The total assets of banks on the Federal Deposit Insurance Corp's "problem bank list" jumped over 20% sequentially.

The number of problem banks — those with a CAMELS composite rating of 4 or 5 — increased to 43 from 39 in the first quarter, while total assets of banks on the list jumped by $10.5 billion, or 22%, to $58.0 billion. The increase comes after a 70% sequential drop in total assets in the fourth quarter of 2022.

The disclosure was part of the FDIC's Quarterly Banking Profile release. In discussing the release, Chairman Martin Gruenberg said the agency is concerned about banks' exposure to the commercial real estate sector, particularly as it relates to office buildings and commercial office space in a number of large metropolitan areas.

"We're asking our banks to prioritize how they are managing those exposures and prepare for the downside risks as the economy evolves over the next six, 12, 18 months, and it's going to be a matter of ongoing attention in our supervision work," Gruenberg told reporters.

The chairman also laid out the agency's rulemaking efforts and priorities.

Gruenberg said a massive interagency effort is underway to write guidance on the compensation of executives of failed banks.

"Six agencies are involved in that joint rulemaking," the FDIC official said, with staff of each agency meeting on a regular basis. It is possible the guidance could come this year, Gruenberg said.

Another top interagency priority is the forthcoming final rules on the Community Reinvestment Act that would expand the reach and scope of assessments on whether financial institutions are providing enough banking services to low- and moderate-income communities under the 1977 law. Those final rules should be out "soon," Gruenberg said.

The FDIC official also cautioned that as investigations of failed banks continue, if the agency finds improper conduct, it has the authority to require restitution or permanently ban bad actors from the banking industry.