Bank profits up, but 'problem list' grows

FDIC sees warning signs at 1 in 10 insured institutions

Federally insured banks and savings institutions posted their biggest profits in nearly three years during the second quarter, despite the fact that one in five institutions posted a loss, 45 failed, and the number of banks on regulators’ "problem list" grew to 829 — the highest level in 17 years.

"Earnings remain low by historical standards, and the numbers of unprofitable institutions, problem banks and failures remain high," FDIC Chairwoman Sheila Bair said in a press release. "But the banking sector is gaining strength. Earnings have grown, and most asset quality indicators are moving in the right direction."