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CONGRESSIONAL MANDATE: A BANKING COUP; ONLY 13 CRITICALLY UNDERCAPITALIZED BANKS AT YEAR END 1992

 CORAL GABLES, Fla., Jan. 6 /PRNewswire/ -- Bauer Financial Reports, Inc., a research firm that specializes in evaluating the financial performance of banks, thrifts and credit unions, reports that only 13 commercial banks nationwide failed to meet the Dec. 19, 1992 tangible critical capital requirement of 2.0 percent set by FDICIA, which requires regulators to take action within 90 days and to resolve the bank within 9 months thereafter.
 Historically, federal regulators have resolved banks classified critically or significantly undercapitalized. As such, analysts predicted that a resolution deadline would only hamper efforts by regulators to resolve new critically undercapitalized banks, through a sale or merger, by forcing them to adhere to a definite time frame.
 Based on Sept. 30, 1992 data, just released by regulators, 32 commercial banks were classified critically undercapitalized. In the interim period, Oct. 1, 1992 through Dec. 31, 1992, 12 of those institutions were resolved, leaving a balance of 20 critically undercapitalized banks based on Sept. 30th data.
 However, the threat of pending resolution appears to have provided the impetus to recapitalize or merge. "When we verified the capitalization of the 20 banks noted, seven reported recapitalizations and an eighth a pending merger," said Paul A. Bauer, president of the research firm. "It would appear that the Congressional promise of seizure provided the impetus for recapitalization -- an unanticipated bonus. Not only does this mandate reduce resolution costs but it puts the onus of responsibility for the bank's survival where it belongs -- on the bank's investors rather than taxpayers," he added.
 The 13 critically undercapitalized banks are located in: Arizona, California, Florida, Georgia, Iowa, Illinois, Oklahoma, Texas and Puerto Rico. The list is available to the press by faxing 305-441-0691 or calling 305-444-3125.
 Consumers can call Bauer's BankRater(R) toll-free number 800-388-6686, Monday through Friday, 8 a.m. to 10 p.m., Saturday, 9 a.m. to 5 p.m., Eastern time to find out free if their bank or thrift meets all current federal capital requirements. If, in addition, they want to know exactly how strong their bank is, we will provide that information for a $10 fee for the first institution and $2 for each additional institution. (That information is also free if the bank is a BankRater(R) sponsor).
 Consumers can also purchase a Statewide Bank & Thrift List, which lists and rates all the banks operating in any one state, for $29 postpaid ($39 for Texas and Illinois).
 -0- 1/6/93
 /CONTACT: Brienne Jorgensen of Bauer Financial Reports 305-444-3125/


CO: Bauer Financial Reports, Inc. ST: Florida IN: FIN PUB SU:

AW-JB -- FLFNS1 -- 2017 01/06/93 07:31 EST
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Publication:PR Newswire
Date:Jan 6, 1993
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