New BankTracker Project Helps Journalists Analyze Banks' Financial Health
Msnbc.com and the Investigative Reporting Workshop at American University's School of Communication have teamed up for a first-of-its-kind project.
The project, called BankTracker, analyzes banks' financial statements and, as its authors say, "sheds new light on just how dangerous conditions have become in many banks across the nation."
Bill Dedman, the msnbc.com investigative reporter who worked on the reporting that went along with the project, found:
Despite the worldwide, intensive focus on the health of the nation's banks and American taxpayers spending billions bailing out ailing banks, the banking industry would really rather you not see its condition. Msnbc.com said:
"Frankly, you could cause a run on a bank unnecessarily," said John Hall, ABA spokesman. "By widely publicizing this ratio, while the analyst community often uses it, when it's put in the general public's hands often they get confused and don't understand that this doesn't necessarily mean the bank can't come back to healthy status."
But BankTracker lets you see this data. In fact, you could see it all along but most of us didn't know where to look until now to find the figures that the banks must report.
The BankTracker project lets you search for information about:
- Total assets
- Total deposits
- Loans (net of allowance for loan losses)
- Net income
- Provision for loan losses (the charge to earnings for realized loan losses)
- Tier 1 capital
- Loan loss reserves (the allowance for loan losses)
- Loans that are 90 days or more past due (minus the amount of these loans guaranteed by the federal government)
- Loans that are in nonaccrual status (minus the amount of these loans guaranteed by the federal government). Nonaccrual means the bank can no longer claim interest income from the loan.
- Other real estate owned (primarily property the bank has acquired through foreclosures)
You can find your bank's data here.
I asked Wendell Cochran, senior editor at the Investigative Reporting Workshop, to tell us more about the project and how it came together with msnbc.com. Here are his edited responses:
Al Tompkins: What do you hope readers/online users will take away from this project?
Wendell Cochran: As in any story, I hope they get a better overall understanding of an important subject that touches everyone in the nation -- heck, the world -- at this moment in time. I hope they also will see that despite the difficulties, most banks remain strong.
I hope they will be armed with better information that permits them to ask questions about what is going on with the banks they use and, ultimately, better understand the complex policy debates going on in Washington.
Why have I never seen data like this before? It seems extraordinary that the health of banks is not easily ascertained.
Cochran: The bottom line is that most journalists don't know this data exists and is publicly available. It also is complex and takes some effort to grasp the language and connect the dots. I have worked with it off and on since the early 1980s, so I have gotten to know a lot about the ins and outs.
How does this data differ from what I might find in a bank corporation's U.S. Securities and Exchange Commission (SEC) filings, which are public?
Cochran: This data is also public; it is released every quarter. Unlike the corporation's securities filings, these reports are required by bank regulators and give very specific operating information about each bank in the nation. In the SEC reports you will find more summary data about overall corporate performance.
What is a good next step for journalists who want to report further on what you found?
Cochran: I guess I could be self-serving and say, link to us. If I were covering banking in a community, I would try to probe more deeply into the reports for my local banks. We have only provided the ability to see about a dozen variables, and each bank literally reports hundreds of items.
From the national level, we can only provide the broadest summary, but local reporters can burrow in and use these reports to shed light on the effects of the national economic and financial crisis on borrowers and lenders in their communities. Talk to your local bankers and to folks in the local financial community about what they are seeing and how these numbers relate to that.
What is the Investigative Reporting Workshop, and how did you get partnered up with msnbc.com?
Cochran: For a description of the workshop, you can visit our Web site. Charles Lewis, the founder of the Center for Public Integrity, is the executive editor. He joined our faculty in 2006. The university formally approved the workshop in the spring of 2008, so we have been active for about a year. We have two primary missions: We will pursue major investigative stories at the national and international level, and we do intend, where possible, to partner with major news organizations so the projects get the widest possible distribution.
We are creating what we intend to be a major research center focusing on issues related to investigative journalism. In particular, we want to study and develop new models for doing and delivering investigative journalism. Lewis has an article in the current issue of Columbia Journalism Review that describes some of his thoughts about the shape those models might take, and I would encourage you to read it.
The banking project is our initial project (we have several others in development), and it largely stems from two places: First, of course, the enormous public interest in what is going on in the economy and especially in banks, which have been the source of so much government attention and have received billions in federal support since last fall.
Second, I began covering banks more than 25 years ago in Des Moines and later covered the savings and loan/banking crisis in Washington. I have a lot of experience working with the Federal Deposit Insurance Corporation data that is at the core of our project.
As to how we connected with msnbc.com, investigatve reporter Bill Dedman and I have known each other through Investigative Reporters and Editors for 20 years. He won a Pulitzer in 1989 for his role in covering redlining in the Atlanta area. I also have admired the work he has done at msnbc.com on such topics as the condition of the nation's bridges, which also provided users access into a large national database.
So, when the banking project was in the final stages of development, I called Dedman. He immediately saw the potential for the data and the news value of the stories we could do using the data. He pitched the idea to his editors and they agreed.
Are these kinds of investigative partnerships an answer to the question of "Who will keep up the investigations when newsrooms cut back?"
Cochran: I'm glad you said "an answer" rather than "the answer." We do hope to help fill the enormous gap that has been created in recent years between the demand and need for high-quality investigative reporting, which has increased not decreased, and the capacity for the "mainstream" news organizations to meet that demand.
Clearly, others agree, as you are seeing the advent of new nonprofits almost every week. Some, like us, are connected to universities, some are connected to communities or geographic areas, some are simply bands of frustrated, displaced journalists who simply want to keep doing what they have been trained to do, what they believe is important and what they are good at.
However, no one should be misled here. Just because we are nonprofit does not mean that we don't have real costs. We need to hire people and pay them reasonably. As good as our student assistants are, they are not a complete substitute for experienced, trained journalists. We have rent bills. We need computers and furniture. We have to be able to support journalists to travel. And the list goes on, just as it does in any news organization.
At the moment, we and the others are being supported by contributions from foundations and wealthy individuals. However, I think we are convinced that we need a more sustainable or sustained income stream, whether that comes from advertising, or revenues from our partners or our audience. In other words, we face the same business imperatives as our colleagues in the "mainstream" press.
What kinds of partnerships and topics is the workshop most interested in?
Cochran: Let me take on topics first. At this stage in our development, I wouldn't rule out anything. For the foreseeable future, I think economic issues will be a focus. We are likely to develop specialties in such areas as environmental and health subjects. We always will be interested in the interplay between government and influence.
Being based in Washington, much of this work will likely be related in some way to the federal government and the development of public policy. We intend for all our projects to rely heavily on data, and we would expect that with most of them we will develop tools and applications to allow the public interactive access to this data.
As to partnerships, we will look for organizations that share our goals, that will give our work the broadest possible exposure, that can benefit from the contributions we can make and that, ultimately, can help support our work financially and otherwise.
Msnbc.com's Dedman added:
Another resource that journalists should learn to use is the Uniform Bank Performance Report (UBPR), an online tool that shows how banks compare with their peers on many levels. It comes from the same quarterly reports.
The UBPR takes some work to understand, but it's well worth the time. It can prompt a lot of good questions. It can tell you, for example, how one bank differs from the rest in the share of loans made to single-family housing, and what share of those loans are at least 90 days past due. It shows the amount of loans to officers, directors and shareholders of the bank, and how that compares to a peer group of similar banks in the U.S., by size. Changes in the same bank's performance over many quarters can reveal a lot.
A reporter can print out the UBPR and go down to the bank to discuss it, or take one bank's UBPR around to contacts at other banks to discuss it. For more than 20 years, the UBPR has been the first thing a banker looks at to evaluate the competition. Now you no longer have to go to the Federal Reserve libraries to see this data.