2010 worst year for bank failures since 1992
More banks failed in the United States this year than in any year since 1992, during the savings-and-loan crisis, according to the Federal Deposit Insurance Corp.
Amid high unemployment, a struggling economy and a still-devastated real estate market, the nation is closing out the year with 157 bank failures, up from 140 in 2009. As recently as 2006, before the bubble burst, there were none.
Now, there are more on the horizon.
The FDIC’s list of « problem » banks – those whose weaknesses « threaten their continued financial viability »- stood at 860 as of Sept. 30, the highest since 1993. Historically, about a fifth of banks on the watch list end up failing.
About half of the the 2010 failures involved banks headquartered in four states: California, Florida, Georgia and Illinois.
The list of failed institutions at the FDIC is filled with community banks that would not be considered « too big to fail. » The loans that brought them down were predominantly commercial loans, which sets them apart from the banking giants whose problems were rooted in home mortgages.