The number of troubled banking institutions — ones that the FDIC is monitoring because they are in danger of failing — grew 46% in the third quarter, marking the highest level since the fourth quarter of 1995.
The number of such banks grew to 171 from 117, according to the Federal Deposit Insurance Corp.
Additionally, nine FDIC-insured institutions failed in the third quarter, the most since the third quarter of 1993.
The failures included Washington Mutual Inc. of Seattle, which had $307 billion in assets.
Net income at banking institutions fell to $1.7 billion in the third quarter, marking a 94% decline from $28.7 billion in the year-ago period.
“We've had profound problems in our financial markets that are taking a rising toll on the real economy,” FDIC chairman Sheila C. Bair said in a statement. “[This] report reflects these challenges.”
Insured banking institutions charged off $27.9 billion in loan losses at the end of September, marking a 157% increase from the $10.9 billion reported in the third quarter of 2007.
Money set aside to cover loan losses tripled to $50.5 billion in the third quarter, compared to $16.8 billion in the year-ago period.
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