How to Compare Banks by Safety Grade

What Safety Grades Are Built On

PlainBankData's safety grades synthesize six key metrics from FDIC quarterly Call Reports: Tier 1 capital ratio, total risk-based capital ratio, return on assets (ROA), Texas Ratio, efficiency ratio, and net interest margin. Each metric is scored against well-established regulatory thresholds and industry benchmarks, then weighted into a composite score that translates to a letter grade from A (strongest) to F (weakest).

The metrics are not arbitrary. Regulators use variations of these same ratios in their CAMELS examination system. Our grade is a public-data approximation of the kind of analysis bank examiners perform, without access to non-public supervisory information.

What the Grades Capture Well

What it tells you: The grade provides a quick screening tool based on hard financial data. Banks graded A or B have strong capital, consistent profitability, low problem-asset levels, and reasonable efficiency. Banks graded D or F have clear weaknesses in one or more of these areas at their most recent filing date.

What it doesn't tell you: Grades reflect the most recent quarterly filing, they are snapshots, not forecasts. They do not capture management quality, concentration risk in specific loan types or geographies, pending regulatory actions, or liquidity risk from uninsured deposit concentrations. A bank with an A grade and 90% uninsured deposits has a different risk profile than an A-grade bank with 30% uninsured deposits.

How to use it: Use grades to narrow the field, then dig into the underlying numbers. On each bank profile, you can see the individual ratios that produced the grade. Two B-grade banks may have very different profiles, one might have excellent capital but weak profitability, while the other has moderate capital but strong earnings.

Common Comparison Mistakes

The most common error is comparing banks across very different categories. A community bank with $500 million in assets and an A grade operates in a fundamentally different world than JPMorgan Chase. Community banks typically have higher capital ratios because they are simpler operations with conservative lending portfolios. Large banks have thinner capital ratios but access to wholesale funding markets, diversified revenue streams, and implicit systemic support.

A second mistake is treating grades as stable. Grades can shift meaningfully from quarter to quarter, especially for banks in the B-C range. A bank that was a B last quarter and is now a C may be experiencing normal seasonal variation or the beginning of a real deterioration, the letter alone does not tell you which.

What This Means for You: A Practical Framework

Step 1, Screen by grade. Use the rankings page to see banks sorted by grade. Filter to your state to focus on banks you can actually use.

Step 2, Compare within peer groups. Compare community banks with community banks (under $10B in assets) and large banks with large banks. The same grade means different things at different scales.

Step 3, Check the underlying ratios. Click into each bank's profile and compare the individual metrics. A bank with an A grade driven by exceptional capital but mediocre profitability is in a different position than one with balanced strength across all metrics.

Step 4, Remember what grades cannot tell you. If you are depositing above FDIC limits, consider factors beyond quantitative metrics: the bank's geographic and sector concentration, its deposit composition, and whether it has been subject to recent enforcement actions (available at FDIC Enforcement Actions).

Frequently Asked Questions

How does PlainBankData calculate safety grades?

PlainBankData calculates A-F safety grades using a composite of FDIC Call Report data: Tier 1 capital ratio, total risk-based capital ratio, return on assets, Texas Ratio, efficiency ratio, and net interest margin. Each metric is scored against regulatory thresholds and industry benchmarks, then combined into an overall letter grade.

Is an A-rated bank always the safest choice?

An A grade means the bank scores well on quantitative metrics from its most recent Call Report. However, grades are backward-looking snapshots and do not capture emerging risks. For deposits within FDIC insurance limits ($250,000), safety is guaranteed regardless of grade.

How often are safety grades updated?

Safety grades update quarterly when new FDIC Call Report data becomes available. Banks file at the end of each calendar quarter, and data typically becomes available 4-8 weeks later. A bank's grade can change from one quarter to the next.

Why do some large banks have lower grades than small community banks?

Large banks often carry thinner capital buffers and lower efficiency ratios compared to community banks. Community banks frequently maintain higher capital ratios because they operate with simpler business models. This does not necessarily mean large banks are less safe, they have access to capital markets and systemic support that small banks lack.