Th e prospects looked good too, with all the major indicators above historical averages, and well in excess of the requirements for well-capitalized banks (Table 3.1).

As late as the fall of 2006, the regulators in their quarterly report focused on the strong earnings and revenues, the fast asset growth, the robust capital indicators, and the all-time low achieved by the noncurrent loan rate (FDIC, 2006). Industry analysts concurred. “Th e U.S. banking industry is entering 2006 in a relatively healthy condition,” noted the rating fi rm A.M. Best in its annual review (Best, 2006). And indeed, no banks failed in 2006 either, for the second time ever.