Number of U.S. Banks Collapsing in 2025
Since the turn of the century, bank failures in the United States have been influenced by economic conditions and regulatory changes. The 2010 Dodd-Frank Act, introduced in response to the 2008 financial crisis, brought about stricter bank oversight, including stress tests for systemically important financial institutions and limits on risky activities like proprietary trading.
However, some of these regulations were rolled back starting in 2018, a move that some economists argue may have contributed to the 2023 collapse of Silicon Valley Bank, the third largest bank failure in US history.
Fast forward to 2025, and the banking sector continues to face challenges. While specific data on the number of bank failures in 2025 is not yet available, the context suggests ongoing issues influenced by both regulatory dynamics and economic factors.
The year has already seen two bank failures. The first was Pulaski Savings Bank in Chicago, Illinois, which closed in January with assets of roughly $49.5 million and deposits of roughly $42.7 million. The second failure occurred at Santa Anna National Bank in Santa Anna, Texas, which closed in June with assets of approximately $63.8 million and deposits of approximately $53.8 million.
These failures continue a downward trend from the 570 bank failures recorded between 2001 and 2025, but they are much smaller in scale compared to the high-profile collapses seen in 2023, such as Silicon Valley Bank, Signature Bank, and First Republic Bank.
The causes of these failures are varied, including unrealized losses on securities, commercial real estate loan pressure, profitability squeeze, slower economic growth, shrinking net interest margins, high deposit costs, geopolitical risks and global trade tensions, regulatory challenges, and internal bank operations.
The failures have shaken investor confidence, and the FDIC's ability to keep pace with these challenges should be closely watched for the rest of 2025. The FDIC, responsible for insuring deposits in banks, is currently facing a potential increase in bank failures due to further interest rate hikes, continued issues with commercial real estate loans, the potential for bank runs, and the FDIC's ability to keep pace with these challenges.
Small businesses are advised to carefully consider their banking relationships and diversify where possible. Real estate investments can offer stability when financial markets falter.
For those interested in diversified, resilient real estate markets, Norada offers turnkey rental properties. It's crucial to stay informed and vigilant in these challenging times for the banking sector.
- The banking industry faces challenges in 2025, with two bank failures already recorded, which has shaken investor confidence.
- The FDIC, responsible for insuring deposits in banks, is currently facing a potential increase in bank failures due to further interest rate hikes, continued issues with commercial real estate loans, the potential for bank runs, and the FDIC's ability to keep pace with these challenges.
- The failures in the banking sector highlight the importance of diversifying financial investments, such as considering real estate markets for stability when financial markets falter.
- Norada offers turnkey rental properties as a diversified, resilient investment option in real estate markets.
- The causes of these banking failures are varied, including unrealized losses on securities, commercial real estate loan pressure, profitability squeeze, slower economic growth, shrinking net interest margins, high deposit costs, geopolitical risks and global trade tensions, regulatory challenges, and internal bank operations.
- The growth of one's investment portfolio can be achieved through strategic investments in the real estate market, which can provide a steady stream of income from rental properties during challenging times in the banking and finance industry.
