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NEW FDICIA 'CRITICALLY UNDERCAPITALIZED' REQUIREMENTS AFFECT 93 COMMERCIAL BANKS, 20 SAVINGS BANKS AND 40 SAVINGS & LOANS

 NEW FDICIA 'CRITICALLY UNDERCAPITALIZED' REQUIREMENTS AFFECT
 93 COMMERCIAL BANKS, 20 SAVINGS BANKS AND 40 SAVINGS & LOANS
 CORAL GABLES, Fla., Aug. 24 /PRNewswire/ -- The Omnibus Banking Bill, signed into law on Dec. 19, 1991, requires improvements in bank regulation within specific time frames. One such improvement, subtitled the Federal Deposit Insurance Corporation Improvement Act, FDICIA, clearly defines banks and thrifts classified "critically undercapitalized" and prescribes specific action for their resolution.
 The "ACT" notes that a bank is "critically undercapitalized" if either:
 1) "tangible equity" is less that two percent of total assets or
 2) leverage capital is less than 65 percent of the required minimum
 level.
 The legislation goes on to prescribe the following resolution for banks found "critically undercapitalized."
 "Action must be taken within 90 days after an institution becomes 'critically undercapitalized.' A receiver must be appointed nine months later if the institution is still critically undercapitalized," unless it is in compliance with a capital restoration plan.
 Bauer Financial Reports, Inc., a Coral Gables, Fla. research firm compiled a list of "critically undercapitalized" banks and thrifts using the criteria defined by the ACT.
 "Using financial data on all U.S. banks and thrifts, as of March 31, 1992, the most recent data available," said Karen L. Dorway, director of research, "we compiled a list of 93 'critically undercapitalized' commercial banks, 20 savings or co-operative banks and 40 savings and loans. Of the 93 banks," she continued, "73 have little chance of survival. The prospects of 38 of the 40 S&L's are equally dismal as are the prospects of all 20 of the savings or co-operative banks.
 "This section of the ACT becomes effective Dec. 19, 1992," added Dorway, "and presents a major hurdle to regulators. This is the first time that regulators have been required to resolve financial institutions with specific capital inadequacies in a prescribed time frame."
 Bauer Financial Reports, Inc. specializes in evaluating the financial performance of banks, thrifts and credit unions. Consumers can learn if their bank meets or fails to meet federal regulatory capital requirements by calling 800-388-6686. There is no charge for this service.
 -0- 8/24/92
 /NOTE TO EDITOR: Members of the press can request a list of institutions classified "critically undercapitalized" by calling Karen Dorway at 305-444-3125 or FAXing 305-441-0691./
 /CONTACT: Brienne Jorgensen of Bauer Financial Reports, 800-388-6686/ CO: Bauer Financial Reports ST: Florida IN: FIN PUB SU:


JB-SS -- FLFNS1 -- 2419 08/24/92 07:30 EDT
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Publication:PR Newswire
Date:Aug 24, 1992
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