The US government said on Tuesday the number of 'problem' banks in the country has risen to 171 -- the highest number in past 13 years -- while the assets held with the problem institutions have exceeded $ 100 billion for the first time in almost the same period.

The Federal Deposit Insurance Corp, a government agency that tracks and is often named receiver for the distressed banks, further said that the number of insured institutions on the its 'problem list' increased from 117 to 171, and the assets of 'problem' institutions rose from $ 78.3 billion to $ 115.6 billion during the quarter.

This is the first time since the middle of 1994 that assets of 'problem' institutions have exceeded $ 100 billion, it noted. The surge in the number of 'problem' financial institutions comes in the midst of one of the biggest credit crisis in the US economy.

Noting that there were nine failures in the third quarter that included Washington Mutual, FDIC said on Tuesday that the number of insured commercial banks and savings institutions fell to 8,384 at the end of September, from 8,451 at mid-year.

During the July-September quarter, 73 institutions were absorbed in mergers and a total of nine failed -- which is the largest number of failures in a quarter since the third quarter of 1993, when 16 insured institutions had failed.

Among the failures, Washington Mutual Bank, with $ 307 billion in assets, is the largest insured institution to fail in the American history.

FDIC further said that Q3 earnings of US banks and thrifts fell about 94 per cent to $ 1.73 billion dollars from $ 28.7 billion in the year-ago quarter, mostly due to provisions for loan losses.