FDIC's Problem Banks List Balloons

Banks and thrifts insured by the Federal Deposit Insurance Corp. recorded their second-lowest level of earnings since 1991 during the most recent quarter, while the number of banks noted on the FDIC's "problem list" jumped 30%, according to new data published Tuesday.

According to FDIC quarterly figures, insured commercial banks and savings institutions posted a profit of just $5 billion in the second quarter, the second-lowest quarterly total in 17 years and 86.5% less than the industry earned in the second quarter of 2007. Nearly 18% of all insured institutions were unprofitable last quarter, just about double the amount of unprofitable banks in the same period the prior year.

"By any yardstick it was another rough quarter," for bank earnings, FDIC chairman Sheila Bair said in a statement to the press that was also Webcast. With the exception of the fourth quarter, "[i]t was the worst quarter for bank earnings since 1991." ...