced had received a subpoena from the SEC on November for information related to accounting for certain loans and their related loan loss reserves, and that the regulator had informed the company on March 30 that another subpoena was forthcoming.

Capital Bancorp's subsidiaries appearing on the preliminary first-quarter Watch List include Sunrise Bank of Arizona of Phoenix, Bank of Las Vegas, 1st Commerce Bank of North Las Vegas, Nev., Sunrise Bank of Valdosta, Ga., First Carolina State Bank of Rocky Mount, N.C., Pisgah Community Bank of Asheville, N.C., Central Arizona Bank of Casa Grande, and Sunrise Bank of Albuquerque, N.M.

Mercantile Bancorp ( MBR) had two subsidiary banks on the preliminary Watch List, -- Heartland Bank of Leawood, Kan., and Royal Palm Bank of Florida, of Naples. The holding company's main subsidiary is Mercantile Bank of Quincy, Ill., which was well-capitalized per ordinary regulatory guidelines as of March 31, and reported a first-quarter profit of $768 thousand during the first quarter.

The holding company's CEO Ted Awerkamp said in an April filing that the Mercantile Bancorp was continuing attempts to raise additional capital.

Thorough Bank Failure Coverage

There was one bank failure last Friday, following five failures the previous week.

A total of 40 institutions have been shuttered by regulators this year. During the current wave of failures that began in 2008, there have been 362 banks and thrifts closed by regulators, with Georgia in the lead with 61 bank closures; followed by Florida, with 50 failures; Illinois, with 42; and California, with 37 failed banks and thrifts.

All bank and thrift failures since the beginning of 2008 are detailed in TheStreet's interactive bank failure map:

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.

RELATED STORIES:



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

>To contact the writer of this article, click here: Philip van Doorn.

>To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.

>To submit a news tip, send an email to: tips@thestreet.com.

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.

More from Stocks

Dow Jumps on Signs of Progress in U.S.-China Trade Discussions

Dow Jumps on Signs of Progress in U.S.-China Trade Discussions

Tax Loss Selling Recovery Candidates, Part 2

Tax Loss Selling Recovery Candidates, Part 2

Microsoft, Amazon, Apple Are Top Holdings of U.S. Hedge Funds

Microsoft, Amazon, Apple Are Top Holdings of U.S. Hedge Funds

Cannabis Stock New Age Beverages Has the Farm Bill and Technicals On Its Side

Cannabis Stock New Age Beverages Has the Farm Bill and Technicals On Its Side

Investors Put Dave & Buster's Stock on the Bench

Investors Put Dave & Buster's Stock on the Bench