Number of Problem Banks Declines for 15th Consecutive Quarter

According to the latest FDIC Quarterly Banking Profile the number of problem banks continued to decline for the quarter ending December 31, 2014.

After reaching a peak of 888 at the end of the first quarter of 2011 the number of problem banks has declined for 15 consecutive quarters.  The number of problem banks is now at its lowest level since the end of 2008 when the full force of the financial crisis was just starting to topple hundreds of banking institutions.

pbl dec 2014At December 31, 2014, the number of problem banks on the FDIC’s confidential Problem Bank List was 291, down from 329 at the end of the previous quarter. Since reaching the financial crisis peak of 888 problem banks at the beginning of 2011 the number of problem banks has now declined by 67 percent.

Many of the banks originally on the Problem Bank List dropped off the list when they became insolvent and were closed by regulators. Since 2008 a total of 510 banks have failed.

Banking Failures Since 2008

Year           Number of Bank Failures

2008               25

2009             140

2010              157

2011                92

2012                51

2013                24

2014                 18

2015                   3

Total               510

The number of banks still classified as “problem banks” by the FDIC remains elevated considering that the financial crisis started in 2008.  The current 291 institutions still classified as problem banks represent almost 4.5 percent of the total 6,509 FDIC insured institutions as of December 31, 2014.

Compared to the height of the financial crisis when even trillion dollar asset institutions were tottering on the edge of failure, the banks now classified as problem banks are relatively insignificant to the overall banking industry in terms of numbers and total assets.

As of December 31, 2014, total assets of all 291 problem banks amounted to $86.7 billion a mere 1.4% of total banking assets insured by the FDIC.

pb assets dec 2014

Comments

  1. Richard Skates says:

    I’ve been in banking since 1963, graduated from Georgia Banking School and the School Of Banking Of The South at LSU. I’ve been a banking consultant since 1983 and have been able to retire three enforcement orders and assisted several banks in avoiding the burden of enforcement orders.

    By far the most common problem I have ever seen in banking is the combination of arrogance and ignorance in senior management.

    Did you know that it’s far more difficult to qualify as a common plumber than to become the president of a bank. Even then few, if any, Bank Presidents, could qualify to be a plumber in any state I’ve ever been in.

    THE BANK REGULATORS NEED TO FIND A WAY TO PUT BANK DIRECTORS ON NOTICE, AND REMIND THEM THAT THEY WILL BE HELD RESPONSIBLE WHEN THEIR RESPECTIVE BANKS BEGIN TO DISPLAY POOR JUDGEMENT!

    Most directors have no idea of the depth of their responsibilities !

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