The FDIC's problem bank list grew in the fourth quarter of last year, increasing from 552 banks nationwide to 702. The agency does not disclose the names of the troubled banks.

But despite the increase, banking customers shouldn't worry too much about the safety of their own banks.

Most of the problem banks are small. Though the list is comprised of about 9 percent of the country's banks, they only hold about 3 percent of the total banking assets, says banking industry analyst Bert Ely, principal at Alexandria, Va.-based Ely and Co.

And the FDIC's list has been longer in the past.

"In 1987, there were over 2,000 institutions on the problem list, so historically we are much lower than the highs have been," according to Andrew Gray, spokesman for the FDIC.

"There are 8,000 insured institutions in the country, approximately, and over 95 percent are considered well-capitalized by regulatory standards so it is not quite as dire as some may predict," he says.

"The definition of a problem institution is what we call a four or five on our CAMELS ratings, which are supervisory ratings done by bank examiners. It's based on capital, assets, management, earnings, liquidity and sensitivity to market conditions," says Gray.

Commercial real estate could be the next bubble

Historically, most banks on the problem bank list do not fail. (Here is the list of failed banks so far in 2010.)

"Looking back 25 years, only about 15 percent on average do end up failing; most are acquired by healthier institutions or nursed back to health," says Gray.

Though the economy is recovering, the banking recovery will take longer, as banking problems tend to continue for a few years after the end of a recession.

The problems coming down the pike now involve commercial real estate.

"2010 is going to see a lot more in the way of loss recognition when it comes to commercial real estate and that will be a function of not just the recession but the unemployment rate," says Ely.

Chad McCloskey, president of Newbury Park, Calif., financial consulting firm, Vivo Livre, agrees.

"Banks with a lot of exposure to commercial real estate might be facing a similar issue as those that failed due to securitized debt against the residential marketplace," he says. "There is over $1.4 trillion in commercial real estate to come due in the next three to four years. That bubble is the next to burst."

The FDIC expects more banks to fail in the coming year, though they also believe that the number of bank failures will peak in 2010 and then recede.

According to Gray, the FDIC's insurance fund  is doing just fine despite, technically, being in the red. "We have over $66 billion to fund bank failures. At the end of 2009, we collected $45 billion in prepaid assessments over what banks would have paid over the next three years, so that comes into our immediate cash position to handle failures, but banks are expensing that over the next three years so we book it as a liability," he says.

How to make sure your bank is safe and sound

Consumers need to pay attention to the amount of money they have in any particular institution. The FDIC insures deposits up to $250,000 per depositor.

That limit is slated to come back to $100,000 at the end of 2013, but according to Ely, in most bank failures, the FDIC has been able to cover most deposits, even those that exceed the limit.

"The FDIC has quietly adopted a policy of protecting all deposits in a bank failure if they can," Ely says.

But there is still some risk. There are ways to make sure all of your deposits are insured, from keeping money under separate registrations, using several different banks or CDARS, the Certificate of Deposit Account Registry Service.

As far as what banking customers should look for in a bank, McCloskey recommends that "consumers should stay away from banks that have high levels of development loans and commercial real estate lending right now," McCloskey says.

"People should ask their banks what kinds of lending exposure and business they participate in, especially if they can't find it in the company's financial statements," he says.

If combing through your bank's annual statements sounds daunting, Bankrate also has a system for measuring the safety of banks, thrifts and credit unions throughout the country.

In the extremely unlikely event that your bank goes belly-up, don't panic. Gray stresses that customers have immediate access to their money.

For more on bank failures, read the Bankrate feature, "What happens when a bank fails?"

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