The federal agency that insures bank deposits said yesterday that the number of banks and thrifts it considers troubled shot up 30 percent in the second quarter to 117, up from 90 at the end of March -- the highest level of problem institutions in five years. It was the seventh straight quarter the list has grown since reaching a low of 47 in 2006.

Both the agency and industry analysts said they expected the number of problem banks to continue to rise as financial institutions cope with soured loans, the housing slump, disruptions in financial and credit markets and the overall worsening of the economy. But they emphasized that the vast majority of institutions were sound and were not in danger of failing.

So far this year, nine banks have been taken over by the Federal Deposit Insurance Corp., including California mortgage lender IndyMac Bank -- representing the third-biggest U.S. bank failure ever -- which went bust in July. That compares with three failures in 2007 and none in 2005 and 2006, the agency's best years.

Most banks on the FDIC's problem list, roughly 85 percent, do not fail, the agency says.

In the first quarter this year, the list of problem banks rose 18 percent to 90, up from 76 at year's end.

The FDIC does not release the names of the troubled banks, only the numbers. Although problems are mounting, the industry is not expected to sink to anywhere near the depths of the savings and loan crisis of the late 1980s and early '90s, during which the troubled list ballooned to more than 2,000 and roughly 1,000 federally insured institutions collapsed.

"The industry is fundamentally much stronger coming into the present situation," said Bert Ely, a banking consultant in Alexandria, Va.

"The banks that are in trouble are, by and large, the outlier banks -- banks that had nonconventional lending and funding strategies. The mainstream banks are, by and large, in pretty good shape."

Overall, the banking industry earned $5 billion in the second quarter, down from the second quarter last year when profits totaled $36.8 billion, and the second worst quarterly performance in nearly 17 years. Financial institutions also set aside a record $50.2 billion to cover losses from defaulted mortgages and other bad loans for the quarter.

"By any yardstick, it was another rough quarter for bank earnings, but these results were not unexpected," FDIC Chairwoman Sheila Bair said at a news conference.

She said most institutions were "fundamentally sound" and "taking appropriate steps to deal with the challenging environment."

Although the troubled list will probably continue to swell, she said, the number will "still be low compared to the high levels we saw during the S&L days."

The FDIC also said it would soon propose a plan to increase the premiums that banks pay into the agency's insurance fund, with "high risk" institutions contributing a larger share. The move is intended to "provide incentives to decrease higher-risk activity," Ms. Bair said.

Mr. Ely said depositors should make sure they understand FDIC rules so they know whether their money is fully insured.

People whose deposits fall below the FDIC insurance limits can rest easy, he said. But people whose deposits exceed coverage should consider "spreading their money around," he said.

In general, deposits are insured up to $100,000, while maximum coverage on retirement accounts is $250,000. Coverage does not apply to investments, meaning the FDIC does not insure money in mutual funds, stocks, bonds, life insurance policies or annuities, even if they were purchased from an FDIC-insured institution.

Consumers can get an idea about whether their deposits are fully covered by using the FDIC's Electronic Deposit Estimator at www.fdic.gov, or by calling 1-877-275-3342.