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BankTracker uses public data to sort out troubled banks

May 26 -- Georgia leads the nation in bank failures. What better time to chat up a Web site that uses public records to analyze the strength of every bank in America?

BankTracker calculates and publishes a “troubled asset ratio” for every bank, as well as other key financial information, all derived from public filings with the Federal Deposit Insurance Corp.

Oversimplified, the ratio expresses a bank’s bad loans and foreclosures as a percentage of its capital and reserves. When the value of the bad stuff approaches the value of the good stuff, a bank is courting disaster.

Six Georgia banks have failed since Feb. 1. Of those, according to BankTracker, five had a troubled asset ratio of 90 percent or more. (The national median is 10 percent.) Often, it was much more:

FirstBank Financial Services, McDonough – 393.3 percent
Omni National Bank, Atlanta – 362.9 percent
FirstCity Bank, Stockbridge – 315.3 percent
Freedom Bank of Georgia, Commerce – 241.5 percent
American Southern Bank, Roswell – 175.6 percent
Silverton Bank, Atlanta – 94.7 percent

FirstBank Financial Services of McDonough, for instance, carried $109 million of bad loans and foreclosed property as of Dec. 31. Capital and reserves totaled less than $28 million. The once-profitable bank, which lost $25 million last year, failed Feb. 6.

The Web site allows searches by bank name or by city and state. On the page for each city, banks with the best troubled asset ratio are listed first, then those with less favorable ratios.

Users may also look up banks that have received funds from the federal Troubled Asset Relief Program (although the published ratios may not yet reflect the effect of the TARP cash infusion.) In Georgia, 21 banks have shared in about $6.2 billion from TARP.

Some bankers worried that publishing data on troubled assets would panic depositors. That does not appear to have happened since the data went online two months ago.

Bankers note that FDIC insures deposits of up to $250,000, and that no depositor has ever lost a penny of insured funds. The $250,000 guarantee is temporary, however, and will fall back to $100,000 on Jan. 1, except for certain retirement accounts.

BankTracker is a project of the Investigative Reporting Workshop at American University and MSNBC.

The FDIC’s Failed Bank Web page is also helpful, explaining where the assets of failed banks have been transferred and a customer may get a lien release in order to sell a home or car. FDIC also maintains an online database of unclaimed funds at failed banks.