Safest Banks in United States - According to Texas Ratio

BestCashCow has sifted through data on all FDIC insured banks, thrifts, and savings and loans to find those with the lowest Texas Ratios. The Texas Ratio measures a banks's non-performing loans and real estate (usually foreclosures the bank now owns) versus the bank's equity and loan loss reserves. In layman's terms the Texas Ratio measures how much capital a bank has at hand to cover any potential losses from bad loans. The lower the Texas Ratio, the better, as it indicates the bank has more in reserve to cover losses. The closer the Texas ratio is to 100%, the less margin a bank has to absorb bad loans. If you look at the Texas Ratio of some recently failed institutions you can see that high numbers are bad:

Closed Bank Texas Ratio

Community First Bank 206.85%

North Georgia Bank 732.82%

American Trust Bank 571.69%

The average Texas Ratio for all FDIC insured banks is: 21.42% Many of the banks below have ratios so small they are practically zero.

Here are the banks with the lowest Texas Ratios:

Most of these are small banks. So, let's look at banks with assets of over $1 billion dollars. We also removed banks that didn't primarily serve retail banking customers. So, while OptumHealth Bank was #1 on the list, we didn't put it there since it is primarily a provider of Health Savings Accounts (HSAs).

The banks with over $1 billion in assets that had the lowest Texas Ratios are:

A low Texas Ratio isn't a guarantee the bank will not fail, but it's one indicator you can use to asses a bank's health. You can see the Texas Ratio for any bank and credit union in the United States by clicking on the bank name and then the Financial Overview tab. The tab also provides information on other key ratios such as Return on Equity and Capitalization as well as trends for those ratios and balance sheet information.