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98 TARP Recipients Close To Failure

• GlobalEconomicAnalysis.blogspot.com
 
Nearly 100 U.S. banks that got bailout funds from the federal government show signs they are in jeopardy of failing. The troubled banks identified by the Journal all have either a Tier 1 capital ratio under the "well-capitalized" 6% level; both a total risk-based capital ratio of under the "well-capitalized" 10% threshold and nonperforming loans of over 10% of their portfolio; or a regulatory order requiring the bank to monitor or boost its capital. A Federal Deposit Insurance Corp. spokesman declined to comment on the Journal's analysis, which also calculated that 814 of the nation's 7,760 banks and savings institutions are troubled according to these standards, up from 729 at the end of the second quarter. The FDIC's official list of problem banks, which uses different criteria from the Journal's analysis, includes 860 financial institutions. The banks aren't publicly identified. One example of a TARP recipient in deep trouble: closely held Legacy Bank of Milwaukee. José Mantilla, Legacy's president and chief executive, said the bank lends to an underserved, lower-income customer base.

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