Bank reporting tip: Cull FDIC "call reports" for signs of failing banks

Sean Sposito, a University of Missouri journalism student attending the fall Society of American Business Editors and Writers workshop in Kansas City, filed this report on using FDIC documents to search for failing banks.

Here is Sposito’s report:

A bank failure here in Kansas City several months ago was reason enough to take heed of what Susan Zubradt had to say.Â

A Kansas City Federal Reserve official, Zubradt said there are tell tale signs to a bank that is close to shutting down.Â

Studying call reports, or weekly quarterly reports that all banks need to make available to the FDIC, is one of the first places to turn, she said. Â

“The depth of information in the call report … that really did lay out a lot or more detail then you would find in SEC documents,” said Bernie Kohn, of the Baltimore Sun who is also the current SABEW president.Â

It’s “some of the best information out there out of any financial institution.”Â

Zubradt said indicators, such as the bank’s quarterly earnings, past due loans and loan loss reserves, can be found within the reports.

“You can really dig in and find out the better questions,” she said of the reports.Â

One SABEW member asked if there was a tell tale sign that could signal a collapse.

Zubradt said no but added that by keeping up with federal agency Web sites, you can find delinquencies that otherwise might go unnoticed.Â

Here are some of the sources of information she suggested:Â

www.fdic.gov

www.ffiec.gov/ubpr.htm

www.ffiec.gov/enforcement.htm

www4.fdic.gov/qbp/index.asp