Analysis Finds Rising Number of Troubled Banks

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NEW YORK – The number of troubled banks continues to rise.

An analysis by the Wall Street Journal has found that nearly 100 banks that received bailout funds are in jeopardy of failing. The Journal, which based its analysis on Q3 data, said the 98 banks it identified as troubled have received more than $4.2-billion in Troubled Asset Relief Program (TARP) funds from Treasury. Seven TARP recipients have already failed in 2010.

Most of the banks considered at risk of failure are small by bank standards, with the median size $439 million in assets as of Sept. 30. The Wall Street Journal identified as troubled banks that have either a Tier 1 capital ratio under 6%; both a total risk-based capital ratio beneath the “well capitalized” 10% threshold and nonperforming loans of more than 10% of their portfolio, or a regulatory order requiring the bank to monitor or boost its capital.

 

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