Number of troubled banks keeps rising even as industry has best quarter in 2 years

More banks are troubled even as industry recovers

WASHINGTON — The government says the number of troubled banks kept growing last quarter even as the industry as a whole had its best quarter in two years.

The Federal Deposit Insurance Corp. says the number of banks on its confidential “problem” list leaped to 775 from 702 in the January-March period. But banks overall posted net income of $18 billion. That was up from $5.6 billion in the same quarter a year earlier.

The biggest improvement was at the largest banks, but a majority of institutions posted gains in net income. In another sign of health, the FDIC’s deposit insurance fund, which fell into the red last fall, posted its first improvement in two years. Its deficit shrank by $145 million to $20.7 billion.