Which Banks Are in Danger of Failing or Collapse (2024) (2024)

The past year has seen a shakeup in the financial world, with several prominent bank failures raising concerns about the stability of the banking sector in 2024. There were 567 bank failures from 2001 through 2024.While predicting specific institutions in danger of collapse is difficult, we can explore the current climate and identify potential risk factors.

The collapses of Silicon Valley Bank, Signature Bank, and others in 2023 sent shockwaves through the industry. These failures were attributed to a combination of factors, including:

  • Unrealized Investment Losses:Banks hold investment securities, and significant drops in their value can erode a bank's capital base.
  • Overreliance on Uninsured Deposits:Deposits exceeding FDIC insurance limits leave banks more vulnerable if a crisis triggers a run on deposits.

The Federal Deposit Insurance Corporation (FDIC) maintains a list of failed banks [FDIC Failed Bank List], which serves as a reference point for past events.

186 Banks Are in Danger of Failing?

A report posted on the Social Science Research Network found that 186 banks in the United States are at risk of failure or collapse due to rising interest rates and a high proportion of uninsured deposits.

The report titled ‘Monetary Tightening and US Bank Fragility in 2023: Mark-to-Market Losses and Uninsured Depositor Runs?' estimated the market value loss of individual banks' assets during the Federal Reserve's rate-increasing campaign.

The study also examined the proportion of banks' funding that comes from uninsured depositors with accounts worth over $250,000. This blog post aims to explore the implications of the report and why it matters to buyers and sellers.

According to the report, if half of the uninsured depositors quickly withdrew their funds from these 186 banks, even insured depositors may face impairments as the banks would not have enough assets to make all depositors whole. This could potentially force the Federal Deposit Insurance Corporation (FDIC) to step in.

The failure of Silicon Valley Bank serves as an example of the risks posed by rising interest rates and uninsured deposits. The bank's assets lost value due to the rate increases and worried customers withdrew their uninsured deposits. As a result, the bank failed to meet its obligations to its depositors and was forced to close.

The report noted that “Even if only half of the uninsured depositors decide to withdraw, almost 190 banks are at potential risk of impairment to insured depositors, with potentially $300 billion of insured deposits at risk. If uninsured deposit withdrawals cause even small fire sales, substantially more banks are at risk.” The economists who conducted the study warned that these 186 banks are at risk of a similar fate without government intervention or recapitalization.

Number of FDIC-Insured Institutions on the “Problem Bank” List

The number of FDIC-insured institutions on the “Problem Bank” list has continued to decline over the years. In 2012, there were 651 problem banks, which decreased to 467 in 2013, 291 in 2014, and 183 in 2015. The trend continued with 123 problem banks in 2016, 95 in 2017, and 60 in 2018. By the end of 2019, there were 51 problem banks, and the number slightly increased to 56 in 2020. However, in 2021, the number dropped to 44. Looking ahead to 2022, the number of problem banks continued to decline, reaching 39 by the end of the year. This decline in problem banks is a positive trend for the banking industry and the economy as a whole.

Month/YearNumber of Problem Banks

As of 2023, the latest available data on the number of FDIC-insured institutions on the “Problem Bank” list is for the year-end 2022. According to the FDIC's reports, the number of problem banks continued to decline, reaching 39 by the end of 2022. This is a positive trend for the banking industry, indicating its stability and resilience amidst various economic challenges. The banking industry will continue to face risks and uncertainties, but the decreasing trend in problem banks demonstrates the effectiveness of the regulatory framework in ensuring the safety and soundness of the financial system.

Which Banks Are in Danger of Failing or Collapse (2024) (1)

Monthly List of Banks Examined for CRA Compliance – June 2024

The Monthly List of Banks Examined for CRA Compliance is a list issued by the Federal Deposit Insurance Corporation (FDIC) that provides information on state nonmember banks that have been recently evaluated for compliance with the Community Reinvestment Act (CRA). The list is issued monthly and includes the names of banks that have been examined for CRA compliance, along with the date of the examination.

The list is used by regulators, community organizations, and the public to monitor the performance of banks in meeting the credit needs of their communities. The list is also used by banks to assess their own performance and to identify areas where they need to improve. The list is available on the FDIC website and can be accessed by the public.

You can access the list here – Monthly List of Banks Examined for CRA Compliance

Banks are examined for CRA compliance every 12 to 36 months, depending on their asset size and rating. The examination frequency schedule used by the FDIC incorporates changes required by the Gramm-Leach-Bliley Act of 1999 (GLBA). Banks with assets greater than or equal to $250 million may be examined in advance of the examination mandate date since the GLBA frequency requirements do not apply to them.

Banks with assets of $250 million or less and a “Satisfactory” CRA rating are subject to a CRA examination no more than once every 48 months, while those with a “Needs to Improve” or “Substantial Noncompliance” rating are examined every 12 months. Banks with an “Outstanding” or “Satisfactory” rating of 1 or 2 are examined every 36 months, while those with a rating of 3, 4, or 5 are examined every 12 months.

The OCC conducts a CRA examination of a national bank every three years. The FDIC issues a Monthly List of Banks Examined for CRA Compliance, which includes the names of banks that have been examined for CRA compliance, along with the date of the examination.

Potential Impact of Such Bank Failures

The findings of the report highlight the importance of careful risk management and diversification of funding sources for banks to ensure their stability in the face of market fluctuations. Buyers and sellers of banking assets should carefully evaluate the risks associated with uninsured deposits and the potential impact of rising interest rates on bank assets.

The failure of Silicon Valley Bank serves as a cautionary tale for the banking industry, and it is essential to take proactive steps to mitigate the risks posed by these factors. The government may also need to step in to prevent a similar fate for the 186 banks identified in the report.

The potential impact of nearly 200 banks being at risk for the same fate as Silicon Valley Bank could be significant for the banking sector and the broader economy. If a large number of these banks were to fail, it could lead to a domino effect, causing other banks to fail as well. This could lead to a credit crunch, making it difficult for businesses and consumers to access credit and slowing economic growth.

In addition, a bank run on one of these vulnerable institutions could cause a ripple effect, causing depositors to withdraw funds from other banks as well. This could lead to a broader panic and a loss of confidence in the banking system as a whole, potentially leading to a recession or even a financial crisis. The federal government's promise to back all depositors in these banks is a step in the right direction to help prevent a wider panic.

However, this may not be enough to prevent a bank run if customers believe that the bank is insolvent. It is important for regulators and policymakers to monitor the situation closely and take action to prevent further bank failures. This could include recapitalizing vulnerable banks or providing government guarantees to support their operations. Overall, the situation highlights the importance of a stable banking system and the need for effective risk management practices in the financial sector.


Bank Failures: Why it Can’t Crash Real Estate?

Is Bank of America Safe From Collapse or Trouble?

Signature Bank Failure 2023: FDIC Plans to Sell its Housing Loans

List of Failed Banks in the United States


  • https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4387676
  • https://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2022dec/chartdif2.xlsx
  • https://www.businesstoday.in/industry/banks/story/186-us-banks-at-risk-of-failure-similar-to-silicon-valley-bank-says-research-heres-why-373895-2023-03-18
Which Banks Are in Danger of Failing or Collapse (2024) (2024)


What banks are collapsing in 2024? ›

Republic First Bank reported unrealized securities losses in excess of its equity as early as June 2022. State regulators closed Republic First Bank in April 2024, marking the first bank failure of the year.

What banks are in danger of failing? ›

Bank regulators view any ratio over 300% as excess exposure to CRE, which puts the bank at greater risk of failure. The banks of greatest concern are Flagstar Bank and Zion Bancorporation, according to the screener. Flagstar Bank reported $113 billion in assets with a total CRE of $51 billion.

Which is the safest bank? ›

JPMorgan Chase, the financial institution that owns Chase Bank, topped our experts' list because it's designated as the world's most systemically important bank on the 2023 G-SIB list. This designation means it has the highest loss absorbency requirements of any bank, providing more protection against financial crisis.

Which banks are riskiest? ›

How regulators look at risk concentration
#BankRCRE to T1+ALLL
1Dime Community Bank549.80%
2First Foundation Bank538.00%
3Provident Bank483.50%
4Valley National Bank472.70%
24 more rows
Mar 9, 2024

Is the US bank in trouble? ›

Read the CFPB's order. Read the CFPB's 2022 action against U.S. Bank. In its previous action against the bank, the CFPB fined U.S. Bank $37.5 million for illegally accessing its customers' credit reports and opening checking and savings accounts, credit cards, and lines of credit without customers' permission.

What is the largest bank to collapse? ›

The largest bank failure ever occurred when Washington Mutual Bank went under in 2008. At the time, it had about $307 billion in assets. During the uncertainty of the banking crisis, however, Washington Mutual experienced a bank run where customers withdrew almost $17 billion in assets in less than 10 days.

Which 4 banks are in trouble? ›

First Republic Bank failed on April 28, 2023. Signature Bank failed on March 12, 2023. Silicon Valley Bank failed on March 10, 2023. Almena State Bank failed on October 23, 2020.

Which bank is least likely to fail? ›

The safest banks in the U.S. for June 2024
BankThe Ascent's RatingFDIC Insured?
Western Alliance Bank4.25Yes
Wells Fargo4.00Yes
Axos Bank3.50Yes
6 more rows
Jun 6, 2024

What small banks are in trouble? ›

About the FDIC:
Bank NameBankCityCityClosing DateClosing
Republic First Bank dba Republic BankPhiladelphiaApril 26, 2024
Citizens BankSac CityNovember 3, 2023
Heartland Tri-State BankElkhartJuly 28, 2023
First Republic BankSan FranciscoMay 1, 2023
55 more rows
Apr 26, 2024

What is the most financially stable bank in the US? ›

Safest Banks in the U.S.
  2. U.S. BANK. U.S. Bank, also referred to as U.S. Bancorp, is a large bank based in Minneapolis, Minnesota, and currently stands as the fifth-largest banking institution in the U.S. ...
  3. PNC BANK. ...
  4. CITIBANK. ...
  5. WELLS FARGO. ...
  6. CAPITAL ONE. ...

Are credit unions safer than banks? ›

Generally, credit unions are viewed as safer than banks, although deposits at both types of financial institutions are usually insured at the same dollar amounts. The FDIC insures deposits at most banks, and the NCUA insures deposits at most credit unions.

Is Wells Fargo safe from collapse? ›

Know if your deposits are 100% FDIC-insured.

Wells Fargo Bank, N.A. is a member of the FDIC. The FDIC was created in 1933 to provide insurance protection for depositors of failed banks and to help maintain sound conditions in the nation's banking system.

How many US banks are in danger? ›

Consulting firm Klaros Group analyzed about 4,000 U.S. banks and found 282 banks face the dual threat of commercial real estate loans and potential losses tied to higher interest rates. The majority of those banks are smaller lenders with less than $10 billion in assets.

Which US banks are too big to fail? ›

Companies Considered Too Big to Fail
  • Bank of America Corp.
  • The Bank of New York Mellon Corp.
  • Citigroup Inc.
  • The Goldman Sachs Group Inc.
  • JPMorgan Chase & Co.
  • Morgan Stanley.
  • State Street Corp.
  • Wells Fargo & Co.

What banks are failing in 2024? ›

The news: Last Friday, Pennsylvania financial regulators seized and shut down Philadelphia-based Republic First Bank in the first FDIC-insured bank failure of 2024.

Is there a list for troubled banks? ›

FDIC Problem Bank List is a confidential list, published by the Federal Deposit Insurance Corporation (FDIC) every quarter, of U.S. banks and thrifts that are on the brink of financial insolvency.

Why are banks failing? ›

The most common cause of bank failure is when the value of the bank's assets falls below the market value of the bank's liabilities, which are the bank's obligations to creditors and depositors.

What happens when a bank is seized by regulators? ›

This means each depositor is insured to at least $250,000 at an FDIC-insured bank. Failed banks are listed as such when the FDIC or a state regulatory agency closes a bank. Once this happens, the assets of the bank are received by the agency — often the FDIC — and the debts resolved.


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