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Fewer banks failing

By David McMillin ·
Friday, January 13, 2012
Posted: 4 pm ET

Here's some good news for the financial industry: fewer banks failed in 2011.

Last year, the final tally for bank failures did not break the triple-digit mark, a statistic that seems to indicate a positive trend for the banking industry. Here's a breakdown of how the banking industry has fared over the past four years.

Bank failures by year:

  • 2011: 92
  • 2010: 157
  • 2009: 140
  • 2008: 25

A recent report from SNL Financial tracks these failures across the country since failing financial institutions began to creep into the headlines in 2008. While bank failures have been a nationwide epidemic, the report shows the Southeast has been hit the hardest. In Georgia and Florida alone, the FDIC's data show that 132 banks failed between 2008 and 2011, more than 30 percent of all failures in the country.

One look at the FDIC's Failed Bank List reveals community banks have certainly been the biggest victims. It's no secret that this sector suffered serious losses due to residential lending, and the past few years have dealt a major blow to small institutions such as Community Bank of Rockmart and Old Harbor Bank.

The decline in total bank failures is great news, but the fact that the FDIC is still dealing with so many troubled institutions reinforces the need to evaluate your own institution. With Bankrate's most recent round of Safe & Sound Star Ratings, you can gain insights into how your bank is currently performing based on its asset quality, liquidity and a range of other factors.

As 2012 opens with fears of U.S. exposure to the financial crisis in Europe and a crippled housing market, I'm curious to see how this year will pan out for the health of the banking industry. Will the trend continue, or are the nation's community banks still at risk of falling victim to a stalled recovery from the recession?

What do you think? Are you confident about the current state of your bank?

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January 13, 2012 at 5:16 pm

At some point it had to slow down.

It really doesn't mean anything, even if the number were 10 for 2011.

The point is, banks are still failing.