In the days of doubt and anxiety following the stock-market crash, U.S. banks got a public vote of confidence as Americans rushed to put more of their money into nice, solid, federally insured savings and checking accounts. That was a far cry from the 1920s and '30s, when frightened investors hustled to their banks and clamored to withdraw their money. But even though angry mobs are rarely battering at their doors, today's banks and thrifts are being rocked by tremors just as dangerous as those of half a century ago.
Bad loans and rising competition are choking the profits of America's...