IndyMac bank going under probably has you wondering, is my bank next? Various analysts are predicting that hundreds of small and regional banks could collapse in the next year. Here’s the top 10 list of the nation’s most troubled banks…
The list is determined by dividing the bank’s non-performing loans by the sum of its tangible equity capital and loan loss reserves, what is termed the “Texas-ratio.” Any bank with a ratio higher than 100 means they have more bad loans on the books than money to pay for them. 
The good news is that all the banks are FDIC-insured, which means that up to the first $100,000 of your deposits are guaranteed by the federal government.
Who’s Next? List of Troubled Banks Worries Wall Street, DC [ABC] (Photo: Getty)
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@Derv
Not a ton, try mega-ton. Consider the price for commercial lease/ownership, rising corp. tax rates, payroll/benefits, blah blah blah. ING and Emigrantdirect were where I held all of my “can safely tuck away but can still wire to my normal checking account within 2 bd” money. In early ’07 I remember being paid out at nearly 5%, plus they showed you the daily interest calculations, neato for a guy like me (read name)
@EtoillePB
Don’t take me for a snarky “tough-luck” character, I’m simply remarking on the economic lessons our great-grandfathers/mothers taught us. The positive-feedback loop of bank runs only worsens the market conditions.
Consumer confidence is one of those oft-irritating realities in economies. What Gramm said, while not altogether wrong, was a bit ham-handed. To your point, I agree our major lenders/creditors are not apt to issue extensions, for much the same reasons the banks are going under – liquidity issues.
Any credit unions on that list?
@InfiniTrent: it’s where the first bank was built. meanwhile, 48 blocks up, joey & johnny were sniffing carbona.
Stampede!
@m4ximusprim3: What is a divinig rod?
@Ilikenumbers: It is already in the news that despite “insurance,” people with accounts at IndyMac are having trouble withdrawing funds and other banks are placing limits on checks written on IndyMac accounts. So, insured or not, if you don’t have access to your money when you need it, insurance is worthless. If the money is indeed insured and safe, people should be able to take out as much of their money whenever they want, right? Since the accounts are insured, the money is available for people to withdraw, right?
Saying that it is wrong to point out the obvious (banks are failing) is to blame the messenger rather than the bank. I would go on, but @HurtsSoGood: says it well.
*raises hand* Stupid question … Where do credit unions stand with the whole FDIC thing?
Yeah, I know I could do research, but it’s hot.
Bank failures FTW! I can’t help but pay attention to what’s happening around me and think how about all the idiots that voted for Bush in the last election. I hate to say I told you so, but I will anyway. You all deserve this.
Am I the only one that sees the irony in the third bank on the list being named Integrity Bank?
@backbroken: Indeed, but you’ll always have people complaining either way:
If you post: “Why are you posting it? Do you want to spark a bank run? Jerk!”
If you don’t post: “Why didn’t you post it? Did you have something to hide from us? Jerk!”
@Derv: Compared to some other depository institution, they pay a pittance interest (not as pittance as a basic Chase, Citibank savings account, etc. But you get the idea).
Don’t quote me on this, but I think that the Netherlands based ING Group (parent company of ING Direct in the US) are in at least marginally better shape than some US financial companies.
@ChuckECheese: Insurance is never immediate and no bank is going to give you an interest free loan while waiting for the FDIC to disburse the money.
Run on the banks? I wish we’d all make a run on credit cards. Max ‘em out with cash advances, then call and cancel the card, then refuse to pay. Screw them!!!
@jswilson64: Right on!!! Best post I’ve seen here today.
@camman68: Its a forked stick which is used in “dowsing”.
Basically, certain people (we’ll call them “batshit insane”) think that if you hold a y shaped stick and walk around and get really “in tune” with the earth, the stick will jump in your hands when it’s over what you’re looking for (water, gold, dead hookers buried in lye, etc).
Basically, it’s nonsensical sorcery. Much like most of our financial reporting system.
@camman68: [en.wikipedia.org]
if you really want to be disappointed in the human race.
Why would someone put the bank of Lebo on this list??? Lebo is a little town in southeast KS with a population of less than 1000.
@BabyGorilla:
Cosmo: I might be able to crash the entire system.
“We are the United States Government. We don’t do that sort of thing.”
Cheers!
@snoop-blog:
I think I recall you mentioning before you’re from Indiana. I used to bank at a place back there called Fifth-Third Bank, which is far more rediculous than first-anything.
Please don’t forget to say that:
FDIC insures most Retirement Accounts (Roths, IRAs, Keoghs, etc…)up to $250,000.
So that IRA CD you got for $200,000 is ok.
Could Fifth-Third bank be simplified to “First and Second/Third Bank”? That way we could avoid improper fractions.
@Derv:
I’m thinking of opening a savings account with ING. They seem to be doing all right.
Look them up on Bankrate.com. HSBC Direct is the one in worse shape.
[www.bankrate.com]
@jswilson64: Yeah because those evil credit card companies instill those bad spending habits in people! Clearly, they’re not just a tool for some people to use wisely and others to completely screw up…
My heart skipped a beat until I realized—my fortune is in the State Banks of LESBOS! Whew!!!
/whoops, shitcan me if you must!
@MissTicklebritches:
Exactly. The only alternative is to hide this information from the public, which does nobody any good.
@Derv:
ING doesn’t charge overdraft fees? Is that true?
Wachovia has over $50 Billion in liquid capital per filing disclosed yesterday. Don’t worry – your money isn’t going anywhere.
FDIC insurance is not necessarily “per account”, it is based on the titling of the account. Read the coverage rules before splitting your money into 5 personal accounts at the same bank and thinking you’re covered – ’cause you’re not. I believe it’s $100K coverage for one single account, one joint account, one trust account, etc, but read the rules to be sure.
@WachoviaEmployee:
IIRC single-name accounts (e.g., just you) at a bank are covered for $100k (that is, the summation of accounts under a single name). Joint accounts (e.g., you and your spouse) are insured for the number of titles on the account ($100k per person), and under the FDIC rules the joint account is separately covered from whatever individual accounts you have. What this means is that if you play it smart, you can wriggle $400k of protection from FDIC insurance per bank by splitting your deposits as such (assuming you and your spouse’s names are John and Jane):
John (Single) – $100,000
Jane (Single) – $100,000
John&Jane (Joint) – $200,000
Total Coverage: $400,000
If you’re really lost, the FDIC has a great calculator here: [www.fdic.gov] You just punch in your deposits, who’s on the title, and banks (each bank is considered individually) and it’ll tell you how much you’re covered for.
@BabyGorilla: BINGO!
The real faith based program is finances.
@jswilson64: i don’t think so. you gonna pay their employees living expenses, etc? credit is a tool. learn about it & use it wisely.
@Jabberkaty: [www.ncua.gov]
@HurtsSoGood: well said, thank
you.
@BabyGorilla: beautiful
Um… that’s incorrect. Eastern’s not in trouble at all, and WMAR-TV in Baltimore had to issue a retraction for the report (being an ABC affiliate).
Here’s the report on the retraction: [www.baltimoresun.com]
“The good news is that all the banks are FDIC-insured, which means that up to the first $100,000 of your deposits are guaranteed by the federal government.”
Umm… the bad news is that all of us as taxpayers get to foot the bill to bail out the jackasses who loaned blockbuster video store managers $600,000 to buy a house.
I don’t see how this is good news at all. If Freddie and Fannie go under, the entire US will be bankrupt. I mean all of it. We’re done.
Scott Adams at MSN has already pointed out that the entire net worth of the United States is equivalent to 400 billion barrels of gasoline– or put another way, the reserves of Saudi Arabia and Iran. Or put another way, Saudi Arabi and Iran have us pwn3d.
[articles.moneycentral.msn.com]
I don’t need the media to tell me I need to make a bank run. I just do a little poking around on Bankrate.com. Fortunately, the only bank I have to worry about I have less than $30 in because I moved my money to a higher yield account a couple of years ago anyway.
Yeah, I want to know if my bank is acting financially irresponsible. I’ve dumped boyfriend’s for this. I’ll definitely start seeing a new bank if I find out they’re buying dumb house loans.
Aaw, dang… I would be happy to see Bank of America (which ate up Countrywide) and Capital One on that list.
@IphtashuFitz: It’s public information retard.
There is a lot more issues in play to cause a bank to fail than just a couple ratios and some witchcraft.
But media speculation sure doesn’t help.
A few things:
WachoviaEmployee already touched on this, but the $100K insurance limit is per ownership category, NOT per account (and the limit is $250K for retirement accounts).
Credit unions are insured by the National Credit Union Administration (NCUA), which is essentially the same as FDIC.
Your bank or CU should (actually must, by law) have a brochure available titled something like “Your FDIC (or NCUA) Insured Deposit” which explains in agonizing detail how it all works. The best thing to do if you are concerned about insurance limits is to go and talk to a bank/CU representative. They can explain how the limits work and help you set up your accounts so that all your funds are insured.
This is COMPLETELY off the top of my head, but IIRC a married couple with 2 children can have funds of $1.4 million insured at a single institution as long as the accounts are set up properly.
And to the person who said taxpayers pay for the insurance payouts to customers of failed banks, this is not really true. Banks and CUs pay insurance premiums to FDIC or NCUA which cover the losses UNLESS things get really ugly like they did with savings and loans in the 80s. Then a government bailout is required. Older readers may remember the FSLIC which was like FDIC for S&Ls and died along with S&Ls in the 80s.
Will things get really ugly with banks now and require a government bailout? Probably.
@furseekr:
A sum of the permutations of:
Single Accounts: 400k
Joint Accounts (2 parties): 1,200k
Joint Accounts (3 parties): 900k
Joint Accounts (everyone): 400k
Total coverage: $2,900,000
Daaaamn.
Notice that none of these top-ten banks are located in Texas.
(I’m sure there are banks in all fifty states that have cruddy mortgages on their books…)
#11- The bank formerly known as my wallet
@IphtashuFitz: Very true. The media should sometimes learn to shut up.
One of the major reasons why IndyMac Bank went under is because some US Senator published a letter that he sent to a bunch of people that he believed IndyMac Bank was going to go under.
When you’re in a competitive industry that requires you to have to loan out approximately 90% of your deposits, it will certainly hurt when suddenly you have a line of people who want to withdraw their money.
Hey look, it’s a good old-fashioned bank run! Where’s Jimmy Stewart when you need him?!
To be honest, Indymac was in real trouble long before anyone put the spotlight on them. You don’t have to be over 100 to be in trouble as a bank.
A married couple can have several hundred thousand in deposits at one bank and still be insured by the FDIC through simple trusts for each other and other direct relatives. The FDIC website has its EDIE calculator to show how your accounts can be structured so as to maximize
FDIC insurance.
Folks who are managing large sums should investigate Promontory Interfinancial Network’s Certificate of Deposit Account Registry Service (CDARS) program available at about 2,000 banks nationwide (including my bank, Decatur First Bank near Atlanta). CDARS can insure funds up to $50,000,000 by placing deposits in chunks under $100k to its member banks, all FDIC insured, and putting funds from depositors of other member banks back into your home bank. You receive one statement and one 1099, and funds equivalent to your deposit stay in your community for your bank to reinvest. Your CDs have the same interest rate and are available in terms from 4 weeks to 3 years.
Bitch a little more about JP Morgan being mean to you on the phone or hitting you with a $1.29 charge or whatever, but they’ll be there at the end of the day. Hell, I’ll bet customer service is real personal and friendly at most of the banks on the above list…
Bottom line, if you have money you can’t afford to lose put it in a bank too big to fail. Actually, make that “banks”.
The State Bank of Lebo? That sounds like the bank that holds my winnings from the Nigerian lottery.
@Pro-Pain: what the hell are you talking about? Bush didn’t have anything to do with this. The market is undergoing correction for poor credit practices and the fallout of the subprime bubble. the GSE’s have been run by high-ranking dems for years, and in a free market, you have to look at them, not the president, who doesn’t control the market. Nor do we want him to. Take your partisan vitriol somewhere else.
@savvy999: Why is it called the ‘Texas Ratio’? Because it’s god-awful hot?
Because “everything’s bigger in Texas” – it’s all about the exaggerations. The banks listed have overstated their loans/assets ratio and now they’re being called on their lies.
Just because a bank loans out $100.00 does not mean they have $100.00 in the safe or in liquid assets. Its more like $10.00 in the bank for every $100.00 loaned out.
So for all your money they are paying you 1, 2, maybe 3% interest on, they are turning around and charging 5 to 20% interest ten times over. Pretty slick, till everybody gets greedy.
For a very good explanation of how our banking system works check out http://www.scamorbam/bankingscams.html
There are a couple of websites that people should be aware of
http://www.fdic.gov/edie
http://www.ncua.gov/ins
these are calculators that will tell you your coverage for banks and credit unions respectively.
FWIW, if you have $10.00 or $100k in a bank, if they are mismanaged, you should pull out as much as you can as quickly as you can. Some things that might indicate mismanagement:
1. Bad business practices (such as lending money to people who obviously can’t afford to pay it back).
2. Offering services to people who wouldn’t ordinarily qualify for them and looking the other way.
3. CEO has a smoking hot 29 year old secretary with huge hoots (the biological clock is ticking and he’s not leaving his wife)
Well see. The lists are nice for the people foolishly keeping in excess of $100,000 in the account. Learn your lessons and break it across banks. Break money across banks anyway so that you have enough emergency money in case one goes out and its 8 weeks before you get you money back.
As far as stock market beating inflation….not right now.
This is why I don’t invest in the financial sector of the market. As for the balance of my bank accounts, I have several of them. All of them with less than $100,000 for that reason.
[beatingthestockmarket.com]
@GiselleBeardchen: LOL. I saw the same “word.”