Banks are not out of the woods yet. Peak losses ahead. FDIC is broke:

http://www.tradingstocks.net/html/fdic_insurance.html

FDIC is levying extra fees to the member banks to pay for the failures. These extra fees will push marginally healthy banks to the edge and more may fail. That results in even more fees! And the dominos start falling. Is your bank safe?

http://www.tradingstocks.net/html/is_your_bank_safe.html

Banks have been lending to the wrong borrower for decades. Business lending has decreased every year since 1980. Banks were lending to the consumer instead. Consumers consume. They do not produce. Consumer loans are backed by depreciating assets such as cars, houses. If they value goes down, the loan does not have a collateral.

In the past (50 years ago?), most of the bank portfolios would be invested in treasuries. If the home values collapsed, banks would still be solvent. Today, 90+% of the bank portfolios are invested in consumer loans. When collateral declines in value, banks get into trouble. When loans are not paid back, banks are practially bankrupt and require government intervention to remain solvent.

Read this free 13-page report as part of a 2010 stock market forecast, to understand the extent of bank troubles we are facing:

http://www.tradingstocks.net/html/2010_stock_market_forecast.html