U.S. banks are still increasingly plagued by bad, and overdue loans, which have reached the highest levels in 26 years, the Federal Deposit Insurance Corporation (FDIC) said on Tuesday. Banks earned $2.8 billion in the third quarter, but loan balances fell and the fund that insures their deposits was $8.2 billion in the negative. The number of banks on the FDIC's “problem list” rose to 552 from 416 on June 30—the highest level in 16 years. Fifty banks failed during the quarter — the largest number since the second quarter of 1990. The FDIC's fund that insures bank deposits fell by $18.6 billion, mostly because $21.7 billion was set aside for expected losses on future bank failures. The last similar deficit was in December 1991, when a predecessor fund was more than $7 billion in the negative.
