NEW YORK – The Federal Deposit Insurance Corp. says its list of problem banks, those considered to be in trouble, shot up to 171 during the third quarter. That's up nearly 50 percent from 117 in the second quarter, and the highest number since late 1995.
The FDIC also says 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.
The report is yet another sign of growing troubles in the U.S. banking industry. Late Sunday, Citigroup Inc. got a government backstop for $306 billion worth of mortgages and other assets. On Tuesday, the Federal Reserve agreed to buy up to $600 billion in mortgage-backed assets.