March 23--Illinois ranks second nationally in the number of banks operating under severe restrictions, with regulators finding shortcomings with 40 institutions in the state.
Georgia was home to 44 banks and thrifts under a severe enforcement action as of mid-March, followed by Illinois and Florida, with 38 operating under restrictions, according to a report released Monday by SNL Financial. Such actions typically require banks to improve their operations or raise capital.
Illinois' ranking can be explained in large part by the sheer number of banks in the state.
Among states with bigger populations, for example, only Texas comes close to Illinois' 521 banks.
Rhode Island banks, however, remained the most affected proportionally, with four of its 10 banks under severe enforcement actions, according to SNL Financial, a collector of banking industry data.
Overall, SNL Financial's study shows that the banking industry continues to recover.
Regulators issued six enforcement actions to banks and thrifts in January. That was among the lowest number of issuances during a month since the credit crisis began. In 2007, federal regulators issued two severe enforcement actions in January and the number peaked at 69 in 2010.
Overall, the number of banks and thrifts operating under enforcement actions was 436 as of mid-March, down from 662 at the end of 2013 as banks' credit quality and capital levels improve.
byerak@tribpub.com
