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Bank profits up, but ‘problem list’ grows

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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."The 7,830 banks and savings institutions insured by the Federal Deposit Insurance Corp. posted an aggregate profit of $21.6 billion for the three months ending June 30. That compares with a $4.4 billion net loss during the same period in 2009.Nearly two out of three banks reported better year-over-year earnings, Bair said, and "as long as econ...