By Brian Ross, Rhonda Schwartz, & Justin Rood | ABC News | Jul. 15, 2008

ABC News Has Obtained Privately-Prepared Lists of Most Troubled Banks

Banks in Colorado, Maryland, Georgia and California top privately-prepared lists of troubled banks being circulated on Wall Street and in Washington.

While the Federal Deposit Insurance Corporation (FDIC) is keeping secret its official list of 90 troubled banks, ABC News has obtained other lists prepared by several research groups and financial analysts.

The lists use versions of the so-called "Texas ratio" which compare a bank's assets and reserves to its non-performing loans, based on financial data made public by the FDIC in March.

Analysts say banks with a ratio over 100 per cent would be the most likely to fail, based on what happened to Texas savings and loans during the 1980's.

"That a fair measure," said Hal Scott, a Harvard law school professor specializing in banking law.

"It doesn't mean every one of those banks is going to become insolvent, but if you have more bad loans than assets, it's not a bad way to judge what could happen," Scott told ABC News.

rawley said the Texas ratio doesn't count all of the bank's reserves for losses and fails to reflect that the loans are secured with real estate collateral.

Jan Schultz, chairman of the First National Bank of Brookville in Illinois, also said the numbers don't tell the whole story. While his bank has many nonperforming loans, they are secured by real estate whose value remains high, even with the slumping market, he said.

"We don't anticipate significant loan losses at all," Schultz told ABC News.

With a ratio just under 100, at 96, the $13-billion Downey Savings and Loan of Newport Beach, California is the biggest financial institution with a high ratio of bad loans.

Tom Prince, Downey's chief operating officer, said many of the bank's non-performing loans in March have since become current and that the Texas ratio "is only a statistic."

"I don't think there is any one number you can point to and say that will predict what will happen going forward," Prince said. "We feel good about our situation," he said.

The banks on the list are FDIC-insured, meaning that depositors with less than $100,000 would be covered should their banks go under.