Industry NewsMortgage

Banking industry back in the red

416 banks on FDIC 'problem list'

Learn the New Luxury Playbook at Luxury Connect | October 18-19 at the Beverly Hills Hotel

More than one in four banks insured by the Federal Deposit Insurance Corp. lost money during the second quarter, and the number of institutions on the government insurer's "problem list" grew to 416 -- the largest number in 15 years.A total of 81 insured banks and institutions have already failed this year, and the FDIC's Deposit Insurance Fund has dropped below the level mandated by Congress. That could force the FDIC to raise the fees banks pay for insurance coverage, or borrow money from the Treasury.Deteriorating loan quality continues to be the greatest drag on the banking industry, which posted an aggregate loss of $3.7 billion for the quarter, a reversal from the $5.5 billion in profits banks eked out during the first quarter, the FDIC said in its Quarterly Banking Profile. The industry as a whole has posted quarterly losses only twice in the last 18 years -- most recently in the fourth quarter of 2008, when banks set aside massive reserves to cover future loan losses...