About BankHealthData

Why bank-by-bank health analysis matters

FDIC insurance covers consumer deposits up to $250,000 per depositor per insured bank, which means most retail depositors face bounded operational risk regardless of how their bank performs. Bank failures still happen — the FDIC has resolved hundreds of bank failures since 2008 — but for deposits below the insurance limit, the failure resolution process protects deposit access typically within one business day. The FDIC has never failed to make insured depositors whole in its 90-year history.

For above-limit depositors (small businesses, family treasurers, organizations with operating cash), bank-level health analysis is more directly consequential. Deposit balances above the insurance limit are unsecured claims on the bank in a failure scenario; while uninsured-deposit haircuts have been rare in U.S. resolutions historically, they are legally possible and have happened in some non-systemic resolutions. Sophisticated above-limit depositors typically use multiple banks, sweep arrangements, or specific deposit-insurance-expansion structures (CDARs, ICS) to manage concentration risk.

Beyond direct depositor concerns, bank-level health analysis matters for borrowers (a struggling bank may pull back on lending), for shareholders of publicly-traded banks (a bank-health deterioration affects equity value), and for policy researchers tracking regional banking stress that can presage broader credit-cycle dynamics.

How to read the four scoring factors

Tier 1 capital ratio (35% of the composite) measures core capital — common equity, retained earnings — against risk-weighted assets. Federal regulators consider banks "well-capitalized" above 8% Tier 1, with most healthy banks running 10-15%. Capital is the first defense against unexpected loan losses; thin capital means less buffer.

Non-performing loan ratio (30%, inverted in the composite so lower NPL is better) measures the share of the loan book where borrowers have stopped making payments or are likely to. Healthy U.S. banks typically run NPL ratios below 1% in normal credit cycles. Ratios above 2-3% signal credit-quality stress; above 5% signals serious distress.

Liquidity ratio (25%) measures how easily the bank can meet deposit-withdrawal demands without selling longer-term assets at a loss. Strong liquidity insulates a bank against deposit-run scenarios — a particularly relevant consideration after the 2023 regional-banking stress episodes.

Return on assets (10%) measures whether the bank is profitable. Sustained profitability builds capital over time; sustained losses erode it. Most healthy U.S. banks run ROA above 1%; sustained ROA below 0.5% eventually challenges capital growth.

What this data cannot tell you

A few limits worth knowing. First, the data lags. FDIC Call Reports are filed quarterly with up to 30 days after quarter-end, then take additional time to process before publication. The most recent data in our system is typically 60-90 days old. Bank conditions can change materially in that window — though for the vast majority of banks, quarterly snapshots are a reasonable approximation of current state.

Second, the composite measures financial-statement strength, not operational health. The 2023 Silicon Valley Bank failure illustrated the limits clearly: SVB ran strong on most traditional Call Report metrics right up to its deposit-run collapse. The failure was driven by deposit-concentration risk (heavy exposure to a single industry segment), interest-rate risk in the bond portfolio, and a digital-driven deposit-flight dynamic that no traditional bank-health framework would have caught. The BankHealth composite reflects similar limitations.

Third, Credit Unions file with the NCUA rather than the FDIC, under similar but not identical regulatory frameworks. Our coverage includes both FDIC banks and NCUA credit unions where data is available, but the scoring conventions differ subtly between the two regulators.