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The nation’s banks lost $26.2 billion in the last three months of 2008, the first quarterly deficit in 18 years, as the housing and credit crises escalated.

The Federal Deposit Insurance Corp. said Thursday that U.S. banks and thrifts also more than doubled the amount they set aside to cover potential loan losses, to $69.3 billion in the fourth quarter from $32.1 billion a year earlier.

Rising losses on loans and eroding values of assets "overwhelmed" banks’ revenue in the fourth quarter, the FDIC said. More than two-thirds of all banks and thrifts turned a profit in that period, but their earnings were outstripped by large losses at a number of major banks.

Regulators said 252 banks were in trouble at the end of 2008, up from 171 in the third quarter.

For all of last year, the banking industry earned $16.1 billion, the smallest annual profit since 1990, according to the FDIC.

The fourth-quarter loss was the biggest in the 25 years the agency has been compiling quarterly results. It compared with a $575 million profit in the fourth quarter of 2007.

FDIC Chairman Sheila Bair, reaching for a silver lining in the dismal picture, noted that total bank deposits increased in the October-December period by $307.9 billion, or 3.5 percent — the largest rise in 10 years. Deposits in domestic bank offices rose $274.1 billion, or 3.8 percent.

That showed confidence in the banking system and deposit insurance, Bair said. But she acknowledged "the fourth quarter was a tough end to a tough year for the banking industry."

The FDIC report "confirms what we already know — the weak economy is continuing to make it difficult for some businesses and individuals to repay their loans," James Chessen, chief economist at the American Bankers Association, said in a statement payday loan online. At the same time, "banks are taking the necessary steps to put losses behind them" and continue to actively lend, he added.

Two-thirds of U.S. banks increased their lending in the fourth quarter, Chessen said.

The Office of Thrift Supervision, meanwhile, announced a loss of $3 billion in the fourth quarter and a record $13 billion annual loss for savings and loans last year.

The agency, part of the Treasury Department, also said it is launching a new unit to monitor thrifts with more than $10 billion in assets. The new "large bank unit" will be working onsite at about 25 savings institutions.

The OTS also will create new standards for reviewing enforcement actions on thrifts that do not meet minimum standards.

Thrifts are important to consumer lending because they must have at least 65 percent of their lending in mortgages and other consumer loans. That also has made them especially vulnerable to the housing downturn.

Two of the biggest bank failures in the nation’s history occurred last year and involved thrifts — IndyMac Bank and Washington Mutual Inc. — and some lawmakers have raised concerns about the OTS’ oversight of the industry.

Bair said that today the FDIC will raise the insurance premiums paid by U.S. banks and thrifts, effective in the second quarter. That will follow a plan to rebuild the deposit insurance fund put in place in October that increased average premiums to 13.5 cents for every $100 of banks’ deposits from 6.3 cents.

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