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JPMorgan, U.S. Bancorp Grow as Banks Fail

JPMorgan has been the biggest beneficiary, acquiring Washington Mutual for $1.9 billion in September 2008 after it became the largest U.S. bank failure ever. JPMorgan bought the thrift's deposits, including uninsured balances.

U.S. Bancorp has acquired a dozen failed institutions, including the nine subsidiaries of FBOP of Chicago, which regulators closed on Oct. 30. BB&T has acquired two failed institutions, including Colonial Bank, which had $20 billion in deposits when it shut down on Aug. 14.

Looking for bargains among troubled regional holding companies hasn't been a bad strategy this year. Shares of Fifth Third Bancorp (FITB - Get Report), which has questionable asset quality and owes $3.4 billion in TARP money, have risen seven-fold since March 6. The stock is trading for more than its tangible book value.

Not all of the acquiring companies are out of the woods. Zions Bancorp (ZION - Get Report), for example, has bought three banks, including Vineyard National Bank, which closed on July 18. Zions subsidiary California Bank & Trust of San Francisco purchased $1.5 billion in deposits and $1.8 billion in assets from the failed institution, with the FDIC agreeing to share the losses on $1.5 billion of the acquired assets.

Excluding government-guaranteed balances, Zions' nonperforming assets ratio, which includes loans past due 90 days and repossessed real estate, was 4.9% as of September 30. The average ratio for all banks was 2.8% as of June 30, according to the most recent data available. Its annualized ratio of net charge-offs, or actual losses, to average loans was 3.6%, compared with 2.6% for the industry. The company owes the government $1.4 billion in TARP aid.

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