Bank Failures Roared in 2010

NEW YORK (TheStreet) -- Bank failures continued to increase during 2010, with 157 institutions with total assets of $97 billion being shuttered by regulators.

The four leading states for bank failures during 2010 were the same as 2009, although Florida moved into the lead with 29 bank and thrift closures, followed by Georgia with 21, Illinois with 16 and California with 12 failures.

Most of the failed banks were previously included in TheStreet's Bank Watch List of undercapitalized institutions, which is based on quarterly regulatory data provided SNL Financial, and is updated twice each quarter.

Looking at total assets of failed banks, the leading state was Puerto Rico, which saw three bank failures all on April 30, with combined total assets of $20.4 billion. These included Westernbank Puerto Rico, which had $11.9 billion in total assets when it was shut down by commonwealth regulators and sold by the Federal Deposit Insurance Corp. to Banco Popular de Puerto Rico, the main subsidiary of Popular, Inc. (BPOP)

The deal was a fantastic one for Popular, with the FDIC agreeing to cover 80% of losses on $8.8 billion in assets acquired from the failed bank. Popular was featured as one of the winners of TheStreet's 2010 Bank Stock Awards. Three other winners of 2010 Bank Stock Awards benefitted from acquisitions of failed institutions, including Bank of the Ozarks (OZRK), which bought four failed banks from the FDIC, Oriental Financial Group (OFG) of San Juan, Puerto Rico, which acquired its failed competitor Eurobank of San Juan, and East West Bancorp (EWBC) of Pasadena, Calif., which bought the failed Washington First International Bank in June.

Among the more actively traded holding companies making more than one acquisition of a failed bank during 2010, were FirstMerit (FMER), which acquired George Washington Savings Bank of Orland Park, Ill. in February and Midwest Bank & Trust of Elmwood Park, Ill. in May, and MB Financial (MBFI), which purchased New Century Bank and Broadway Bank, both of Chicago and both failing on April 23 .

Home Bancshares (HOMB) of Conway, Ark. Acquired six failed Florida institutions, including Old Southern Bank of Orlando and Key West Bank in March, Coastal Community Bank of Panama City and Bayside Savings Bank of Port St. Joe both on July 30, Wakulla Bank of Crawfordville in October and Gulf State Community Bank of Carrabelle in November.

In comparison, there were 140 bank closures in 2009, although the combined total assets of the failed institutions was a much higher $171 billion.

There were "only" 25 bank failures during 2008, but since one of these was Washington Mutual Bank - the largest bank or thrift failure in U.S. history - the combined total assets for failed banks that year was $372 billion.

After being taken over by the Office of Thrift Supervision, Washington Mutual Bank was sold by the FDIC to JPMorgan Chase (JPM) for $1.9 billion, with the FDIC not providing any loss-sharing or incurring costs to its deposit insurance fund.

Thorough Bank Failure Coverage

All bank and thrift closures since the beginning of 2008 are detailed in TheStreet's interactive bank failure map:

The bank failure map is color-coded, with the states having the greatest number of failures highlighted in dark gray, and states with no failures in light green. By moving your mouse over a state you can see its combined 2008-2010 totals. Then click the state to open a detailed map pinpointing the locations and providing additional information for each bank failure.

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-- Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.