More banking companies are warning they might not survive.

With annual securities filings due Tuesday, more than half a dozen companies across the country disclosed this week that their auditors have substantial doubt about their ability to continue.

The list includes the $4.4 billion-asset Imperial Capital Bancorp Inc. in La Jolla, Calif., the $2 billion-asset AmericanWest Bancorp. in Spokane, the $1.3 billion-asset City Bank in Lynwood, Wash., and the $937 million-asset Buckhead Community Bancorp in Atlanta.

The companies are generally struggling with a surge of bad mortgages or construction loans. And all are facing capital strains to varying degrees.

Industry observers said there are more warnings to come.

Since so many companies have high-risk loan portfolios and impaired capital, and since the capital markets remain mostly frozen, the pace of auditor warnings is only going to accelerate, said Daniel Trigg, a partner with McGladrey & Pullen LLP.

"I would expect us to see the amount go higher than it has ever been before for financial institutions," said Trigg, who has been auditing banks for 36 years. "More than any other time I can recall."

Several of the companies that issued warnings had previously said detailed plans to stay afloat. These include the $7.5 billion-asset FirstFed Financial Corp. in Los Angeles and the $4.9 million-asset Irwin Financial Corp. of Columbus, Ind.

But now auditors — or, in the case of the $473 million-asset Cape Fear Bank Corp. in Wilmington, N.C., the company itself — are hinting at the possibility of failure.

Cape Fear included its warning in a filing Wednesday with the Securities and Exchange Commission. The filing indicated the company would not be able to submit its annual report by the deadline.

The $851 million-asset First National Bancshares Inc. in Spartanburg, S.C., also said in a filing Wednesday that its annual report would be late. The company said that the report, once filed, might include a warning from its auditor.

Trigg said that he has not seen so many "going concern" opinions since the late 1980s, and that he knows of a least a handful of companies that will have such language in their first-quarter reports.

Capital levels factor heavily into an auditor's decision on whether to issue such notices, he said. "It becomes a question of what is the likelihood of this bank being able to raise capital and become a profitable operation again, but also can that be done fast enough to prevent the regulators from walking in and saying you are done."

Industry watchers said raising capital has become very difficult but not impossible.

"We get calls all the time from investment groups not only looking to invest, but also trying to buy banks," said Dan Bass, the managing director in the Houston office of Carson Medlin Co. "There is a lot of money on the sidelines, but it gets down to doing the due diligence on the bank."

Despite the auditors' opinions, executives at Imperial Capital, FirstFed, Irwin Financial, Buckhead and City Bank said they expect their turnaround plans to work.

"We have more than adequate resources in terms of liquidity and capital," said Timothy M. Doyle, Imperial Capital's chief financial officer. "We believe we will meet our current obligations, strengthen our liquidity position and effectively respond to the challenges we are facing by implementing our strategic plan."

Part of its plan is to reduce assets, he said.

Matthew Anderson, a partner at Foresight Analytics LLC, said Imperial Capital would need to raise $130 million without reducing assets to achieve the 9% Tier 1 leverage ratio regulators have required.

Babette E. Heimbuch, FirstFed's chairman and chief executive officer, said its auditor issued a warning — even though the company and its thrift unit remain well capitalized — because of regulatory risk. "Nobody knows what regulators are going to do," Heimbuch said, citing the different responses regulators have had to the now-failed Downey Financial Corp. in Newport Beach, Calif., and the troubled BankUnited Financial Corp. in Coral Gables, Fla.

"They took over Downey while it was well capitalized, but they haven't taken over BankUnited, which is down to 1.37% core capital, when it is supposed to be 5%."

Irwin Financial's auditor cited recurring losses, impaired capital and enforcement actions in issuing its warning.

The company said Wednesday that it lost $104 million in the fourth quarter — its eighth loss in as many quarters. It also said that it was undercapitalized at yearend, and that its two banking units were adequately capitalized, according to the elevated capital levels regulators prescribed in October.

But Matt Souza, Irwin Financial's chief administrative officer, said the sale of a $690 million portfolio of securitized home equity loans, also announced Wednesday, would boost its capital ratios. He would not say by how much.

"The sale of home equity assets was a big victory for us," he said.

Though the "going concern" opinion is troublesome, the company is working to raise capital, Souza added.

Marvin Cosgray, Buckhead's president and CEO, said that he does not agree with its auditor, and that the company expects to become well capitalized again after completing a cash infusion from investors. He said confidentiality agreements prevented him from disclosing any details.

"We are reducing the size of the bank through selling some assets and recapitalizing the bank with an influx of new money," Cosgray said.

Conrad Hanson, City Bank's president and CEO, said it is selling nonperformers to reduce its asset size. Last quarter it sold $120 million of nonperforming assets, and Hanson said the goal is to trim to $1 billion of assets by yearend to improve its liquidity and capital ratios.

AmericanWest, Cape Fear and First National did not return calls seeking comment by press time.

Brett Rabatin, an analyst at Sterne, Agee & Leech Inc., said AmericanWest is one struggling firm that has the potential to attract capital.

"I think investors are going to look at these banks where they feel comfortable that management has been aggressive in dealing with its loan portfolio and not hoping the economy gets better," he said. "AmericanWest fits that bill."

A research report from Matthew Clark, an analyst at KBW Inc.'s Keefe, Bruyette & Woods Inc., said AmericanWest needs at least $75 million to rebuild its capital. Its approval for a government investment of $57 million hinges on the company's ability to match the amount with private capital.

Chip MacDonald, a partner at Jones Day, said stabilization programs coming from the federal government could cause the warnings to plateau. However, he said, "it is clearly a red flag, and it doesn't help your ability to raise capital or maintain customer confidence."

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