FDIC: The Number of “Problem” Institutions Continues To Rise

From the FDIC's latest Quarterly Banking Profile:

The number of insured commercial banks and savings institutions reporting quarterly financial results fell from 7,830 in the second quarter to 7,760 in the third quarter. Five new reporting institutions were added during the quarter, while 30 institutions were absorbed into other charters through mergers. Forty-one institutions failed in the third quarter, bringing the total number of failures for the first nine months of 2010 to 127. The number of insured institutions on the FDIC’s “Problem List” increased from 829 to 860 during the quarter. This is the largest number of “problem” institutions since March 31, 1993, when there were 928. Total assets of “problem” institutions declined for the second quarter in a row, from $403.2 billion to $379.2 billion. The number of employees (full-time equivalent) increased for a second consecutive quarter, after falling in each of the previous 12 quarters. The 0.4 percent (8,195) increase lifted the industry’s total employment to 2.04 million, which is still 8.2 percent below the peak of 2.22 million reported in first quarter 2007.

More institutions are on the Problem List now than March 31, 1993, and by extension, the March 2009 lows.

This is not a recovery. This is what happens when you add yet more debt on top of too much debt. It is just an even bigger set of problems.