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Four Too Big To Fail Banks Set Multi-Year Highs

While this continues to show a more healthy banking system, it's a question of whether the glass is half full or half empty. Let's look at the Q3 2013 statistics vs. the statistics in Q4 2007.

Number of Banks The number of FDIC-insured financial institutions declined by 1,643 since the end of 2007 to 6,891 at the end of the third quarter of 2013. That's a decline of 19.3% with 488 of the decline done via the FDIC bank failure procedures.

Total Assets Despite the Great Credit Crunch total assets in the banking system increased by $1.56 trillion since the end of 2007, up 11.9% to $14.6 trillion.

Residential Mortgages declined by $403.9 billion since the end of 2007, a slide of 18%.

Nonfarm Nonresidential Real Estate Loans increased by $124.1 billion since the end of 2007 a gain of 12.8%. This segment of CRE loans have been deemed less risky.

Construction and Development Loans declined by $422.8 billion since the end of 2007, a whopping 67.2%. This is the real estate segment that took the deepest hits with much of this risk among community and regional banks.

Home Equity Loans declined by $89.6 billion since the end of 2007. It has been difficult for banks to collect on bad home equity loans if the bank does not control the first lien mortgage.

Total Real Estate Loans declined by $792.2 billion since the end of 2007, down 17.8%.

Other Real Estate Owned while declining significantly in recent quarters this category is still up $19.7 billion since the end of 2007, up 162.1%. This includes a hidden inventory of foreclosed homes.

Notional Amount of Derivatives many of the problems that surfaced during the Great Credit Crunch occurred in derivatives, yet the banking regulators have allowed this category to rise by $76.8 trillion since the end of 2007, or by 46.2%.

Deposit Insurance Fund The DIF balance rose to $40.8 billion in the third quarter of 2013 but its down $11.6 billion or 22.2% since the end of 2007. Member banks are the major source of these funds via assessments.

Insured Deposits increased by $1.677 trillion or 39.1% since the end of 2007, and if this growth continues the DIF pressures intensify.

Reserves for Losses while declining nicely in recent quarters; reserves are still up $40.9 billion since the end of 2007, up 40.2%.

Noncurrent Loans have declined significantly in recent quarters, but are still up $111.2 billion since the end of 2007, a gain of 101.1%. This is a sign that the Great Credit Crunch continues.

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Stock quotes in this article: BAC, C, JPM, WFC 
Richard Suttmeier is the chief market strategist at AlphaPlus Analytics in addition to He has been a professional in the U.S. Capital Markets since 1972, transferring his engineering skills to the trading and investment world.

Suttmeier has an engineering degree from Georgia Tech and a Master of Science degree from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. He became the first long bond trader for Bache in 1978, and formed the Government Bond Department at LF Rothschild in 1981, helping establish that firm as a primary dealer in 1986. This experience gives him the insights to be an expert on monetary policy, which he features in his newsletters, and market commentary.

Suttmeier's industry licenses include, Series 7 and Registered Principal (Series 24). He has been the Chief Market Strategist for since 2008 and often appears on financial TV.

Click here for details on Suttmeier's "Buy and Trade" investment strategy.

Richard Suttmeier can be reached at

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