The Washington Post reports that 2010 brought the largest number of bank failures since 1992.

The total comes to 157 this year, the most since the savings & loan crisis. The Federal Insurance Deposit Corporation (FDIC) lists 16 Illinois banks with 2010 closure dates.

The list of failed institutions at the FDIC is filled with community banks that would not be considered “too big to fail.”

The loans that brought them down were predominantly commercial loans, Hernandez said, which sets them apart from the banking giants whose problems were rooted in home mortgages.

About half of the the 2010 failures involved banks headquartered in four states: California, Florida, Georgia and Illinois.

Bank financial strength, like employment, reportedly lags other indicators of economic recovery. Experts quoted in the WaPo article see 2010 as getting us “over the hump” and predict fewer bank failures for 2011.

However, FDIC reports that 860 banks in the U.S. were on a “problem bank” watch list as of the end of September and that historically, about 20% of problem banks fail (which would be 172, but not all would close in 2011, presumably). FDIC does not publish the watch list.

The bank regulatory roles of FDIC, Office of the Currency Comptroller (OCC) and Office of Thrift Supervision (OTS) were summarized in a previous CB posting.

OCC local enforcement actions in 2010:

Resource Bank: Comptroller of the Currency “found unsafe and unsound banking practices relating to credit administration at the Bank” and the February Agreement specifies actions to be taken in regards to commercial loan risk management.

Castle Bank: The Agreement imposed June 2009, which addresses a half-dozen areas of practices deemed unacceptable by OCC, was terminated November 1 as a result of the merger of the institution with First National Bank of Omaha.