List of Failed Banks in the United States 2023 [Recent]

In this blog post, we will be reviewing the list of failed banks in the United States. It’s never good news when we hear about a bank failure, and unfortunately, there have been quite a few in the United States over the years. From Washington Mutual and IndyMac in 2008 to Guaranty Bank and First NBC Bank in 2017, these failures can have a big impact on customers, employees, and the economy as a whole. While there are often warning signs leading up to a bank failure, it can still be a shock and a disappointment to those affected.2

It’s important to remember, though, that the government has systems in place to help protect customers’ deposits and ensure that the banking industry remains stable overall. Banks are an important part of our financial system, but unfortunately, they can fail from time to time. There are a few reasons why this might happen. One common cause is undercapitalization, which means that the bank doesn’t have enough money to cover its obligations.

Another factor is loan quality – if a bank makes too many bad loans, it can end up losing a lot of money. Additionally, losses on investment securities can also contribute to a bank’s failure. When a bank fails, it can have a ripple effect on the economy and on the people who have accounts with that bank. That’s why it’s important for regulators to keep a close eye on banks and step in when necessary to prevent failures from happening.

ALSO READ: Which Banks Are in Danger of Failing or Collapse? 

According to recent reports, some banks failed in March 2023 due to their exposure to the cryptocurrency market. Specifically, several large banks in the United States had gained market exposure to cryptocurrency and cryptocurrency-related firms prior to and during the COVID-19 pandemic. Among these banks were Silvergate Bank, Silicon Valley Bank, and Signature Bank, which collapsed in March 2023  Additionally, undercapitalization, loan quality, and losses on investment securities are common reasons why banks may fail.

To prevent bank failures, regulators closely monitor banks and enforce regulations to ensure that they are adequately capitalized and managing risk appropriately. In addition, deposit insurance programs such as the Federal Deposit Insurance Corporation (FDIC) in the United States help protect customers’ deposits in the event of a bank failure.

ALSO READ: Banking Crisis Explained: Causes of Bank Collapse & its Prevention

First Republic Bank, a bank that catered to wealthy clients, has failed due to its susceptibility to sudden interest rate increases and the withdrawal of deposits from fearful clients. JPMorgan Chase acquired the bank’s deposits and assets through a purchase and assumption agreement, and its stockholders were wiped out. Depositors are protected by the FDIC’s insurance fund, but taxpayers are not on the hook for the bank seizure.

Timeline of Events of This Recent Bank Failure:

1. First Republic Bank, San Francisco, California, closed by the California Department of Financial Protection and Innovation, which appointed the FDIC as the receiver.
2. JPMorgan Chase Bank, National Association submitted a bid for all of First Republic Bank’s deposits.
3. First Republic Bank’s 84 offices in eight states will reopen as branches of JPMorgan Chase Bank, National Association, today during normal business hours.
4. All depositors of First Republic Bank will become depositors of JPMorgan Chase Bank, National Association, and will have full access to all of their deposits.
5. Deposits will continue to be insured by the FDIC, and customers do not need to change their banking relationship to retain their deposit insurance coverage up to applicable limits.
6. JPMorgan Chase Bank, National Association, agreed to purchase substantially all of First Republic Bank’s assets.
7. The FDIC and JPMorgan Chase Bank, National Association, are entering into a loss-share transaction on single-family, residential, and commercial loans purchased from the former First Republic Bank.
8. The FDIC estimates that the cost to the Deposit Insurance Fund will be about $13 billion.

List of Banks Examined for CRA Compliance – March 2023

The FDIC has issued its latest list of state nonmember banks that have been evaluated for compliance with the Community Reinvestment Act (CRA). The list contains evaluation ratings assigned by the FDIC to institutions in December 2022.

The CRA is a law that was passed in 1977 to encourage insured banks and thrifts to meet local credit needs, including those of low- and moderate-income neighborhoods, while also maintaining safe and sound operations. As part of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), Congress mandated that a rating and evaluation for each bank or thrift that undergoes a CRA examination on or after July 1, 1990, be made publicly available.

The list issued by the FDIC provides transparency and accountability in the banking industry by making these evaluation ratings publicly available. The purpose of this list is to provide the public, account holders, investors, and other stakeholders with valuable information on how banks are serving their local communities, particularly those in need. This information can help individuals make informed decisions about where to do business and can ensure that banks are held accountable for meeting their obligations under the CRA.

For account holders, the list can provide valuable insights into how their bank is performing in terms of CRA compliance. Customers who prioritize banking with institutions that are committed to serving the credit needs of their local communities may find this information particularly helpful.

In addition, the CRA evaluation ratings can help investors, community organizations, and other stakeholders assess the performance of individual banks in meeting the credit needs of their local communities. This can help to identify areas where improvement is needed and encourage greater investment in underserved communities.

To obtain a consolidated list of all state nonmember banks whose evaluations have been made publicly available since July 1, 1990, including the rating for each bank, individuals can contact the FDIC’s Public Information Center or visit their website. A copy of an individual bank’s CRA evaluation is available directly from the bank or from the FDIC’s Public Information Center, as required by law.

List of Recent Failed Banks [2021 – 2023]

List of Recent Failed Banks [2015 – 2020]

List of Failed Banks [2013 – 2014]

List of Failed Banks [2011 – 2012]

Sources:

• https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/
• https://www.fdic.gov/news/press-releases/2023/pr23015.html
• https://www.fdic.gov/news/press-releases/2023/pr23034.html