Big Al45

Chewing on the FDIC List of 'Problem' Banks

The problem here is that the "problem list" is based on the FDIC's analysis of unaudited reports submitted by the banks themselves. There is no assurance that the banks are submitting accurate reports.

Furthermore, most publically traded bank stocks are actually bank holding companies. A bank holding company can own multiple FDIC banks and each subsidiary bank submits a separate quarterly report.

For example, WaMu is a bank holding company that owns two individual FDIC insured thrifts - one headquarted in Nevada and one in Utah. Each thrift submits a separate report and the assets of the Utah subsidiary are small enough to be included on the problem list. (Although it's probably not on the list- the Utah subsidiary is highly solvent according to Bankrate.)

The bottom line - you can't really rely on the FDIC problem list to evaluate the solvency of publically traded bank stocks.