Tier 1 Capital Ratios and NPAs of Unofficial Problem Banks in the U.S.

We reviewed the Tier 1 Capital Ratios of large U.S. banks back in June. In this post, lets take a look at the Tier 1 Capital Ratios and Non-Performing Assets (NPAs) of some of the banks from the Unofficial Problem Banks list created by Calculated Risk. CR compiled this list from various press releases from the FDIC, OCC, Fed and OTC. In the table below, I have included banks that trade in the organized exchanges only. Banks that are in the process of merger are excluded.

The latest Tier 1 Capital Ratio and Non-Performing Assets (NPA) Ratio of Unofficial Problem Banks in the US are shown:

S.No.	Name	Ticker	Tier1	Nonperfroming Assets as a percent of Total Assets
1	Amcore Financial Inc.	AMFI	5.81%	9.01%
2	ADVANTA Corp	ADVNA	19.70%	NA
3	Camco Financial Corporation	CAFI	12.19%	6.79%
4	AmericanWest Bank	AWBC	3.30%	8.86%
5	Anchor BanCorp Wisconsin Inc	ABCW	NA	NA
6	Atlantic Southern Financial Group Inc.	ASFN	8.82%	6.52%
7	Bank of Granite Corporation	GRAN	8.41%	4.02%
8	Cascade Bancorp	CACB	6.03%	8.50%
9	Beach First National Bancshares	BFNB	9.01%	6.98%
10	CIT GROUP INC	CIT	8.80%	NA
11	Cadence Financial Corp	CADE	13.08%	7.10%
12	Capitol Bancorp Ltd.	CBC	10.01%	6.44%
13	Citizens First Bancorp Inc	CTZN	5.61%	7.28%
14	City Bank	CTBK	10.10%	47.38%
15	Columbia Bancorp	CBBO	5.15%	N/A
16	First State Bancorporation	FSNM	7.02%	8.05%
17	First Bancshares Inc.	FBSI	NA	NA
18	First Mariner Bancorp	FMAR	4.26%	4.28%
19	First National Bancshares Inc	FNSC	3.78%	NA
20	Habersham Bancorp	HABC	NA	NA
21	Mercantile Bancorp Inc	MBR	9.04%	NA
22	HMN Financial Inc.	HMNF	NA	NA
23	Horizon Financial Corp.	HRZB	4.01%	10.17%
24	Ohio Legacy Corp.	OLCB	7.53%	6.34%
25	PVF Capital Corp.	PVFC	NA	NA
26	Patriot National Bancorp Inc.	PNBK	NA	NA
27	Rainier Pacific Financial Group Inc.	RPFG	6.30%	4.85%
28	Royal Bancshares of Pennsylvania Inc.	RBPAA	10.88%	NA
29	Sterling Banks Inc	STBK	8.89%	5.50%
30	Tamalpais Bancorp	TAMB	7.19%	3.63%
31	United Community Financial Corp.	UCFC	11.50%	5.43%
32	PAB Bankshares Inc.	PABK	9.57%	8.45%
33	TierOne Corporation	TONE	NA	8.73%
34	UCBH Holdings Inc.	UCBH	NA	NA
35	W Holding Co. Inc.	WHI	NA	NA

Note: NA denotes “Not Applicable” if these ratios are not readily available. Data is known to be accurate at the time this article was written. Please do your own research before making any investment decisions.

Large US banks have Tier 1 Capital Ratios in excess of 10%. In the above list most of the banks have low Tier 1 ratio of under 10% which suggests they are weak and prone to fail. Most of the banks in the list are small banks with market capitalization of just a few millions. The stock prices of most these banks are are in the low single digits or even under a dollar.

Spokane, Washington-based AmericanWest Bank (AWBC) has the lowest Tier 1 Capital ratio at 3.3%. The bank has a market cap of just $9M at its current stock price of $0.54. Last week the the Fed ordered it to halt dividend payments and to submit a plan to improve its capital base. Banks that have Tier 1 capital ratios under 5% are First Mariner Bancorp (FMAR),First National Bancshares Inc (FNSC) and Horizon Financial Corp. (HRZB).

Banks with more than 10% Tier 1 ratio include ADVANTA Corp (ADVNA), Camco Financial Corporation (CAFI), Cadence Financial Corp (CACB), Capitol Bancorp Ltd. (CBC), City Bank (CTBK), Royal Bancshares of Pennsylvania Inc. (RBPAA) and United Community Financial Corp (UCFC).

City Bank (CTBK) has a nonperforming assets to total asset ratio of an incredible 47.38%. This is because City Bank was a lender focused on residential construction. Advanta Corp (ADVNA) which issues credit cards to small businesses and business professionals has been slapped with a notice by NASDAQ for failing to meet continued listing requirements. Current stock price is $0.59. With many small businesses going bankrupt and credit card charge defaults soaring, it is not surprising to see Advanta struggling to survive.

Due to their weak position many of the above 35 small banks will fail or be forced to merge with strong banks unless they raise additional capital and rid their balance of toxic assets. Unlike the “too big to fail” large banks, Uncle Sam will not bail out these small community banks.

Comments

[Don-n-ABQ:]

FSNM put out an interesting press release today about "rumors":

www.snl.com/irweblinkx...

You would think that at the prices some of these banks are trading you would see some insider buying?

I just looked at FSNM and there has been only one insider purchase in 2009 (Dee H. Patrick, 5000 shares @$2.18 on 2009-05-01; which brought him to a total of 180,015 shares; so big deal in his overall holdings).

Prior to that you have to go back to three insiders (Avila Kathleen, Michael R. Stanford and Chris Spencer) in July 2008. So, only one insider buy since July 2008.

Also, in looking at the "tale-of-the-tape," it shows that the stock has rolled over with large block sales (9/18 & 9/23) at around the $1.30-1.33 area. Prior to that it was positive at the beginning of August when it traded in the $1.00-1.03.

There is additional positive volume action that occurs the two days prior to the August 5 announcement of :

"First State Bancorporation (“First State”) (NASDAQ: FSNM) announced today the retention of Keefe, Bruyette & Woods (“KBW”) as a financial advisor to the Corporation for the review of strategic alternatives to enhance shareholder value, including the possibility of entering into a business combination with a strategic partner."

Note to the SEC: There is also a curious volume uptick in the twenty (fifteen to thirty) minutes prior to the release of the August 5 announcement.

Bottom line, if the insiders are not willing to step up and buy at these prices, why should anybody else?

Money talks and .....you know the rest.

Oct 05 11:35 PM

[Don-n-ABQ:]

I decided to check another one on the list for insider action:

Columbia Bancorp. (CBBO)

For this one we see insider buying by multiple insiders in Feb., May, and August. These insiders are buying at prices from $0.97 to 2.21.

There was also a nice gap up in September. On Sep. 17 the stock closed at $1.19, then the next day (Sep 18), it opened up $1.95, spiked to 2.904 @ 11:00 AM, and closed at $2.59 on massive volume (over 2 million shares versus average daily volume of 30 thousand.)

There was no news for the massive gap up and volume serge, and the bank was "officially" stumped:

www.thedalleschronicle...

Staci L. Coburn, the CFO, has been selling and not buying, in three small transactions this year. And so has director Terry Cochran and Director of Risk Management Robert Card.

But, directors Frank Toda, Charles Beardsley, Richard Betz, and Jean McKinney, have bought larger amounts this year.

So, on a net comparison basis, some of the directors of CBBO are at least buying some shares. Something the directors at FSNM are not doing.

David's list might have more value if it was additionally screened with insider transactions?

Oct 06 12:20 AM