The Federal Deposit Insurance Corp. report out today on the problems at regional banks is one of the most overlooked yet one of the most important reports on the state of the housing and credit crisis today.

It shows the extent to which the housing bubble reached all corners of this country.

The numbers continue to be bad. The FDIC says there are now 90 banks on its problem list, up from 76 last quarter, and that loan loss provisions to take care of future problem loans at commercial banks and savings institutions insured by the FDIC increased to a record $37.1b from $9.2b a year ago.

The increase in loan loss provisions is the reason why the FDIC says its insured banks and thrifts reported net income of $19.3b in the first quarter of 2008, a decline of $16.3b (45.7%) from the $35.6b that the industry earned in the first quarter of 2007.

Delinquent loans are up to $136b in the first quarter versus $119b in the fourth and from $61b a year ago.

"To sum up, while we may be past the worst of the turmoil in financial markets, we're still in the early stages of the traditional credit stress you typically see during an economic downturn," said FDIC chairman Sheila C. Bair. 

Bair went on to say that "given the weaker economy and rising level of problem loans, we're encouraging bank managers to stay on their toes. We're urging all institutions to make sure their reserves are large enough to cover expected losses. We also want them to beef up their capital cushions beyond regulatory minimums given uncertainties about the housing markets and the economy."

We are still waiting on the data showing the total number of banks where construction loans exceed total capital. The last time we visited that number a month or so ago, the total had risen from 1,179 institutions to 2,368 since 2003, according to the FDIC.

And about 467 publicly traded community and regional banks were overexposed at the time to construction and development loans (C&D), with $204b in loans exceeding risk-based capital by 185% on average.

Problem regionals to watch out for: Dallas-based Comerica (CMA), lots of loan loss provisions due to its sour real estate development loans, notably in California and Michigan.

Marshall & Ilsley Corp. (MI), a Milwaukee-based bank holding company with exposure to construction loans.

Branch Bank & Trust (BBT), a Winston-Salem, NC bank also has exposure to C&D loans. Analyst Richard Suttmeier has said that it "has a risk ratio of 182% of risk-based capital."

Regions Bank, whose parent is Regions Financial Corp. (RF), also has a worrisome C&D risk ratio of 122% of risk-based capital, Suttmeier says. Watch out of course for IndyMac (IMB). Wells Fargo (WFC), too, which has exposure to home equity loans in California, a state hit hard by the housing crisis. KeyCorp is not out of the woods by any means, neither are Washington Mutual (WM) and Wachovia (WB).