WASHINGTON — It's going to be a long, tough winter for the banking industry.

That was essentially the forecast from the Federal Deposit Insurance Corp., which made it clear in data released Tuesday that the 22 bank failures to date this year are just the beginning.

The agency said it withdrew $12 billion from the Deposit Insurance Fund in the third quarter to pay for expected failures, eclipsing the prior quarter's $10 billion. Fifty-four institutions were added to the troubled-bank list, the largest quarterly increase since the savings and loan crisis. Assets held by those problem banks, which numbered 171, jumped nearly $70 billion, to $115.6 billion.

Overall, the industry is in poor condition. Earnings plunged 94% from a year earlier, to $1.7 billion, hurt by a rise in loan-loss provisions — more than triple their level a year earlier — as well as losses on the sale of securities.

Though the government has tried to contain the crisis, FDIC Chairman Sheila Bair said problems were spiraling.

"Loan performance problems are spreading to a much wider range of lenders and categories of loans," Ms. Bair said at a press conference announcing the agency's Quarterly Banking Profile. "While many large institutions are continuing to post losses due to weaknesses in their portfolios, we're now seeing losses spread to a growing number of smaller institutions."

The FDIC's own reserves left the Deposit Insurance Fund with $34.6 billion, a 23% drop from the previous quarter, and lowered the ratio of reserves to insured deposits by 25 basis points, to 0.76%, the lowest level since 1994.

Failures in the fourth quarter have already taken a significant bite out of the $11.9 billion provision.

The nine failed institutions this quarter held assets of $23.5 billion and are estimated to cost the FDIC roughly $4.3 billion, leaving nearly a third of the reserve for failures to come. Nine institutions also failed in the third quarter, the highest total in 15 years.

Still, Ms. Bair hailed steps the agency has taken to ease hits to the fund, including the transfer of the failed Washington Mutual Inc. to JPMorgan Chase & Co. — at no cost to the DIF — and a proposed doubling of premiums intended to bring the reserve ratio back to its statutory benchmark of 1.15% within five years. Though the DIF is well below that statutory minimum, Ms. Bair said she did not expect to raise premiums further.

"As expected, provisions for current and future failures have resulted in a drop in the Deposit Insurance Fund," she said. "The balance may decline further until the higher premiums that we've proposed kick in next year. And while we expect more banks to fail, we believe that this new revenue will put us on track to stabilize the insurance fund, and begin moving it back toward our target reserve ratio."

A series of indicators showed that the industry's asset-quality problems continue to be the primary obstacle to profitability. Banks and thrifts set aside $50.5 billion in loan loss provisions, compared with $16.8 billion a year earlier.

The industry's return on assets fell to 0.05%, from 0.92% a year earlier — the second-lowest quarterly ROA reported in 18 years. More than 58% of institutions reported year-over-year declines in earnings, while even more — 64% — had lower quarterly ROAs.

The industry also reported a $7.6 billion loss on the sale of securities and other assets in the third quarter, compared with a $77 million gain a year earlier. Overall, noninterest income fell 1.5% from the third quarter of 2007, to $905 million.

"Evidence of a deteriorating operating environment was widespread," the FDIC report said.

Net interest income provided some reason for hope, increasing 4.9% from a year earlier to $4.4 billion. Though the average net interest margin of 3.37% did not change from the previous quarter, it rose 2 basis points from the margin a year earlier.

Increases in assets and domestic deposits, attributed to the federal government's numerous steps to protect liquidity, were also seen as bright spots. Total industry assets grew 2.1%, to $13.57 trillion, led by balances at Federal Reserve banks, which grew $146.8 billion, and a $74.6 billion rise in holdings of asset-backed commercial paper.

Domestic deposits, meanwhile, grew 7.14% from a year earlier, to $7.2 trillion, compared with 5.04% in the previous quarter.

But the growth in bad loans and chargeoffs was just as robust. Net chargeoffs in the quarter totaled $27.9 billion, 156% higher than in the third quarter of 2007.

The quarterly net chargeoff rate, an annualized calculation of chargeoffs as a percentage of loans held in the quarter, rose 10 basis points from the second quarter, to 1.42%, its highest level since 1991.

Total noncurrent loans, meanwhile, rose 122% from a year earlier and 13% from the previous quarter, to $184.3 billion. Noncurrent loans were 2.31% of total loans in the quarter, 27 basis points higher than in the second quarter and the highest level since the third quarter of 1993.

"We've been saying for some time that the rising tide of troubled loans means that bad-loan expenses will remain high," Ms. Bair said. "There is nothing in these results that alters that basic message."

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