latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/10-us-banks-are-undercapitalized-50514909 content esgSubNav
In This List

10 US banks are undercapitalized

Blog

Spotlight on sustainability: How banks can overcome the challenges of achieving net-zero emissions by 2050

Blog

Insight Weekly: US election scenarios; borrowing costs rise; commercial REIT fears

Podcast

Street Talk | Episode 100 - KBW CEO offers optimism for bears fearful of bank liquidity, credit

Blog

Insight Weekly: Stocks endure more pain; bank branch M&A slows; debt ratios fall


10 US banks are undercapitalized

The number of undercapitalized U.S. banks and thrifts has plateaued, while the number of FDIC-designated "problem" banks continues to decline.

Eleven institutions as of Dec. 31, 2018, met at least one of the undercapitalized bank criteria: Total risk-based capital ratio coming in under 8%; Tier 1 capital ratio less than 6%; common equity Tier 1 ratio less than 4.5%; and leverage ratio less than 4%.

One of the undercapitalized banks at year-end 2018, Gunnison, Utah-based Gunnison Valley Bank, was acquired by Cedar City, Utah-based State Bank of Southern Utah, a unit of Southern Utah Bancorp, on Feb. 8. That brings the current number of undercapitalized banks to 10. During the last five quarters, there have been 10 or 11 undercapitalized banks.

Based on its leverage ratio, Columbus, Ohio-based Nationwide Trust Co. FSB joined the undercapitalized bank list during the fourth quarter. Following the November 2018 sale of approximately $2.4 billion in deposits to San Diego-based Axos Financial Inc., the bank's total assets fell to $258.8 million from $5.35 billion in the preceding quarter.

According to the FDIC, the number of "problem" banks has more than halved during the last two years, ending 2018 at 60 institutions. Total assets of those "problem" institutions were $48.5 billion at Dec. 31, 2018, representing the third consecutive quarterly decrease.

SNL Image

SNL Image

Did you enjoy this analysis? Click here to set up real-time alerts for data-driven articles on the U.S. financial sector.

Banks report regulatory capital information on the call report schedule RC-R, which can be accessed under the Regulatory Financials section of a company's briefing book page on the Market Intelligence website or with the Excel add-in tool.