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Number of problem banks declines in fourth quarter of 2012

FDICThe number of banks listed on the FDIC’s Problem Bank List fell for the seventh straight quarter, from 694 in the third quarter of last year to 651 in the fourth quarter.

While the banking industry has seen significant recovery, the number of banks on the problem list remains at a historical high. Before the financial crisis, the number was relatively low compared to the number of FDIC-insured institutions. More than five years after the beginning of the financial crisis, however, nearly one out of every 10 FDIC-insured institutions remains on the list, according to Problem Bank List.

The total assets of problem banks fell by 11.3 percent, or $29.5 billion, in the fourth quarter to $232.7 billion. The number of FDIC-insured institutions declined by 99 in the fourth quarter as a result of the failure of eight banks and a number of acquisitions and mergers.

U.S. banks have declined in number over the past 10 years. In 1996, there were more than 11,450 FDIC-insured institutions. At the end of last year, the number of FDIC-insured banks had decreased by 38 percent to 7,083 banks, Problem Bank List reports.

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