The number of failed banks in the US so far this year through September stands at 14, down significantly from the 22 banks that were closed by regulators through the same time period last year, according to new research from SNL Financial. This is a trend that has continued during the last several years; through the same time period in 2012, 43 US banks had been closed.
According to SNL, the FDIC has relied less on loss-share agreements to complete its failed-bank transactions this year. Under a loss-share agreement, the FDIC absorbs a portion of the loss on a specified pool of assets, which maximizes asset recoveries and minimizes FDIC losses.
So far this year, none of the 14 FDIC assisted closures included a loss-share agreement, while three of the failures in 2013 included these agreements. In 2012, 20 failures included loss-share agreements.
Failures this year have cost the FDIC's deposit insurance fund less than previous years, SNL reported. The median cost to the fund at the time of announcement as a percentage of the failed banks' assets is 14 percent in 2014 to date, compared to 22 percent for the full year 2013 and 21 percent in 2012.
The largest bank to be shuttered this year was Illinois-based Valley Bank, with $456.4 million in total assets. The smallest bank to close in 2014 was Freedom, Okla.'s Freedom State Bank, which ended operations on June 27 with $22.8 million in total assets while operating a single branch location.
Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio