The Federal Deposit Insurance Corp.'s latest assessment of the banking industry has less red ink, but more red flags.
The FDIC's third-quarter report released Tuesday showed:
• The number of institutions on the FDIC's "problem list" rose from 416 to 552, the highest level in 16 years.
• Commercial banks in Florida lost $632 million in the third quarter, pushing year-to-date combined losses to more than $1.4 billion.
• Nationally, commercial banks and savings institutions reported combined net income of $2.8 billion, reversing a $4.3 billion loss in the second quarter. More than 26 percent of all insured institutions reported a net loss in the past quarter, up from 25 percent a year earlier.
• The FDIC's insurance fund — used to cover deposits for failed banks — fell into the red for the first time since 1992. Over the quarter, the fund dropped by $18.6 billion to negative $8.2 billion.
Though encouraged that more banks are profitable, regulators said they were troubled that bank loan balances declined by the largest percentage since quarterly reporting began in 1984. To FDIC Chairwoman Sheila Bair, that indicates adequate credit still isn't available.
"We need to see banks making more loans to their business customers," she said. "This is especially true for small businesses that rely on FDIC-insured institutions to provide over 60 percent of the credit they use."
In the third quarter, 50 banks failed, the highest quarterly tally since the fourth quarter of 1992.
Bank health, meanwhile, continued to deteriorate through the quarter, the FDIC said. The percentage of loans and leases at least 90 days past due rose to nearly 5 percent, the highest level in the 26 years that insured institutions have reported such data.
Jeff Harrington can be reached at email@example.com or (727) 893-8242. Follow him on Twitter at twitter.com/jeffmharrington.