7/13/2012 9:51 PM ET|
The 359 safest banks in America
The following institutions, grouped by state, boast perfect scores using a method developed to diagnose failing banks.
The relationship Americans have with their banks used to be based on trust.
As well it should be. In many ways, banks make some of our biggest financial dreams come true.
We go to the bank when we want to buy our dream home, and again when we remodel the kitchen. Our bank helps us buy that great new car we've been thinking about. When we retire, the bank turns a lifetime of savings into income by paying us interest on money-market and savings accounts, and on certificates of deposit.
We trust banks to protect our hard-earned money. We expect that every dollar we put into our bank will be held safe until we come back for it.
But what if the bank doesn't deserve our trust?
In America, we have let our guard down in our banking relationships. We assume that everything will be fine if our bank fails. After all, the Federal Deposit Insurance Corp. insures our deposits up to $250,000. Why worry?
I hate to be the one to break this to you, but the FDIC's Deposit Insurance Fund -- aka the money used to cover bank failures -- has been all but drained.
In 2007, the DIF had a healthy $52.4 billion. But since 2008, more than 413 banks have failed, and that has taken a devastating toll on the once-solid reserve fund.
According to the FDIC, the balance in the DIF is now just $11.8 billion -- a drop of almost 78% from where it was before the financial crisis began. And though the fund will replenish slowly over time, the FDIC expects future bank failures from 2012 to 2016 to cost the fund $12 billion more.
I don't know about you, but I'm not willing to assume that the FDIC will always be there to cover my savings. Instead, I want to pick the safest bank in my area, so I know the FDIC will never have to get involved.
To help Americans regain their sense of financial security and peace of mind that their money is safe, we've found a way to find the safest banks in America -- using a special metric called the "Texas Ratio."
The Texas Ratio was developed by a financial wizard at RBC Capital Markets named Gerard Cassidy, who used it to correctly predict bank failures in Texas during the 1980s recession, and again in New England during the recession of the early 1990s.
While the ratio has been excellent at predicting bank failures, it can also be used to find the banks that are the furthest from failure.
Without walking through the formula (which you can find here), the takeaway is this: The closer the Texas Ratio gets to zero, the lower the bank's risk of failure.
Out of more than 7,300 banks in America, just 359 achieved a perfect Texas Ratio of 0.0. They are listed on the following pages, sorted by state (no banks qualified in Alaska, Hawaii, Maine, New Hampshire, South Carolina or Vermont).
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The whole problem witrh the banking bail out was that the US governme nt should not have bailed out the banks, but rather bought out the banks' customers they, literally, stole from.
Then shut down, PERMANENTLY, those failed banks, and ban all their chief executives and board members from ever running a bank in the US until they can, out of their own pockets, make up the losses they incurred.
Better yet, establish a federally-run banking system where there are no CEOs who decide they deserve raises when they feel like it. Let the govt establish rates, and let then the private sector compete on fairer terms than what "free market" has given us so far. Can't compete? Then go out of business.
Americans were quite safe investing in their government (bonds, etc). It's when private sector CEOs and board members run amok uncontrolled and insufficiently regulated is when we have one big financial failure after another.
Better yet, maybe we start executing these failing figureheads for financial terrorism. After all, that IS what they're guilty of.
What's a Bank ? I think Banks have stopped making loans years ago. None the less, i don't deal with Banks anymore. Never will again. I pay in cash or i go without, and that includes the big purchases items too. Same goes for credit scores. I couldn't care less what my "score" is. But that's just me. Most people are not in my situation.
Gee, i'm the first poster here. I really miss seeing all those "Life is so lonely" ads......NOT !!!!
In South Carolina, where I am now living, there are no banks that are trustworthy.
Like I didn't know that already.....
That's right, Yankee! For someone that's displaced you sure seem to know what you're talking about; which probably means your common sense is intact and hasn't been displaced. Credit Unions are FAR better than banks; I keep my cashola in a Credit Union. I don't understand why they aren't mentioned as bein safer than banks. It really makes me question the biased/compromised interests of this article's author! --mm
In the history of the FDIC, no depositor has lost even a penny of insured deposits. The FDIC has a line of credit with the Treasury for $500 million to ensure the funding if the insurance fund goes into the red. If the FDIC reaches a point of not being able to insure deposits, it wouldn't really matter how safe a bank is, the money would be worth nothing anyways.
All this to say, IMHO, this article isn't worth the space or time provided.
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