Banks With 20% Unpaid Loans at 18-Year High

The number of lenders in the United States with 20% of their loans more than 90 days overdue hit an 18-year high this week.

According to new data from the Federal Deposit Insurance Corp., there are 26 firms with more than a fifth of their loans 90 days overdue or not accruing interest as of June 30. Three reported almost half of their loans weren’t being paid.

Firms range in size from Frontier Bank in Everett in Washington, with $3.98 billion in assets, to Gordon Bank in Gordon in Georgia, with $35 million in assets. Six of the banks are in Florida and five in Illinois.

These banks are among the most vulnerable of a larger group of lenders whose failures the FDIC said could cost $100 billion by 2013.

A total of 95 banks have failed so far this year at the fastest pace in almost two decades. These failures have drawn the balance of FDIC’s deposit insurance fund to $0. In a frantic effort to raise funds, the agency proposed last week that financial firms prepay three years of premiums, which would add $45 billion of reserves.

The cost of this year’s failures to the FDIC equals 25% of the banks’ assets, according to agency data. Applying the same ratio to the $14.1 billion of assets held by the 26 lenders with 20% of their loans more than 90 days overdue means the FDIC could face additional losses of $3.5 billion.

In total, the FDIC counts 416 firms on its confidential list of "problem" lenders at mid-year, signaling that more bank failures and losses going forward.

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