America's Worst Banks

Forbes: America's Best and Worst Banks 2012

2. First Midwest Bancorp

Headquarters: Itasca, Ill.
Assets: $8 billion
Price/Book value: 1.0
NPLs/Loans: 3.9%
Reserves/NPLs: 48%
First Midwest had a bulk loan sale of problem loans in the third quarter that reduced its nonperforming loans by 46%. "We positioned ourselves to lower our future credit costs, which puts us in a strong position to perform. The core business is doing well," First Midwest CEO Michael Scudder told Forbes.

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America's Best a... We ranked the 100 largest publicly traded banks and thrifts on eight measures of financial health: return on average equity; net interest margin; nonperforming loans (NPLs) as a percentage of loans; nonperforming assets as percentage of assets; reserves as a percentage of NPLs; two capital ratios (Tier 1 and risk-based); and leverage ratio. The data is provided by Charlottesville, Va., financial data provider SNL Financial, but Forbes compiles the ranking of the best and worst banks based on an average of the individual ranks of each metric.

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America's Best B... 5. First Republic Bank

Headquarters: San Francisco, Calif.
Assets: $33 billion
Price/Book value: 1.5
NPLs/Loans: 0.2%
Reserves/NPLs: 283%
The bank has gone through a series of ownership changes starting in 2007 when Merrill Lynch purchased the firm. Next up, Bank of America bought Merrill Lynch and then two private equity firms bought the assets of First Republic in a deal completed in 2010. The bank had an IPO at the end of 2010.
*NPLs: Nonperforming loans include loans 90+ days past due and nonaccrual loans.

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The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.
America's Best B... 4. Prosperity Bancshares

Headquarters: Houston, Tex.
Assets: $14 billion
Price/Book value: 1.1
NPLs/Loans: 0.1%
Reserves/NPLs: 961%
Prosperity has the highest reserves/NPLs of any bank. It has benefited from the resilient Texas economy.

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The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.
America's Best B... 3. Signature Bank

Headquarters: New York, N.Y.
Assets: $16 billion
Price/Book value: 2.0
NPLs/Loans: 0.6%
Reserves/NPLs: 178%
Signature focuses on servicing the bank needs of privately held businesses in the New York metro area. Earnings are up more than 500% over the past five years.

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The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.
America's Best B... 2. Bank of Hawaii

Headquarters: Honolulu, Hawaii
Assets: $13 billion
Price/Book value: 1.9
NPLs/Loans: 0.8%
Reserves/NPLs: 293%
Bank of Hawaii ranks No. 2 for a second straight year (it topped the list in 2010). It is among the most profitable banks with a return of average equity of 16.2% the last 12-months—fifth best. Asset quality is also strong with their ratios of NPLs and NPAs among the lowest in the industry.

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The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.
America's Best B... State Street

Headquarters: Boston, Mass.
Assets: $204 billion
Price/Book value: 1.1
NPLs*/Loans: 0.04%
Reserves/NPLs: 431%
State Street’s financial metrics are strong thanks in part to its role as a custodian bank that services institutional investors worldwide. It does not have the commercial loan book like other large banks. That helped State Street have the lowest ratios for both NPLs and nonperforming assets to total assets among the 100 largest banks.

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The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.
America's Worst ... 5. PrivateBancorp

Headquarters: Chicago, Ill.
Assets: $13 billion
Price/Book value: 1.0
NPLs/Loans: 2.0%
Reserves/NPLs: 96%
Earnings have bounced back after huge losses in 2008 and 2009. The bank's return on average equity still ranks among the bottom quintile. The bank declined to comment.

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The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.
America's Worst ... 4. First Horizon National

Headquarters: Memphis, Tenn.
Assets: $26 billion
Price/Book value: 1.0
NPLs/Loans: 2.6%
Reserves/NPLs: 63%
A bank spokesperson says: "Our non-strategic portfolio masks our results." He points to a $250 million second quarter addition to the mortgage repurchase reserve to put "legacy issues behind us."

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America's Worst ... 3. Synovus Financial

Headquarters: Columbus, Ga.
Assets: $26 billion
Price/Book value: 1.0
NPLs/Loans: 3.6%
Reserves/NPLs: 59%
NPLs and NPAs are among the highest of any bank. It also ranks poorly on its level of reserves to NPLs. Synovus did not reply to a request for comment from Forbes.

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America’s Largest Private Companies
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The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.
America's Worst ... 2. First Midwest Bancorp

Headquarters: Itasca, Ill.
Assets: $8 billion
Price/Book value: 1.0
NPLs/Loans: 3.9%
Reserves/NPLs: 48%
First Midwest had a bulk loan sale of problem loans in the third quarter that reduced its nonperforming loans by 46%. "We positioned ourselves to lower our future credit costs, which puts us in a strong position to perform. The core business is doing well," First Midwest CEO Michael Scudder told Forbes.

(Photo via Forbes)

More from Forbes:
America’s Largest Private Companies
See More of America’s Best Banks
See More of America’s Worst Banks

The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.
America's Worst ... 1. Doral Financial

Headquarters: San Juan, P.R.
Assets: $8 billion
Price/Book value: 0.2
NPLs/Loans: 10.9%
Reserves/NPLs: 20%
Doral has the highest ratios of NPLs and NPAs of any bank. Its large commercial real estate loan portfolio has been hurt by the struggling Puerto Rican economy. The bank has not turned a profit since 2005. S&P downgraded the bank’s credit rating two notches this week to CCC- from CCC+. Doral did not reply to a request for comment from Forbes.

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More from Forbes:
America’s Largest Private Companies
See More of America’s Best Banks
See More of America’s Worst Banks

The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.
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The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.