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FDIC: Fewer Banks Now Than During The Great Depression
WASHINGTON (12/4/13)--The quantity of banking institutions has fallen to its lowest level since the Great Depression, according to a report published by the Federal Deposit Insurance Corp.

The number of federally insured financial institutions in the U.S. shrank to 6,891 in the third quarter, falling below 7,000 for the first time since the federal government started keeping track of the data in 1934.
 
Smaller institutions are bearing the brunt of the woes, with banks holding less than $100 million in assets constituting most of the industry's exits between 1984 and 2011. Mergers, consolidations and failures caused the closure of 10,000 banks, with about 17% of closures attributed to collapse, said the FDIC.
 
SNL Financial, a bank data-tracking firm, said that banks with less than $100 million in assets saw a median loan-growth of 2% for the year ending Sept. 30. Banks with higher assets up to $10 billion are seeing growth in that area between 3.4% and 7% (The Wall Street Journal Dec. 3).
 
FDIC researchers found in December 2012 that the decreasing difference between interest charged on loans and interest paid on deposits particularly hurt community banks, which are dependent on conventional forms of retail banking.
 
New banks aren't taking the place of the old ones either. A bank that opened in Bird-in-Hand, Pa. on Monday was the first bank start-up in the U.S. since December 2010, the FDIC said.
 
The federal regulatory body's data also showed the number of branches dropped by 3.2% between the end of 2009 and June 30 of this year, despite an upward trend in bank deposits and assets.
 
Bankers and industry consultants who spoke to The Wall Street Journal attributed the decline to meager profit margins and regulatory costs imposed after the 2008 financial crisis. The newspaper reported FDIC officials saying that the application has always been "rigorous," and that the agency expects the volume of applications to pick up in step with nationwide economic expansion.


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