FDIC: Bank Profits Down 61% In Q1
Troubled by bad loans, banks insured by the Federal Deposit Insurance Corp. reported first quarter net income of $7.6 billion, a decline of $11.7 billion, or 60.8 percent, compared to the same quarter a year ago.
FDIC-insured banks set aside $60.9 billion for loan losses during the quarter, an increase of $23.7 billion or 63.6 percent, over the prior year. Expenses for goodwill impairment and other intangible asset expenses totaled $7.2 billion compared to $2.8 billion a year ago.
During the quarter, 21 FDIC-insured banks failed, the largest number of failures reported by the FDIC since the fourth quarter of 1992. The FDIC's list of "problem" banks grew from 252 to 305, representing assets of $220 billion.
Insured banks charged off $37.8 billion in bad loans in the first quarter, almost twice the number of a year earlier. The amount of loans and leases that were more than 90 days past due rose by $59.2 billion during the quarter and are $154.3 billion greater than a year ago.
The loan losses and write-downs outweighed the quarter's positive developments, including a 12.8 percent increase in non-interest income, a 4.7 percent increase in net interest income and higher gains from securities.
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