THE 100 SAFEST BANKS
By Jersey Gilbert and Elizabeth M. MacDonald

(MONEY Magazine) – Government regulators are at last dealing with the disaster area known as the savings and loan industry. The enactment in August of the Financial Institutions Reform, Recovery and Enforcement Act, otherwise known as the S&L bailout, set up the Resolution Trust Corporation, which will dispose of at least 293 shaky thrifts, either through liquidation or by merging them with stronger institutions. Already, however, there are signs that the job will be larger -- and more costly -- than previously supposed. At first, analysts thought the S&L rescue would cost taxpayers $100 billion, but now it appears more likely that the bill may be as high as $225 billion, or $2,100 per tax return. Meanwhile, the implications for the economy in general and for savers and borrowers in particular are also becoming clearer. That is the focus of this special Money Scorecard. Effects will not be limited to the customers of dead or dying S&Ls. Savings yields will decline at all institutions as the most desperate bidding for depositors ends, and some borrowing rates will rise. Safety, moreover, is no longer a foregone conclusion at banks. Many banks indulged in the same reckless lending practices as the S&Ls did. What's more, the Federal Deposit Insurance Corporation has taken over for the bankrupt Federal Savings and Loan Insurance Corporation, meaning that regulators who would normally be looking out for bank customers' interests are now preoccupied with salvaging S&Ls. Granted, deposits of up to $100,000 are still federally insured. But if your institution fails or is merged, the high payout you thought you had locked in on your certificate of deposit could drop to a passbook rate. Thus MONEY offers a state-by-state list of the safest banks. It was culled from a list produced by Veribanc, a research firm, of 13,500 banks that meet a number of strict tests of financial soundness. Our selections were made on the basis of equity-to-assets ratio, which indicates an institution's ability to absorb potential losses. The average bank listed below has an equity-to-assets ratio of 12.32, and all have ratios of 9.89 or higher. By contrast, the industry average is 6.51. To be included on the list, banks also had to have at least $50 million in assets and offer a minimum of retail services. No banks made the cut in 11 states: Arizona, Arkansas, Delaware, Hawaii, Maine, Nebraska, Nevada, New Hampshire, Rhode Island, Vermont and Wisconsin. Rates, fees and other data shown here were compiled with the help of Bank Rate Monitor, an industry newsletter.

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