Identifies the Most Dangerous States for Bank Consumers

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Fifty-five percent of U.S. bank failures in 2010 occurred in just five states. identifies the most dangerous states for banking and explains which location-based risk factors may contribute to bank failures, giving consumers one more factor to consider when choosing a safe place for their savings.

Bank failures have been highly concentrated in a few states. This means bank customers in some states have been virtually untouched by the crisis.

Today, releases a study on the most dangerous states for banking-- and the results mean that consumers need to consider more than savings account rates when choosing a bank. found that over half of bank failures in 2010 occurred primarily in just five states. The article discusses how location plays a role in bank closures and what that means for consumers.

A quick look at the concentration of bank failures across the U.S. paints a surprising picture. Out of 157 banks that failed last year, 89 were located in only five states. Although the factors that lead to individual bank failures are many and complex, location-based risk factors are also at play. According to, a poor economy, a decline in real estate values and negligent bank supervision can all be instrumental in the downfall of banks in a specific geographic area. Institutions that fail in these locations may not be able to fulfill the demands of depositors on time, leaving customers in a bind.

Richard Barrington, personal finance expert for, says, “The financial crisis has been generally seen as a national problem, but the fact is that bank failures have been highly concentrated in a few states. This means bank customers in some states have been virtually untouched by the crisis, while people in other states have seen a series of local banks go belly up.”

The most dangerous states for banking, according to highest number of bank failures in 2010, are:

1. Florida, 29 failures
2. Georgia, 21 failures
3. Illinois, 16 failures
4. California, 13 failures
5. Washington, 10 failures

The states with the highest bank failure rates in 2010, taking into account the total number of banks per state, are:

1. Washington, 9 percent
2. Florida, 8.6 percent
3. Nevada, 8 percent
4. Georgia, 6.5 percent
5. Oregon, 5.1 percent

Because Illinois and California have bigger banking markets, their comparatively low bank failure rates take them off of the second list. Nevada and Oregon have smaller banking markets, but their percentage of bank failures represented a large part of those markets.

In contrast, 33 states and the District of Columbia had a bank failure rate of less than 1 percent, and 20 states had no failures. Consumers that live in the most dangerous states may want to look for a bank with a headquarters located out of state.

The full article at has more information on where bank failures occur the most, the local risk factors involved in their failures and ways bank consumers can dodge the risk of a failing bank.

About has been a trusted source of information on personal finance, savings and investing since 1999. The website helps consumers find the highest savings account rates as well as checking account, CD and money market account rates. is regularly referenced by leading media outlets including the Wall Street Journal, New York Times, Barron's, USA Today, SmartMoney and U.S. News and World Report as a valuable resource for individual investors and consumers.

Jessica Cultra

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