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.
Key Takeaways
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.
Only institutions that are insured by the FDIC through the Deposit Insurance Fund are on the FDIC Problem Bank List.
If problems continue with a listed bank, the FDIC takes control of it, before selling it to a stronger bank, or liquidating it and refunding the depositors.
Understanding FDIC Problem Bank List
To make the FDIC problem bank list, a bank must have financial, managerial or operational weaknesses that threaten its continued financial viability. Only institutions that are insured by the FDIC through the Deposit Insurance Fund are on the FDIC Problem Bank List. If problems continue with a listed bank, the FDIC takes control of it, before selling it to a stronger bank, or liquidating it and refunding the depositors.
The criteria to gauge the solvency of the member banks is based on the FDIC's CAMELS rating system. CAMELS is an acronym for:
Since making this information public might start runs on banks, the names of the banks are withheld from the list. While the FDIC Problem Bank List is not available to the public, the FDIC does make public how many institutions are on the list as part of its wider banking survey.
The FDIC Problem Bank List includes data for net interest margins, net income, and net trading revenue. It also includes data on lending levels (outstanding loans) and asset quality — such as the level of nonperforming assets, net charge-offs (actual loan losses), and loan loss provisions.
FDIC Problem Bank List and Bank Failures (2001 - 2020)
At the peak of the financial crisis in 2009, there were nearly 900 troubled institutions on the FDIC Problem Bank List. By 2018, this had fallen below 100.
As expected, there is a strong correlation between the FDIC Problem Bank List and the actual number of bank failures. According to FDIC, a look at bank failures since 2001 shows that the peak was reached in 2010, when 157 FDIC insured banks failed as a result of the 2008 financial crisis. With that number dwindling to 0 by 2018, though it showed a slight uptick to 4 in 2019.
On March 10, 2023, the FDIC took control over California-based Silicon Valley Bank and its $212 billion in assets. The bank had suffered a sustained bank run after losing nearly $2 billion on the sale of its Treasury portfolio. Many of the bank's clients were start-ups or tech companies with deposits much higher than the FDIC's insurance limit.
Rather than limit coverage to the $250,000 limit, the FDIC announced that all depositors would be made whole, a message intended to calm the rumors of an oncoming banking panic. A second institution, Signature Bank in New York, was also placed in receivership with the same protections.
What Does the FDIC Insure?
The FDIC, or Federal Deposit Insurance Corporation, provides insurance on bank deposits in the event of bank failure. The funds for this insurance are provided by member banks, which pay into a special insurance pool.
How Much Does the FDIC Insure?
Bank deposits at FDIC-insured institutions are guaranteed up to at least $250,000 at each institution. Note that this protection is per person, not per account. If a single person has multiple accounts at the same bank, they will only receive up to $250,000 in guaranteed deposit insurance.
What Happens if a Bank Goes Bankrupt?
If an FDIC-insured bank fails, the FDIC will place that institution in receivership and take control of its assets. Deposits are guaranteed up to $250,000 per customer, but uninsured deposits may be recouped through the liquidation of the bank's assets. The FDIC may also choose to extend deposit protection beyond the $250,000 limit, as it did in 2023 with the collapse of Silicon Valley Bank.
The Bottom Line
The FDIC Problem Bank List is used to keep track of depositary institutions at high risk of insolvency. This is based on criteria like the quality of the bank's assets, capital adequacy, and the strength of its management team. Although the banks on the list are confidential, the FDIC does publish the number of banks on the list and the size of their assets.
The FDIC Problem Bank List is used to keep track of depositary institutions at high risk of insolvency. This is based on criteria like the quality of the bank's assets, capital adequacy, and the strength of its management team.
In American finance, the FDIC problem bank list is a confidential list created and maintained by the Federal Deposit Insurance Corporation which lists banks that are in jeopardy of failing.
If your bank fails, up to $250,000 of deposited money (per person, per account ownership type) is protected by the FDIC. When banks fail, the most common outcome is that another bank takes over the assets and your accounts are simply transferred over.
Not all banking institutions are insured by the FDIC. Eligible bank accounts are insured up to $250,000 for principal and interest. The FDIC doesn't insure share accounts at credit unions.
It indicates an expandable section or menu, or sometimes previous / next navigation options. Your money is safe in a bank, even during an economic decline like a recession. Up to $250,000 per depositor, per account ownership category, is protected by the FDIC or NCUA at a federally insured financial institution.
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.
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.
Investment products that are not deposits, such as mutual funds, annuities, life insurance policies and stocks and bonds, are not covered by FDIC deposit insurance.
Money market accounts are worth considering as well; they're FDIC-insured, and combine features of checking and savings accounts. U.S. government securities—such as Treasury notes, bills, and bonds—have historically been considered extremely safe because the U.S. government has never defaulted on its debt.
So, no, your loans aren't forgiven if your lender goes bankrupt. You're still responsible for making payments, the only difference is that you'll be sending payments to another institution instead of the one that originally gave you the loan.
Of course, the bank must return any remaining funds in your account but may hold on to them to cover any negative balance or fees. In some cases, the bank may hold the funds if your account is flagged for suspicious activities, which is increasingly common.
Millionaires can insure their money by depositing funds in FDIC-insured accounts, NCUA-insured accounts, through IntraFi Network Deposits, or through cash management accounts. They may also allocate some of their cash to low-risk investments, such as Treasury securities or government bonds.
The FDIC insures up to $250,000 per account holder, insured bank and ownership category in the event of bank failure. If you have more than $250,000 in the bank, or you're approaching that amount, you may want to structure your accounts to make sure your funds are covered.
At the end of the business day, the private bank, as custodian of their various accounts, sells off enough liquid assets to settle up for that day. Millionaires don't worry about FDIC insurance. Their money is held in their name and not the name of the custodial private bank.
Since making this information public might start runs on banks, the names of the banks are withheld from the list. While the FDIC Problem Bank List is not available to the public, the FDIC does make public how many institutions are on the list as part of its wider banking survey.
Historically, small banks are more likely to fail than large banks because they concentrate on regional lending, have fewer revenue streams to diversify risk and possess less capital to absorb losses. However, robust regulatory oversight and FDIC insurance help mitigate the risk to depositors.
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