How to Check if Your Bank Is Financially Safe

Every FDIC-insured bank files a quarterly Call Report with detailed financial data — and it's all public. Here's how to read the key metrics and what they tell you about your bank's health.

Why financial health matters even with FDIC insurance

FDIC insurance protects deposits up to $250,000 per depositor per ownership category. That's a strong safety net — but it doesn't mean all banks are equally healthy. A bank in poor financial condition may offer worse loan terms, exit product lines, or require a disruptive merger. For businesses with deposits above the FDIC limit, or anyone with loans at the institution, the underlying health genuinely matters.

The three metrics that matter most

1. Return on Assets (ROA)

ROA measures how efficiently a bank turns its assets into profit. It's expressed as a percentage: a bank with $1 billion in assets that earns $10 million in net income has an ROA of 1%.

• Above 1%: Strong. Most healthy community banks fall here.
• 0.5%–1%: Adequate. Typical for larger banks with thinner margins.
• Below 0%: The bank is losing money. Watch closely.

One quarter of negative ROA isn't necessarily alarming — banks can have one-off charges. A sustained negative ROA across multiple quarters is a red flag.

2. Tier 1 Capital Ratio

Tier 1 capital is a bank's core equity — the cushion it holds against losses. Regulators require a minimum of 6% (4% for some institutions). Well-capitalized banks typically hold 10% or more.

• 10%+: Well-capitalized. The bank can absorb significant losses.
• 6%–10%: Adequately capitalized. Meets regulatory requirements.
• Below 6%: Undercapitalized. Regulatory intervention is possible.

3. Nonperforming Loan Ratio

Nonperforming loans (NPLs) are loans 90+ days past due or in nonaccrual status. A rising NPL ratio indicates borrowers are struggling to repay, which erodes bank earnings. A ratio above 3% warrants attention; above 5% is a serious concern.

How to look up your bank's financials

Every FDIC-insured bank files quarterly Call Reports, and the data is public. BankScorer's Financials page surfaces the most recent filing for every bank, with ROA, Tier 1 capital, and peer comparisons built in. You can also search directly for your bank and find the Financial Health section on its profile.

For credit unions, the equivalent is the Net Worth Ratio from NCUA 5300 Call Reports. Well-capitalized credit unions maintain a ratio above 7%. You can find this on any credit union profile on BankScorer.

Other signals worth checking

• →CRA rating: A bank with a Needs to Improve or Substantial Noncompliance rating may face regulatory scrutiny that limits its expansion — and signals how it treats its community. Learn more about CRA ratings.
• →CFPB complaint volume: A high complaint rate relative to assets can indicate systemic customer service problems. Browse banks by complaint volume.
• →Regulatory actions: Check the FDIC's enforcement actions database for consent orders, cease-and-desist orders, or civil money penalties against your bank.