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Fewer Bank Failures in 2012

American Banker recently reported that the pace of bank failures will slow considerably this year as the industry continues to recover from the real estate bust, according to the acting head of the Federal Deposit Insurance Corp. According to the article, sixteen banks have collapsed so far in 2012, and acting FDIC Chairman Martin J. Gruenberg said at a small-business lending conference in Washington Tuesday that he expects the total number of failures in 2012 to fall between 50 and 60. Last year the number of banks that failed fell to 92 from 157 in 2010.

American Banker further reported that the banking industry is coming off its most profitable year since 2006 and total loan portfolios grew in each quarter in 2011, according to the FDIC. Meanwhile, the number of problem banks continues to shrink. At Dec. 31, 813 banks and thrifts were on the FDIC's “watch list”, compared to 844 three months earlier.

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