FDIC: 829 Troubled BanksHighest Number of Problem Institutions Since 928 in 1993 The Federal Deposit Insurance Corporation's "Problem Bank List" rose to 829 in the second quarter of 2010. This number is up from 775 at the end of the first quarter, according to the federal regulator. The total assets of "problem" institutions declined from $431 billion to $403 billion.
The FDIC says the number of troubled banks is the highest since March 31, 1993, when the number and assets of troubled banks was at 928. One bright spot in the FDIC's latest announcement is that the increase is the smallest net increase since the first quarter of 2009.
The increase in the number of banks on the list of troubled institutions is not surprising, given some parts of the country are still mired in the recession, says James Chessen, American Banking Association's chief economist. Chessen point out that banks added another $27 billion in equity capital in the second quarter, and total industry capital is now just short of $1.5 trillion, but also says the fragile economy still presents significant challenges..
Not all banks that are on the list will end up failing. Industry analysts say the number of failed institutions is expected to peak in 2010 and is a lagging indicator of the country's recovery.
Forty-five insured banking institutions failed during the second quarter. A total of 132 institutions -- 18 banks and 14 credit unions -- have failed so far in 2010. A total of 171 institutions failed in 2009.