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.
- Colorado Federal Savings Bank (Greenwood Village, CO; 244.8)
- Eastern Savings Bank, FSB (Hunt Valley, MD; 222.7)
- Integrity Bank (Alpharetta, GA; 191.6)
- Ameribank, Inc. (Welch, WV; 153.7)
- First Priority Bank (Bradenton, FL; 122.6)
- First Security National Bank (Norcross, GA; 112.1)
- Magnet Bank (Salt Lake City, UT; 110.4)
- Security Pacific Bank (Los Angeles, CA; 102.8)
- First National Bank of Brookfield (Brookfield, IL; 102.1)
- 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.