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More Fun Bank Failure Facts
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I really enjoy trivia posts and had a lot of fun researching facts to include on my fifty fun facts about bank failures post, so I thought I’d bring it back. This time I wanted to cut out all the other stuff, like FDIC insurance facts and “first bank failure” type facts, and just look at the list of failures themselves.
The statistics were calculated from the FDIC’s list of failed banks and we used data going back to 2000.
More Bank Failure Facts
- The greatest number of failed banks in one day was nine on October 30th, 2009. San Diego National Bank in San Diego CA, Bank USA in Phoenix AZ, Park National Bank in Chicago IL, Madisonville State Bank in Madisonville TZ, North Houston Bank in Houston TX, Citizens National Bank in Teague TX, Pacific National Bank in San Francisco CA, COmmunity Bank of Lemont in Lemont IL, and California National Bank in Los Angeles CA.
- Which state has had the most number of failures? Georgia (40) edges out Illinois (36) with Florida (29) and California (28) battling hard for fourth and fifth place.
- Which city has had the most number of bank failures? It’s a shared honor – seven in Atlanta, GA and Chicago, IL.
- Four of the Chicago bank failures occurred on the same day – April 23, 2010. The FDIC seized seven banks that day, all of which were in Illinois.
- Less surprising is that the second most number of bank failures in a city is four – Alpharetta, GA, Los Angeles, CA, and Phoenix, AZ.
- There are seven states without a failed bank – Alaska, Delaware, Maine, Mississippi, Montana, North Dakota and Vermont.
- 1006 – that’s the lowest FDIC certificate number of a failed bank since 2000, belonging to Citizens State Bank in New Baltimore, MI. Citizens was formed on June 2nd, 1922. It failed on December 18th, 2009.
- Recently, the FDIC has been seizing banks on a Friday but that hasn’t always been the case. 92.4% of closures were done on a Friday, though 6.4% saw a closing on Thursday. Monday, Saturday, and Wednesday saw just one closure each (our of 265). The FDIC must be sharpening their pitchforks on Tuesdays as they didn’t close a single bank in the last ten years on that day. And we assume that most Sundays they’re busy readying the bank to be reopened on Monday.
- Dwelling House Savings and Loan Association has the longest name of any failed bank.
- The shortest name? ebank.
Bank failures aren’t fun, but their facts can be!
(Photo: phobia)
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I’m surprised Nevada or Las Vegas doesn’t end up in the statistics, considering how badly their economy tanked.
Sometimes a bank may be out-of-state owned. you never know.
Bill Snider
Sometimes banks are owned out-of-state. So you never know.
Bill Snider
Correct, their closure is listed for the state in which they were incorporated or granted approval be the regulators to do business.
I think its interesting that Georgia and Illinois led the list. I would have expected California and Florida to be higher.
Interesting trivia. I wonder how many people it takes to shut down / takeover a bank in one day.
I guess you guys are to young to remember the 70′s when banks that were called SD/L’s were failing daily.
At one time banks gave you a toaster, blanket, camera or some such gift to open an account with them. The running joke was that buy a toaster and they would throw in a free S/L bank.
Bill Snider
I remember that! One was offering a set of ‘crystal cut goblets’. Maybe it was to toast your ‘newly found financial expertise’?
Remember when the FDIC insurance was $100,000?
I went into my bank on a Monday morning. I was surprised to see that their name had changed.
There was a guy who was berserk in the managers office. He had deposited a check for $130,000 from something he sold the prior Friday. When he came back on Monday, they told him he was entitled to the FDIC insurance amount. I can hear him screaming now – “Why didn’t you tell me on Friday afternoon that you were being closed that night. You guys are a bunch of @#$%^&*(”
So on one hand these statistics are fun, to others they are deadly.
Oh goodness, that’s horrible. I actually flinched.
Talk about bad luck. Small businesses must have had a really tough time during that.
One last thought. I would check with http://www.bauerfinancial.com to make sure you don’t fall into this trap.
Bill Snider
There were banks in the 70′s called S/L’s. They were failing all of the time. So history repeats.
Bill Snider
I never understood what was different about these Savings and Loans Institutions.
Remember when FDIC was $100,000?
I went to my local bank on a Monday morning. There was a guy there you was screaming. I found out that the bank failed Friday night and was taken over by another bank.
On Friday afternoon he had deposited a check for $130,000 for something he sold. He found out Mondat AM that he was only being credited for $100,000. He was out $30,000. I can hear him screaming now – “Why didn’t you tell me thjat Friday afternoon that the bank was closing? You are !@#$%^&”.
So to some people these statistics are fun and to others they are costly.
Bill Snider
It is important to understand the FDIC rules. There are ways to increase your protection/limits.
That’s painful. I’m not sure how you could avoid that, unless you have the money wired and instantly wire out anything about $100k.
You are covered to the limit for each unique owner/AccountType. If you have a checking with 100k and a savings with 100k, you are covered fully. OR, if you are married… you have an account with 100k, your wife has a different acct with 100k and you have a joint acct with 100k… total of 300k covered by FDIC for you and your wife.
In this man’s case, he could have opened a different acct type, opened an acct with different acct owner or gone to a second bank.
(This is my understanding from other posts and reading. Someone can correct me if they think I am wrong. I know the limit is now higher than 100k, it is just very easy to type.)
Your train of thought is correct.
However in this guys case, he did not realize that the bank was failing that night. He would not have put any money into this account.
Bet that he is not the first nor the last person this has happended too. That is why you should check your bank status at http://www.bauerfinancial.com
Bill Snider
The bank itself doesn’t know when the seizure will happen, only that they’ve been put on “watch.” If they tell people they’re on watch, it’s a self-fulfilling prophecy…
The only moral of that story is that poor bank tellers get a lot of crap they don’t deserve.
Wow, that’s interesting. I didn’t realize bank closures were so prevalent. I guess most of the smaller ones fly under the radar and the media only publicizes the really big ones.
One thing to note about the states with no bank failures since 2000 is that they have low populations. The largest state is MS with fewer than 3M. Most have fewer than 1M.
Right – it would be interesting to run some per-capita statistics. I knew California was going to rank high in these facts, simply because it’s got a huge population.
… and it’s BROKE and can’t seem to get a budget passed on time, which only adds to its indebtedness.
I am a little surprised that Alpharetta, GA has had that many bank failures. As an Atlanta resident, the Alpharetta area has appeared largely unaffected by the economy. Every time I head up to visit my parents and go out to dinner, everywhere is packed. That said, I had noticed a trend of smaller banks popping up in the area.
Are there certain state laws that predispose banks in states like Georgia or Illinois to closure? It seems strange that so many would come from the same states while some states wouldn’t have any at all.
Fact number 7 was most interesting to me. I like trivia
That’s interesting that they seize banks on Friday. You don’t really think about how often banks fail until you see facts like these.
Anyone interested in the mechanics of taking over a bank should listen to the podcast Planet Money. I believe it was a joint story with This American Life (another great podcast).
They had a story where they followed a team of FDIC officials who took over a bank in Washington state. It was one of the most interesting stories they have had. Recently, they did a followup on some of the people in the original story and most people turned out pretty well.
Just in case anyone was wonder why banks are usually taken over on Fridays
“According to Bair, “The FDIC and the bank are putting together the merger of financial institutions in the matter of a weekend.” The goal is to open for business by Monday with new management in place. The three day weekend gives the FDIC the best chance to ensure an orderly sale of assets and a smooth transition. This involves transferring assets, communicating with employees, and merging operations. The FDIC’s goal is to have the financial institution open for business the next business day. The fact that this process can take place in just 3 days is pretty remarkable. So, as you can see the best time for the FDIC to announce these banking failures is on Fridays after the close of business.”
Added benefit is that they put the press release on a Friday night when most people are not paying attention to the markets. It prevents a run on the bank. (FDIC claims otherwise but come on
)
http://www.istockanalyst.com/article/viewarticle/articleid/4060688
What is really interesting is Senator Johnny Isakson, U.S. Senator from Georgia don’t like FINREG. I guess if the banks in his state couldn’t survive before FINREG, they might not have a chance AFTER FINREG!!! Boo Hoo!