How is your bank doing?

The Bank Tracker feature from the American University School of Communications gives some rather discomforting information about the state of bank loans. Discomforting to someone who knows nothing about the subject. United Bank & Trust, for example, had a troubled asset ratio of 49 at the end of 2009, with the national average at 14. $3 million in loans 90 days or more past due; $18.8 million listed as non-accruing (beyond the 90 days and collection of the principal is considered uncertain). That’s out of assets of $512 million. Others are much worse off. Here’s a link to the worst 450 bank positions, with a few in Michigan and Ohio. They make a score of 49 look very good as they range from 1150 to 90.

A couple notes from the site’s Q&A:

Question: If my bank has a high troubled asset ratio, what should I do?

Answer: The short answer is “nothing.” The FDIC covers all deposits up to $250,000 and no investor has lost any insured deposits since the FDIC went into business in 1935. The FDIC is backed by the full faith and credit of the United States government.

Question: Are you saying that a bank with a high “troubled asset ratio” is going to fail?

Answer: No. Each bank must be evaluated separately. In some cases, the owners of banks are able to inject additional capital in order to strengthen the bank. In other cases, individuals and companies are able to bring their loans current and repay them. Additionally, it is possible that a bank facing difficulties will be able to find a strong merger partner. The FDIC says that historically most “troubled banks” eventually recover.