More bank failures expected; how you check the health of yours

closed bankThe banks may be paying back their bailout funds, but there's still trouble ahead for some banks. That became clear this week when the Federal Deposit Insurance Corporation agreed to almost double the amount of money in its 2010 budget that is there to deal with bank failures. What's more, the FDIC plans to add more than 1,600 staffers.

Of course, with any luck, we won't need those 1,600 additional workers, only 84 of them who will be permanent staff members, incidentally. But this year, we've had 133 banks fail, and there's no evidence to suggest that we won't have a 134th soon. And now, with the added funds and additional staff, it's clear that the FDIC expects the possibility of quite a few more bank failures next year among the nation's 8,300 banks.If you're worried about the health of your own bank, you should check out BankTracker, which is run by MSNBC and American University. (If you have a credit union and want to check out its health, then click here.) The site offers a nice, big map, making it easy to find your bank -- just type the name of a bank in their search engine or click on the map, and then put in the city your bank is located in. Once you do, take a look at the troubled-asset ratio they provide. If it's a small number, like 9.4, you can breathe easily. If it's a higher number, like 81.8, then you might start feeling a little queasy (though you still might not have anything to worry about).

As the BankTracker site says, while the troubled-asset ratio isn't an official FDIC statistic, nor is it meant to be a definite sign of a bank failure, it's a good clue that there's some stress going on at your bank. The banks that have fallen have generally had "troubled asset ratios of 100 percent or greater in the final quarter they reported data before they closed."

Discovering that your bank isn't as bad off as others out there can help you breathe easier. I wasn't worried about either my bank or credit union -- Ohio's banks have been, on the whole, pretty healthy -- but seeing that my credit union's troubled-asset ratio is currently at 17.5 and my bank's is 25.3 reassures me that trouble isn't afoot. Still, even if you find that your bank's troubled-asset ratio number is close to or more than 100, don't panic and think you need to immediately withdraw your money -- that is, unless you have more than $250,000 in one account (the FDIC insures bank accounts up to $250,000). And, of course, if you have that much money to put in one account, you're probably smart enough to spread it out. At least, I hope you are.
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