Checking a small local bank for stability

6 Replies

I am looking to take out some conventional loans with a small local bank. Any ideas how to do some due diligence on them?

thanks

If they are publicly held, you can look at their financial statements either through their investor liasion or through the EDGAR system:

https://www.sec.gov/edgar/searchedgar/companysearc...

If they are not publicly held, you can ask about their financial statements, but they are unlikely to give them to you.  

If it's a US Bank, any funds held are FDIC insured up to 100,000 per depositor. If the bank goes under while it's holding your mortgage, rest assured that somebody else will pick up the servicing and holding of that note, so it's really no skin off your nose if they do go belly up.

The FDIC requires information to update the Statement of Condition and Income report for all FDIC insured deposit banks in the US.

Any bank, public or private, that is an FDIC insured bank has that information available to the public through the FDIC.

There is also zero downside for any person or organization that borrows money from an institution that goes bankrupt. The loan agreement is a contract that governs the repayment terms so no bank or organization can come in and renege on those terms.

Originally posted by @Linda Weygant :

If they are publicly held, you can look at their financial statements either through their investor liasion or through the EDGAR system:

https://www.sec.gov/edgar/searchedgar/companysearc...

If they are not publicly held, you can ask about their financial statements, but they are unlikely to give them to you.  

If it's a US Bank, any funds held are FDIC insured up to 100,000 per depositor. If the bank goes under while it's holding your mortgage, rest assured that somebody else will pick up the servicing and holding of that note, so it's really no skin off your nose if they do go belly up.

FDIC insurance is $250,000 not $100,000.

Originally posted by @Peter Comb :

I am looking to take out some conventional loans with a small local bank. Any ideas how to do some due diligence on them?

thanks

Is the conventional loan for investment or personal reasons? May have to ensure that whichever bank you have in mind actually does have the products that you require. Also, is your concern that the bank doesn't have the funds to lend?

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