Banks and the Texas Ratio

Given the current economic crunch, the quality of your bank is important. Unfortunately, banks aren't exactly forthcoming with useful numbers. Chris Brunner writing at the Lew Rockwell Blog has compiled a list of most of the US Banks (not Credit Unions) with their Total Assets and their Texas Ratio. WTF Texas Ratio? Chris explains it here:

List of Troubled Banks
Ready to see where your bank stands?

A few days ago, a friend of mine called me to ask if I had any idea how to figure out which banks would be the next to fail. Some extensive googling revealed that while lists of troubled banks obviously exist, none of them seem to be readily available to the public. Why? Because the bankers do not want you to have this. Just watch the president of the American Bankers Association in this interview talk about how important it is to keep this private.

This is a list of all of the banks in the United States and the corresponding Texas Ratio for each one. Developed by Gerard Cassidy, the Texas ratio is a measure of a bank's credit troubles. Basically, the higher the ratio, the worse the situation is for that particular bank. Banks with a ratio of 100 and higher are in very serious danger of collapse, and banks with a ratio of 50 or higher are vulnerable.

This is the formula I used:

100 * ((Non-performing Assets - U.S guaranteed loans) + Other REO) / (Equity + Loss Reserves)

All of this information is available on the FDIC website, but it's extremely difficult to gather in a meaningful way. In fact, I don't think you'll find a list like this anywhere else on the internet.

A bank needs to be at 50 and below, there are a lot of banks at over 100 and I pity the fools at Suburban Federal Savings Bank in Crofton, MD as their Texas Ratio is 495. I'm surprised that they aren't imploding at this very second...