The nation’s insured banks enjoyed a profitable run from January through March and the number of troubled banks on a government watch list fell to 2009 levels, the Federal Deposit Insurance Corp. reported Wednesday.
“The banking industry continued to show gradual but steady improvement during the quarter,” FDIC Chairman Martin Gruenberg said in a statement accompanying the quarterly industry profile. “Revenue, earnings, and loan balances were up; asset quality continued to improve; and the number of banks on the ‘Problem List’ declined to the lowest level in more than six years.”
The number of “problem” banks fell from 291 to 253 during the quarter, well below the peak of 888 during the first three months of 2011.
Significantly, nearly two-thirds of banks reported higher earnings than they did in the first quarter of 2014. FDIC-insured institutions reported quarterly net income of $39.8 billion from January through March, a 6.9 percent increase over the same three months of 2014.
Only 5.6 percent of FDIC-insured banks were unprofitable during the first quarter of this year, the lowest percentage since the second quarter of 2005, the FDIC said.
In another sign that the economy is shaking off the long tail of the Great Recession, banks charged off $9 billion in uncollectable loans during the first quarter, down 13.2 percent from loan-loss write-offs in the first three months of 2014.
The long Bull Run on Wall Street has also been good for banks. Trading revenue at the nation’s insured banks was $1.5 billion, or 23.9 percent, higher in the first quarter of 2015 versus the same period of last year, the FDIC said.