This Bank is Your Bank : Dynamics of Cats

Banks don't want these numbers public because withdrawing funds from a bank with a high Texas score raises its Texas score -- which is penalizing it for what may be statistical variance and not a true measure of poor planning and policy.

While the Texas score may be suggestive of a banks problems, it's not the same thing as a scientific assessment thereof. (Snide comment: That's why it's called the Texas score -- it's not scientific -- just shooting from the hip.)

I think about the only thing a bank can do in the short term to lower its Texas score is to stop making any loans which aren't 100% guaranteed and to stop paying any dividends. Ironically, this last action is suggestive to the public that the bank is about to fail and may trigger a bank run which does the opposite.

Posted by: rpenner | December 31, 2008 1:54 PM

"So, why do Georgia banks suck so bad?"

Anecdotally (I.e., speaking very unscientifically and without a lot of hard evidence) GA was an epicenter, perhaps the epicenter, of fraudulent mortgage origination during the bubble. Georgia's house prices didn't get superinflated the way CA and Vegas did, but there was HUGE growth in suburban sprawl throughout the state. Money flowed like Evian and banks were, shall we say, lax. 5 of the 27 banks closed this year by the FDIC were in Georgia.

Interesting that on this list, Citibank gets a very low score, and yet many think it is already virtually bankrupt.

Posted by: Moopheus | December 31, 2008 3:02 PM

I count 93 with TR > 100, and 95 with TR >= 100. What gives?

I count 331 with 50 <= TR <= 100 .
315 with 50 < TR < 100 .

Posted by: llewelly | December 31, 2008 4:05 PM

Citibank got a huge cash injection from the government TARP.
That brings the Texas Ratio down by a lot.

The info for the Texas Ratio is all public information in the banks' quarterly statements, aggregating it into a table, with caveats is no big deal.
And, yes, it is indicative, not definitive.
But, a high and secularly growing TR is bad news, and for such a bank to survive it usually requires a capital injection.

Calculated Risk had a fair amount of discussion about why a lot of the small Georgia banks were in trouble.

Posted by: Steinn Sigurdsson | January 1, 2009 12:55 PM

There are problems with that table. Some banks appear twice (even Wachovia), IndyMac is on there with a ratio of 0, and so on.

What impresses me is how many small banks there still are, period. I wouldn't have guessed there were so many just from the bank names I see on the street. Do they have fewer retail branches per assets in $ ?

Posted by: Ben | January 1, 2009 5:25 PM