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.
At 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
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.