There was more than a sixfold increase in the number of U.S. financial institutions identified as problem banks in the past two years.

And banking regulators have strongly signaled to expect more problem banks and failed banks, says Tom Timmons of Timmons Co. in Rancho Santa Margarita, who has more than 30 years’ experience with troubled banks.

The Federal Deposit Insurance Corp. has its official list of problem banks but it won’t publish the names. However business interests can compile unofficial lists from lists of enforcement actions by the Federal Reserve Bank, Office of Thrift Supervision and Comptroller of the Currency.

“The lists are probably almost identical but you can’t prove it because the FDIC won’t release its list,” Timmons says.

In 2007, the FDIC officially designated 76 banks as problems. At the end of the third quarter 2009, the official list had grown to 552 (the FDIC’s full 2009 data will be released in March).

The unofficial list for all of 2009 is 575 banks.

Not every problem bank fails, but a lot do. In 2008, 25 banks failed, a third the number of problem banks in 2007. In 2009, 140 banks failed, half the number of  2008 problem banks.

Timmons says in his client newsletter:

“FDIC Chairman (Shela) Blair noted that the 54% increase in the 2010 FDIC budget is necessary to prepare for an even larger number of bank failures and to provide regulatory oversight for a larger number of troubled banks.  Additionally, the FDIC staff will increase by 23% to more than 8,650 employees in 2010.”

He adds, “It seems certain that there will be more bank failures and probable that there will be more enforcement actions in 2010 than there were in 2009.”

Troubled commercial real estate will be a key factor in that expansion, Timmons says.

Staffing up to deal with bank problems is at odds with a joint statement issued Feb. 5, by the FDIC and Federal Reserve encouraging banks to make more small-business loans.

Banks “should not automatically refuse credit to sound borrowers because of a borrower’s particular industry or geographic location,” the statement said.

Timmons says, “Federal regulators come out with statements like that that don’t translate into reality.”

Banks are in trouble and “there’s no quick fix coming,” Timmons says. “It’s two, three years out. This is the most difficult time I have ever seen.