WASHINGTON (8/24/11)--The Federal Deposit Insurance Corp. (FDIC) reported Tuesday that earnings for its insured commercial banks and savings institutions for the second quarter of this year improved $7.9 billion from a year ago. The FDIC noted it is the eighth consecutive quarter that earnings registered a year-over-year increase. The FDIC also noted that lower provisions for loan losses were responsible for most of the year-over-year improvement in earnings, as has been the case in each of the past seven quarters. FDIC acting Chairman Martin J. Gruenberg said in a release accompanying the agency’s “Quarterly Banking Profile,” "Banks have continued to make gradual but steady progress in recovering from the financial market turmoil and severe recession that unfolded from 2007 through 2009." The improvement trend, he added, has expanded to include a growing proportion of FDIC-insured institutions. The FDIC report quarterly also notes:
* A majority of FIDC-institutions (60%) reported improvements in their quarterly net income from a year ago. The share of institutions reporting net losses for the quarter fell to 15.2% down from 20.8% a year earlier. The average return on assets (ROA), generally regarded as a basic yardstick of profitability, rose to 0.85%, from 0.63% a year ago; * Second-quarter loss provisions totaled $19 billion, less than half the $40.4 billion that insured institutions set aside for losses in the second quarter of 2010. However, net operating revenue (net interest income plus total noninterest income) was $3 billion (1.8%) lower than a year earlier, and realized gains on securities declined by $1.3 billion (61.1%); and * Asset quality showed further improvement as noncurrent loans and leases (those 90 days or more past due or in nonaccrual status) fell for a fifth consecutive quarter. Insured banks and thrifts charged off $28.8 billion in uncollectible loans during the quarter, down $20.9 billion (42.1%) from a year earlier.
Use the resource link below to read the FDIC's second-quarter 2011 Quarterly Banking Profile