Midnight Think Tank

[WayneC777]

Breaking News Alert: Monday, October 11th 2010
Published by: InvestingAnswers (Austin, Texas)

Time-Tested "Bank Health" Indicator Known as "The Texas Ratio" Reveals The Names of:
The Next 437 Banks
That Could Fail


Note: We originally posted this article mid-day on June 9th, 2010. Since then, 41 of the banks on the original list, including eight on Andy's "Top 10 Banks in Danger of Failure" list, were seized by the FDIC.

Because your hard-earned savings depend on it, InvestingAnswers is committed to updating this list regularly so that you can have the most timely and relevant information at your fingertips. Please enter your email address in the form below to get our most current list.
Dear Friend,

Don't kid yourself into thinking that the worst of the financial crisis has passed. For some banks, it's just beginning. Eating all those bad loans is hurting all banks, and many more are going to fail.

The Federal Deposit Insurance Corp. (FDIC) says 80% of banks are profitable. But that leaves 20% that are bleeding cash.


There are 7,830 banks in the U.S. -- and 437 of them are in immediate danger of failing. Make sure your bank isn't on this list. Details below.
The FDIC currently has 829 banks on its "Problem Bank" list. So far this year, 129 banks have failed, about one-third of which did so in the third quarter.

That's a truly frightening number by historical standards: About 40% of the banks that have failed since 2000 did so in the first nine months of 2010.

Trouble is, the FDIC doesn't release its problem loans list -- it only says how many banks are on it.

But by using a special ratio that measures a bank's problem loans (the precursor to the loans that are eventually charged off), investors can determine with a high degree of accuracy whether their bank is safe.

It's called the "Texas Ratio" -- and it was developed by a financial wizard named Gerard Cassidy who used it to correctly predict bank failures in Texas during the 1980s recession, and again in New England in the recession of the early 1990s.

The Texas Ratio is determined by dividing the bank's non-performing assets by its tangible common equity and loan-loss reserves. Tangible common is equity capital less goodwill and intangibles. As the ratio approaches 1.0, the bank's risk of failure rises.

With only three exceptions, every bank that has failed in the second and third quarters has had a Texas Ratio greater than 0.90.

Using this highly accurate barometer of bank health, I've not only reassured myself that my own bank -- the highly excellent Amarillo National -- is safe and sound, I've also made a list of the 437 banks most likely to fail. You can get a free copy of this list by submitting the form below. If you bank at one of these institutions or have friends or loved ones who do, please pass this information along to them.

Is Your Bank One Of The 437
In Immediate Danger of Failure?
Fill out this form and we'll email you our list of 437 "Danger" banks.

Choose Your State:


Email:





I don't want to see any bank go under. But the fact is many have and many more will as the financial system works through its mountain of bad loans. The best way to predict which banks are in hot water is to use the Texas Ratio.

One bit of good news is that the 20 publicly traded banks in the S&P 500 have low Texas Ratios.

Institution Ticker Texas Ratio
Northern Trust NTRS 0.03
Peoples United PBCT 0.13
Hudson City Bancorp HCBK 0.15
Comerica CMA 0.20
Fifth Third FITB 0.20
Citigroup C 0.18
Keybank KEY 0.22
M&T MT 0.06
First Horizon FHN 0.29
Marshall & Isley MI 0.35
Regions Financial RF 0.34
Zion Bancorp ZION 0.51
J.P. Morgan Chase JPM 0.32
PNC Financial PNC 0.31
BB&T BBT 0.04
Huntington HBAN 0.30
Suntrust STI 0.36
Bank of America BAC 0.36
US Bank USB 0.30
Wells Fargo WFC 0.46

These large banks are strong. Too many others, however, are not. Please submit the form below to get the list of 437 U.S. banks in danger of failing immediately.

And again, if you have friends or loved ones who bank at one of the listed institutions, please pass this information along to them promptly.


Is Your Bank One Of The 437
In Immediate Danger of Failure?
Fill out this form and we'll email you our list of 437 "Danger" banks.

Choose Your State:


Email:





Frequently Asked Questions

"What are your top 10 banks in danger of failure?"
We're constantly updating our list as the banks we identify continue to fail. As of September 21, 2010, the top ten banks in danger of failure are:

Montgomery Bank & Trust, Ailey, GA
The Gordon Bank, Gordon, GA
Hillcrest Bank, Overland Park, KS
North Georgia Bank, Watkinsville, GA
American Trust Bank, Roswell, GA
Habersham Bank, Clarkesville, GA
The First State Bank, Stockbridge, GA
First Bank of Jacksonville, Jacksonville, FL
Sterling Savings Bank, Spokane, WA
Family Federal Savings of Illinois, Cicero, IL
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"What are you going to send me?" You'll get three things, starting with the list of 437 banks in danger of failing based on their Texas Ratio. We'll also keep you updated with our free, semi-weekly newsletter called The Investor Advocate. Finally, we'll give you StreetAuthority's most popular daily newsletter -- read by over 500,000 investors -- the StreetAuthority Investor Update. The Investor Advocate features an assortment of investing education articles that "look out" for small, individual investors -- while the StreetAuthority Investor Update gives you actionable investment ideas you can profit from. Both newsletters are written by a handful of the nation's brightest and most successful market analysts. If you decide you don't want to hear from us again we make it real easy to opt-out: At the bottom of each communication you'll find either a "cancel" or "unsubscribe" link. Alternatively, you can ask let our Customer Service team know by using our Contact Us form.

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