Aug. 27--More than one of every five Wisconsin banks lost money in the second quarter as loans continued to deteriorate in the weak economy, a report Thursday by regulators shows.

Fifty-two Wisconsin banks, including three of the four largest based in the state -- M&I, Associated and AnchorBank -- were unprofitable in the second quarter, according to the Federal Deposit Insurance Corp. report.

Altogether, Wisconsin banks lost about $161 million in the quarter, compared with a loss of $207 million in the same period in 2008. The number of non-current loans worsened, with 4.17% of total loans in arrears. That's up from 1.99% in the second quarter last year and an increase from 3.44% in the first quarter of this year.

The struggle in the banking industry is nationwide, the FDIC report said. Overall, banks lost $3.7 billion in the second quarter, compared with net income of $4.8 billion in second quarter 2008.

Nationally, the amount of loans and leases that were behind on payments hit a new record and the list of "problem" banks rose to a 15-year high of 416.

The FDIC does not identify the problem banks.

"While challenges remain, evidence is building that the U.S. economy is starting to grow again," said FDIC Chairman Sheila Bair. "Banking industry performance is -- as always -- a lagging indicator. The banking industry, too, can look forward to better times ahead. But, for now, the difficult and necessary process of recognizing loan losses and cleaning up balance sheets continues to be reflected in the industry's bottom line."

The Wisconsin banks posting the biggest losses in the quarter were Milwaukee's M&I, Green Bay's Associated, First Banking Center in Burlington, Security State Bank in Iron River and Madison's AnchorBank, according to the FDIC.

Wisconsin's most profitable conventional banks in the quarter were Racine's Johnson Bank, River Valley Bank in Wausau, National Exchange Bank and Trust in Fond du Lac, Brown Deer's Bank Mutual and Waukesha State Bank.

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