This study analyzes how balance sheet problems in the form of non-performing loans (npls) affect the liquidity, funding and profitability of selected Nigerian banks in two critical periods, the bank distress era (1999-2001) and the post- consolidation era (2007-2009). The data for this study were computed from the balance sheets of twenty-two universal banks in the first period, and twenty-two consolidated Deposit Money Banks in the second period. Three multiple regression models were estimated at the 5% level of significance. In the bank distress era (1999-2001), an average NPL ratio of 21.1% was accompanied by a Loan-to-Deposit Ratio (LTDR) of 53.9%, below the prudential maximum of 80.0%. However, in the post-consolidation era, the average NPL ratio fell drastically to 7.1% with an accompanying LTDR of 57.7%, still below the prudential maximum. The inferential results show that the explanatory powers of non-performing loans (NPLs) and Loan Loss Reserves (LLR) are high in causing variations in Loan-to-Total Assets (LTA) during the bank distress era (1999-2001). The deteriorating asset quality in the bank distress era constrained significantly bank liquidity, funding growth and profitability.. In the post-consolidation era, the pursuit of consolidation and risk-based supervision (RBS) moderated NPLs without a corresponding impact on liquidity and funding growth (LTDR). Heavier regulation in the post-consolidation era must aim at keeping the banks safe, profitable and relevant, and not merely becoming a stringent response to market failures and cumulative risk concentrations.