The latest Quarterly Banking Profile issued by the FDIC today shows almost a 10% decline in the number of banks on the confidential FDIC Problem Bank List.
The number of problem banks finally declined to under 600 for the first time since the first quarter of 2009. The number of problem banks declined by 59 banks or 9.6% during the second quarter. As of June 30, 2013 a total of 553 banks were on the Problem Bank List compared to 612 at the end of the first quarter.
FDIC Chairman Martin J. Gruenberg noted that this is the ninth consecutive quarterly decline in the number of problem banks. The number of problem banks has declined by almost 40% since peaking out at 888 banks in the first quarter of 2011.
A total of 12 banks failed during the quarter ending June 30 and a total of 20 banks have failed so far this year. During 2012 a total of 51 banks failed The number of bank failures has been declining since the peak year of 2010 when 157 failed. If the number of bank failures for 2013 is less than 51, it will be the fourth year in a row of declining bank failures.
After only three bank failures for the years 2005 to 2007 the financial crisis caused the number of failed banks to soar. The total number of bank failures since 2008 totals 485 banks and counting.
The amount of assets held by problem banks declined by $20.8 billion or 9.8% during the second quarter.
Although the amount of assets held by problem banks has declined by more than 50% since peaking at $402.8 billion in the last quarter of 2009, the amount of problem assets remains extremely elevated compared to pre-banking crisis levels.