Management Strategies

09:18 AM
Connect Directly
Facebook
Twitter
Google+
RSS
E-Mail
50%
50%

Number of Undercapitalized Banks Falls To Lowest Level in Five Years

26 banks were considered undercapitalized as of June 30, according to research from SNL, compared to 38 the same time last year.

The number of undercapitalized banks in the U.S. fell to its lowest level since 2008, according to research from Charlottesville, Va-.based SNL Financial.

According to SNL, as of June 30 26 banks and thrifts were undercapitalized, based on the criteria of having Tier 1 capital ratios below 4%, compared to 38 institutions at the end of the first quarter and 56 institutions a year ago. Tier 1 capital is generally defined as a bank's main source of capital, primarily including commons tock and reserves.

[Register for Interop here and check out the “IT Is Your Business, Run It Like One” session on October 4 in NYC.]

The firm said the number of undercapitalized institutions has fallen to the lowest level since the third quarter of 2008, when 14 banks were considered undercapitalized. The number of undercapitalized banks in the industry has steadily declined for the last 11 quarters, with failures accounting for the bulk of the decline. The trend was consistent through 2012 as well, when the number of undercapitalized banks decreased by 26 to 44 institutions.

According to SNL, just 20 banks have failed so far in 2013 — 12 of them during the second quarter.

[See Also: Number of Undercapitalized Banks Falling]

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Jonathan_Camhi
50%
50%
Jonathan_Camhi,
User Rank: Author
9/13/2013 | 7:04:24 PM
re: Number of Undercapitalized Banks Falls To Lowest Level in Five Years
Very positive news. Hope the trend continues.
Register for Bank Systems & Technology Newsletters
White Papers
Current Issue
Bank Systems & Technology Dec. 2, 2014
BS&T's 2014 Elite 8 executives are leading their banks to success, whether it involves leveraging the cloud, modernizing core systems, or transforming into digital enterprises.
Slideshows
Video
Bank Systems & Technology Radio
Archived Audio Interviews
Join Bank Systems & Technology Associate Editor Bryan Yurcan, and guests Karen Massey and Jerry Silva from IDC Financial Insights, for a conversation about the firm's 11th annual FinTech rankings.