Growth and Gains Observed in the FDIC’s Third Quarterly Report

by Houston Agent

The FDIC's third quarterly report shows positive signs of a recovering economy

Financial institutions insured by the Federal Deposit Insurance Corp. (FDIC) displayed positive gains on lower loan-loss provisions in this year’s third quarterly report; 63 percent of the FDIC’s client banks reported higher earnings, according to FDIC data cited by Housing Wire.

The FDIC reported that insured banks earned $35.3 billion in the third quarter (July-September) report; up 48 percent in a year-over-year analysis. Earnings have risen each quarter for two consecutive years now, and are presently at the highest level since the second quarter of 2007, reported in the Housing Wire article, “FDIC: Bank balance sheets stronger, earning up 48 percent in 3Q.” .

Other data in the quarterly report included a rise in deposits at American banks, up 3.4 percent from the last quarter; and an increase in loan portfolios, up 0.3 percent this quarter. Banks were also reported by the FDIC as having lowered loan-loss provisions by almost by 50 percent, and the number of banks reporting losses in the third quarter fell to 14.3 percent, 5.2 percent less from what had been reported a year ago.

“U.S. banks have come a long way from the depths of the financial crisis,” said Martin Gruenberg, acting chairman of the FDIC. “Bank balance sheets are stronger in a number of ways, and the industry is generally profitable, but the recovery is by no means complete.”

Although the number of banks on the FDIC’s ‘problem list’ has decreased in the past two quarters, the number still remains high at 844. Moreover, the total assets the institutions collectively hold fell to $339 billion; it had been previously reported at $372 billion last June. Bank failure also increased this quarter from the last, up 26 from 22, though have decreased from the 41 observed a year prior.

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