According to the latest data from the Federal Deposit Insurance Corporation (FDIC), the number of banks in the United States with significant problems continues to rise. The FDIC stated in its quarterly bank profile report that the number of U.S. banks on its "problem bank list" increased to 68 in the third quarter. This figure represents the fifth consecutive quarterly increase in the number of banks rated 4 or 5 on the CAMELS rating system since the second quarter of 2023. A CAMELS rating of 4 indicates that the bank is experiencing problems in financial, operational, or managerial areas (or a combination of these) that, if not addressed, could threaten its soundness. Meanwhile, a CAMELS rating of 5 indicates that the bank is critically deficient in one or more areas and requires urgent remedial action. The report notes that "the total assets held by problem banks increased by $3.9 billion, reaching $87.3 billion. Problem banks account for 1.5% of the total number of banks, which is within the normal range of 1% to 2% for all banks during non-crisis periods." At the same time, the amount of unrealized losses on bank balance sheets has decreased. The FDIC stated that as of the third quarter of this year, the banks' book losses amounted to $364 billion, primarily due to exposure to risks in the residential real estate and treasury bond markets. Unrealized losses represent the difference between the price paid by banks for securities and the current market value of those assets. The banks' book losses in the third quarter decreased by $148.9 billion from $512.9 billion in the second quarter. However, FDIC Chairman Martin J. Gruenberg stated that the reduction in banks' book losses last quarter is only temporary. Changes in long-term interest rates since the end of the third quarter indicate that U.S. banks' current unrealized losses may be approaching $500 billion. (The Daily Hodl)