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

by: David Hunkar

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%
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. (OTCPK:HRZB).

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

City Bank (OTCPK: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.