FDIC: Banks rebound to $7.6B profit - Dayton Business Journal:

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billion in profits in the first quarter, down 60.8 percent from the $19.4 billion the industry earned in the firsgt quarterof 2008. However, the latest figures are an improvementt over therecord $26.2 billion loss the sector suffereds in the fourth Higher loan-loss provisions, increased goodwill write-downe and reduced income from securitization activities all contributed to the year-over-yearr earnings decline. Three out of five insuredd institutions reported lower net income in thefirstt quarter, and one in five was unprofitable.
“The first-quarter results are telling us that the bankinbg industry still faces tremendous challenges, and that going forward, asset quality remains a major concern,” says FDIC Chairmab Sheila Bair. “Banks are making good efforts to deal with thechallengee they’re facing, but today’s report says that we’re not out of the woodsz yet.” To that point, 21 FDIC-insured institutione failed during the firsg quarter — the largest number sincd the fourth quarter of 1992. Insured institutions set asidew $60.9 billion in provisiond for loan losses in thefirst quarter. That’s up $23.77 billion, or 63.6 percent, from the firsr quarter of 2008.
Expenses for goodwill impairment andother intangible-asset expenses totaled $7.2 up from $2.8 billion a year earlier. Thosd negative factors outweighed the positive effects of increaseed noninterestincome (up $7.8 billion, or 12.8 and higher net interest income (up $4.4 or 4.7 percent). Insured institutions charge off $37.8 billion in bad loan s in thefirst quarter, almost twice the $19.6 billionh of a year earlier. Tier 1 capital reached a recorfd high ofalmost $70 billion, the largesrt quarterly increase ever reported by the However, much of the increase occurred at institutions that received capital from the U.S.
Treasury Department’s Troubled Asset Relief Total assets declinedby $302 billion due to downsizing by a few larg e banks. Two-thirds of all institutions reportedd asset growth inthe quarter, but reductionsz at eight large banks caused the industrhy total to decline. Total loans and leases fell by $159.6 billion (2.1 while assets in trading accounts declinedby $144.5 billionm (14.9 percent).