- The Washington Times - Wednesday, November 26, 2008

NEW YORK | The Federal Deposit Insurance Corp. said Tuesday the list of banks it considers to be in trouble shot up nearly 50 percent to 171 during the third quarter - yet another sign of escalating troubles among the institutions controlling Americans’ deposits.

In the second quarter, 117 FDIC-insured institutions were on the list. Now, at 171, the number of institutions on the FDIC’s “problem list” is at its highest level since late 1995.

“We’ve had profound problems in our financial markets that are taking a rising toll on the real economy,” FDIC Chairman Sheila Bair said.

Total assets held by troubled institutions climbed from $78.3 billion to $115.6 billion — a figure that suggests the nation’s top 20 banks aren’t on the list, even though they are getting slammed, too, by the growing credit crisis. The FDIC does not reveal the institutions it deems troubled.

On average, about 13 percent of institutions on the FDIC’s list end up failing.

Banks that don’t make the list can end up collapsing anyway - the two biggest bank failures over the past year, Washington Mutual Inc. and IndyMac Bancorp, had not been on the FDIC’s list of troubled banks. Wachovia Corp., which nearly failed before it was bought by Wells Fargo & Co. in October, had not been on the list, either.

Nine banks failed in the third quarter, decreasing the FDIC’s deposit insurance fund to $34.6 billion from $45.2 billion in the second quarter.

The FDIC also said Tuesday that commercial banks and savings institutions suffered a 94 percent drop in third-quarter profits to $1.7 billion from $27 billion in the same period last year.

Except for the fourth quarter of 2007, it was the lowest quarterly profit since the fourth quarter of 1990.

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