Insured Banks Report Year-Over-Year Growth for 10th Quarter in a Row

For the tenth consecutive quarter, FDIC insured banks and savings institutions ""reported"":http://www2.fdic.gov/qbp/2011dec/qbpall.html#1 year-over-year increases, with earnings at $26.3 billion for the 2011 fourth quarter.

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_Source:FDIC_

This is $4.9 billion more from the $21.4 billion reported last year for the 2010 fourth quarter.

Overall, the 2011 fourth quarter ended 23 percent higher than the fourth quarter last year. The $26.3 billion is still a decrease compared to the $35.3 billion in earnings from the previous 2011 third quarter.

Lowers provisions for loan losses were credited for the continued improvement in year-over-year earnings.

""Prudent loan growth is a necessary condition for a stronger economy. That is why we view the fourth quarter growth in the

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industry's loan portfolio as a hopeful sign,"" said acting FDIC chairman Martin Gruenberg in a ""release"":fdic.gov/news/news/press/2012/pr12023.html.

Loan portfolios increased this quarter for the third quarter in a row, with the commercial and industrial sector mainly leading this growth with an increase of $62.3 billion. Residential mortgage loan balances went up by $26 billion, and credit card balances increased by $21.3 billion.

Money accumulating into insured deposit accounts continued to grow, with deposits in domestic offices up by $249.7 billion, or 2.9 percent, during the fourth quarter. More than three-quarters of this increase consisted of balances in noninterest-bearing transaction accounts, which went up $191.2 billion, or 13.7 percent, for the quarter.

Banks on the FDIC ""problem list"" dropped for the third quarter in a row, from 844 to 813. This is the smallest the list has shrunken to since the first quarter of 2010. Total assets from these ""problem"" banks fell from $339 billion to $319 billion. In 2011, there were 92 banks failures, 18 of which fell dark during the fourth quarter of that year. In 2010, 157 banks failed.

With less banks expected to close, the Deposit Insurance Fund (DIF) experienced continued growth. The unaudited DIF balance, or the net worth of the fund, went up to $9.2 billion for December 31, compared to $7.8 billion for September 30.

""The industry is now in a much better position to support the economy through expanded lending,"" said Gruenberg. ""However, levels of troubled assets and 'problem' banks are still high. And while the economy is showing signs of improvement, downside risks remain a concern.""