Bank, S&L; Failures Lower, but Rise Forecast for 1991
The number of bank and savings institution failures declined in 1990 for the first time in seven years, but the foundering economy may prevent any sustained improvement.
In 1990, 169 commercial and savings banks failed, including one bank that remained open only with an infusion of government cash, the Federal Deposit Insurance Corp. said Monday.
In addition, 211 savings and loans became insolvent, the Resolution Trust Corp. said. That included 207 seized by the government and put into conservatorship and four kept open with taxpayer money.
The failure total in 1990--380--represents a 29% drop from 535 in 1989, a post-Depression high. It marks the first decline since 1983, when 84 of both types of institutions failed, compared to 105 the previous year.
Analysts, however, are drawing no encouragement from the improvement. The sharp deterioration in real estate values, particularly in New England and New York and New Jersey, has yet to make a full impact on the failure rate, they said. Nor have the effects of the economic slowdown since the summer.
“1990 in a way was really a lull year,” said financial institutions analyst Bert Ely of Alexandria, Va. “Every indication is that in 1991 we’re going to see a significant increase.”
The geographic pattern of failures shows that they reflect old problems from the mid-1980s in oil-producing states in the Southwest rather than new problems in the Northeastern states, where real estate markets are weakest, he said.
Although 1990’s failures were spread among 38 states and the District of Columbia and Puerto Rico, more than a third--140--were in Texas.
Ten other states had 10 or more failures. They were California and Florida, 21 each; Illinois, 18; Louisiana, 17; New Jersey, 14; Oklahoma, 13; New York, 12; Massachusetts and Colorado, 11, and Mississippi, 10.
BANK AND S&L; FAILURES Here is a state-by-state breakdown of bank and S&L; failures in 1990.
State Bank S&L; Total Alabama 0 2 2 Alaska 0 0 0 Arizona 5 3 8 Arkansas 1 5 6 California 4 17 21 Colorado 7 4 11 Connecticut 1 2 3 Delaware 0 0 0 D.C. 1 0 1 Florida 7 14 21 Georgia 0 2 2 Hawaii 0 0 0 Idaho 0 0 0 Illinois 0 18 18 Indiana 0 1 1 Iowa 0 4 4 Kansas 1 3 4 Kentucky 1 1 2 Louisiana 4 13 17 Maine 0 1 1 Maryland 0 3 3 Mass. 7 4 11 Michigan 0 0 0 Minnesota 1 3 4 Mississippi 0 10 10 Missouri 1 5 6 Montana 0 0 0 Nebraska 0 3 3 Nevada 0 1 1 N.H. 1 0 1 New Jersey 2 12 14 New Mexico 2 4 6 New York 5 7 12 N. Carolina 0 4 4 N. Dakota 3 2 5 Ohio 1 5 6 Oklahoma 10 3 13 Oregon 0 2 2 Pennsylvania 0 4 4 Puerto Rico 0 1 1 Rhode Island 0 0 0 S. Carolina 0 0 0 S. Dakota 0 0 0 Tennessee 1 2 3 Texas 103 37 140 Utah 0 2 2 Vermont 0 0 0 Virginia 0 3 3 Washington 0 1 1 West Virginia 0 2 2 Wisconsin 0 0 0 Wyoming 0 1 1 Total 169 211 380
