Deposit insurance fund fell to $10.4B from $13B in Q1 (protecting more than $4.5T). Bank loan loss provisions rose to $66.9B from $60.8B. U.S. banking industry had a net loss of $3.7B from profit of $7.6B in Q1. 4 Comments

In total, FDIC estimates the banking sector is wrestling with $332 billion worth of loans and leases on which borrowers have stopped making payments. That excludes hundreds of billions worth of underwater loans that may be current now but will ultimately default. Many banks, including the largest ones, are likely to struggle for some time.

And that’s the bigger story here. Citigroup (C) and Bank of America (BAC) have received hundreds of billions of dollars of government support, but, precisely because of that support, they’re not on the FDIC’s list. Adding them to it would multiply total problem assets 10 times, to $3 trillion.

"As the FDIC debates whether it'll need to hit the Treasury up for a loan, Institutional Risk Analytics - which has usually taken a grim outlook on bank prospects - now thinks that more than 1,000 banks will fail in the current cycle. With 25 down in 2008 and 94 so far this year, that just leaves another 900 or so."