New record: nearly one-fourth of N.C. state-chartered banks 'troubled'

More than one-fourth of North Carolina's 88 state-chartered banks are on N.C. regulators' list of troubled institutions, a record number, at least in recent history.

The tally of 23 troubled banks compares with six about two years ago, said Ray Grace, the N.C. deputy banking commissioner who heads bank supervision. Typically, he said, only two or three are on the list.

While acknowledging banks face serious issues, Grace doesn't expect a spate of failures.

"Most of our banks are in pretty good shape," he said. "People don't need to get panicky."

The figures provide a rare look at the potent economic forces hitting banks. Job losses, the real estate slump and struggling businesses have made it harder for consumers and companies to repay mortgages, credit cards and other debt. The credit crunch has also made it harder to get loans.

"I knew it was bad," said Tony Plath, a UNC Charlotte banking professor, who was surprised by the count. "I didn't know it was that bad."

The commission does not release names of troubled banks. State-chartered banks are typically community, midsize and regional banks. The state's largest is BB&T, based in Winston-Salem, which passed the federal government's worst-case scenario stress test this year and has repaid federal bailout dollars.

National firms, such as Bank of America, are not regulated by the state and so could not be on its troubled list. Federal regulators also do not identify problem banks or break out the number by state or region.

Regulators don't name the banks because of the risk there would be a "run" on deposits, which could prevent banks from working through problems. The N.C. Banking Commission's Web site says: "Most troubled banks do not fail."

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