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The list of "problem banks" kept by federal regulators rose to a 15-year high in the second quarter. But bank watchdogs who spoke in Bloomington on Wednesday warned that the list already is growing longer -- thanks to loans going bad in a hurry.

And in Washington, D.C., the U.S. Office of Thrift Supervision reported Wednesday that federally insured savings and loan institutions posted their second-largest quarterly loss ever in the April through June period, after the $8.8 billion loss in the fourth quarter of last year.

The $5.4 billion quarterly thrift losses were linked to a rising tide of home mortgage defaults, and compare with net profits of $3.8 billion in the year-ago period, and a loss of $627 million in the first quarter.

The Federal Deposit Insurance Corp. (FDIC) district that includes Minnesota, Iowa, Kansas, Missouri and Nebraska already has added banks to its troubled list for the third quarter, said James LaPierre, regional director of the agency's district office in Kansas City, Mo.

LaPierre and Bert Otto, an official of the Office of the Comptroller of Currency, spoke to the Minnesota Bankers Association session at the Embassy Suites in Bloomington, outlining industry trends and what regulators are looking for when they audit one of the FDIC-insured banks in Minnesota.

While soured home mortgages have gotten much of the public attention in the last several months, LaPierre and Otto told bankers that their focus these days is on faulty commercial loans -- including debts tied to multifamily residential projects.

They said that regulators are finding an industry more heavily involved in commercial real estate than ever, just as an economic slump has undermined the value of all manner of brick-and-mortar projects.

"We are continuing to see deterioration ... as we come around to these institutions" for exams, LaPierre said.

Some bankers have been slow to recognize the double-digit declines in the value of collateral on many commercial projects over the last year, LaPierre and Otto said. Meanwhile, the number of loans 90 days or more overdue at Minnesota banks has continued to rise.

"Market conditions change," Otto said. "An appraisal can be outdated in three months. It can happen that fast."

A condo project financed in 2006 can remain empty when it opens in 2008. A building designed as a retail mall can end up as a half-empty hotel.

"Two years out, a whole project can be totally different," Otto said. "We never have gone into a downturn, as we are now, with banks having such concentration [in] commercial real estate."

A lack of ready cash and skidding commercial real estate projects have led to a rash of Minnesota banks either losing money or watching profits fade fast, according to figures released by the FDIC this week.

In the second quarter, 74 Minnesota banks -- almost 17 percent of all 436 FDIC-insured institutions in the state -- lost money or recorded no profit, the FDIC reported.

Among the top 10 Minnesota banks reporting red ink for April, May and June, losses ranged from more than $10 million (Ameriprise Bank, Minneapolis) to $703,000 (Community National Bank, North Branch).

Nationwide, the FDIC found that bank profits were down 87 percent -- or $5 billion -- in the second quarter, compared with a year earlier. Lenders have grown wary of providing liquidity to a bank that's eager to shore up its balance sheet, the regulators said.

"Just when you thought you had sources of liquidity, suddenly you may not," LaPierre said. "Liquidity is one of those things where as long as you prove you don't need it, you can get money anywhere."

The Associated Press contributed to this report. Mike Meyers • 612-673-1746