How often to US banks collapse? SVB is the exception, not the rule.

The high-profile collapses of Silicon Valley Bank and Signature Bank have garnered national attention on the security of U.S. financial institutions and raised questions like how often do banks fail? 

Banks may implode more frequently than you might think, but it depends on how you measure the failures.

Since 2001, 563 banks have collapsed, an average of about 25 banks per year, according to data from the Federal Deposit Insurance Corp., which insures deposits and provides other protections to financial institutions.

However, the largest number of failures, 389, took place from 2009-2011 during the Great Recession and its aftermath.

In 22 years, 563 US banks have failed

But less than 1% of FDIC-insured banks have failed annually over the past decade, according to an analysis of FDIC data.

The number of bank collapses dwindled to pre-Great Recession levels and vanished in 2021 and 2022.

It’s possible that the two-year pause lulled customers into a false sense of security, Marc Rubinstein, a former hedge fund manager wrote in an opinion piece for Bloomberg. There were 868 days between the Silicon Valley Bank failure and that of Almena State Bank in Kansas, on Oct. 23, 2020.