Best and Worst Bailout Banks: Methodology

To devise our "market-to-bailout ratios" and determine which banks are most and least likely to pay back government bailout funds, we started with a list from the Federal Deposit Insurance Corp. (FDIC) of the 100 biggest banks operating in the United States, ranked by total assets. We eliminated foreign banks, which haven't directly received funding from the Troubled Assets Relief Program, and consolidated various subsidiary banks into their holding companies. Then we added the amount of TARP funding granted to each bank.

That left us with about 50 financial institutions. We eliminated Fannie Mae and Freddie Mac, which are operating under federal conservatorship. We also eliminated GMAC, which is privately owned and therefore doesn't have a public market capitalization. AIG is the biggest TARP recipient, but it's an insurance company, not a bank, so we eliminated that, too.

For the remaining banks, we included their total assets as of Dec. 31, 2008, and their market capitalization as of May 4, 2009. Then we calculated two numbers for each bank: TARP funding as a percentage of total assets and market cap as a percentage of total assets. Last, we determined the ratio between those two numbers, which we call the market-to-bailout ratio.

A market-to-bailout ratio of 1.0 means that investors value the company no higher than the amount of money the government has injected into the bank. In other words, government aid constitutes a large portion of the bank's perceived value. Banks with a ratio below 1.0 are in even worse shape. The healthiest banks have the highest market-to-bailout ratios, which peak at 10.3 on our list.