Banks at Risk of Failure

Did you know that the FDIC maintains a list of troubled banks that are at greatest risk of failure? While the contents of that list are a secret, the data used to create it are publicly available. As such, a number of private research groups and analysts have compiled lists of their own. Such lists typically use the so-called “Texas Ratio, ” which compares a bank’s assets and reserves to its non-performing loans, to identify risky banks.

Based on what happened during the Savings and Loan debacle in Texas back in the 1980s, analysts consider banks with a ratio over 100% to be at greatest risk. Here’s a rundown of the ten riskiest banks* according to Research Associates of America.

  1. Colorado Federal Savings Bank (Greenwood Village, CO; 244.8)
  2. Eastern Savings Bank, FSB (Hunt Valley, MD; 222.7)
  3. Integrity Bank (Alpharetta, GA; 191.6)
  4. Ameribank, Inc. (Welch, WV; 153.7)
  5. First Priority Bank (Bradenton, FL; 122.6)
  6. First Security National Bank (Norcross, GA; 112.1)
  7. Magnet Bank (Salt Lake City, UT; 110.4)
  8. Security Pacific Bank (Los Angeles, CA; 102.8)
  9. First National Bank of Brookfield (Brookfield, IL; 102.1)
  10. The State Bank of Lebo (Lebo, KS; 100.6)

While the Texas Ratio isn’t an absolute predictor of trouble, the former leader on this list (ANB Financial National Association, with a score of 344) failed earlier this year and has since been taken over by another bank. The good news is that all of the banks on this list are insured by the FDIC, and there aren’t any really big name banks listed here. Nonetheless, it appears that bank failures are rise so, if you have money at a listed institution, you might want to consider moving your money to a safer bank.

*Based on FDIC data from March 2008.

Source: ABC News via My Two Dollars

7 Responses to “Banks at Risk of Failure”

  1. Anonymous

    One of our banks (my mortgagee) failed here in Olympia, WA during that time (1979-81). It was one of over 2,000 banks that failed in the US back then! I was a house appraiser at the time, so I was very familiar with what went wrong.
    What we have going on now that is eerily similar is a housing bubble caused by lending to parties not qualified, then a bust caused by rising oil and a housing glut, higher foreclosures, and then double digit inflation. The latter caused many banks to try to stay afloat by investing in riskier and riskier schemes such as oil wildcatting; hence they went under.
    NOTE: everyone who had FDIC insurance got their money back, BUT IT TOOK MANY YEARS to get it.
    My advice…buy gold and silver (5% of your portfolio); buy solid company stocks (avoid all financials) that pay over 8% dividends (inflation will be up to 9-10% soon). Hold some cash and metals in a safe place (not a bank). Good Luck

  2. Anonymous

    I just had my first FDIC experience via the takeover of IndyMac Bank, as I bought a CD from them the day before they failed! From reading about the bank collapse, I learned that IndyMac wasn’t even on any of the risky-bank-radars that you mention above, which tells me that things can get bad really fast and not even have time to appear on such a list. Either that, or the radars are missing some very vital metrics that contribute to bank failures.

    (You can read more about my IndyMac experience and what will happen to my money at

  3. Anonymous

    Not to get too political here. Feel free to delete this comment if you want. I’m ok with that.

    But why doesn’t anyone remember that McCain is one of the Keating Five? Everyone seems to remember the ’80’s S&L debacle, but forgets that he was found to exercise poor judgement just by dealing with Keating.

    What’s a little sad about the list is that these are smaller regional banks. Creating a run on them will surely make them collapse completely.

  4. Nickel

    I’d be curious to know where WaMu ranks, as well. They’re not in the top ten, but the rankings are only as fresh as the data. I’m not sure how frequently the FDIC releases this sort of info, but the rankings referenced in the article are based on data from March.

  5. Anonymous


    Those of us who recall the S&L fiasco perk up our ears at this kind of information.

    During the time of the S&L collapse, SDXB had just retired as the premier investigative reporter in the state. After he ended his journalistic career, he started raking in the bucks doing P.R. for the largest S&L in Arizona. Shortly thereafter the economy fell apart. He says — I don’t recall this but at the time was in my Sleeping Beauty phase — that every bank and S&L in the state either failed or was acquired, on the brink of ruin, by national financial institutions.

    And come to think of it, not a single old-line name still graces any of the skyscrapers downtown. Or any other bank building.

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