US bank earnings up 69 percent in Q1

first_imgWASHINGTON (AP) — U.S. banks’ earnings rose 6.9 percent in the first quarter from a year earlier as revenues increased, delinquent loans continued to fall and the number of “problem” banks reached a six-year low.The data issued Wednesday by the Federal Deposit Insurance Corp. showed “gradual but steady improvement” for the banking industry, FDIC Chairman Martin Gruenberg said at a news conference. Still, low interest rates continued to crimp banks’ profit margins on loans during the January-March period. Ex-FBI agent details raid on Phoenix body donation facility New Valley school lets students pick career-path academies Sponsored Stories The FDIC reported that U.S. banks earned $39.8 billion in the first quarter, up from $37.2 billion a year earlier.Nearly 63 percent of banks reported an increase in profit in the first quarter from a year earlier. Only 5.6 percent of banks were unprofitable — the lowest percentage of unprofitable institutions since the second quarter of 2005.The volume of delinquent loans fell by 6 percent, and the average noncurrent loan rate declined from 1.96 percent to 1.83 percent, a seven-year low. Banks also increased by nearly 10 percent, or $756 million, the amounts they set aside to cover losses on loans. Lending grew by 0.6 percent, or $52.5 billion.The number of banks on the FDIC’s confidential “problem list” fell to a six-year low of 253 from 291 in the fourth quarter.Community banks scored strong earnings growth in the first quarter, jumping 16.4 percent from the same period last year to $4.9 billion. They showed stronger growth in lending than the rest of the industry, the FDIC said.But continued low interest rates “remains a challenge for banks,” Gruenberg saidThe average net interest margin on loans and other investments fell to 3.02 percent from 3.16 percent from a year earlier. Milstead says best way to stop wrong-way incidents is driving sober Quick workouts for men The number of bank failures continues to slow, marking 18 last year. That is still more than normal. In a strong economy, an average of four or five banks close annually. But failures declined from 24 in 2013 and were down sharply from 157 in 2010 — the most in one year since the height of the savings and loan crisis in 1992.So far this year, five banks have failed. Eight had been shuttered by this time last year.The decline in bank failures has allowed the deposit insurance fund to strengthen. The fund, which turned from deficit to positive in the second quarter of 2011, had a $65.3 billion balance at the end of March, according to the FDIC.The FDIC was created during the Great Depression to insure bank deposits. It monitors and examines the financial condition of U.S. banks. The agency guarantees bank deposits up to $250,000 per account.Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Top Stories Comments   Share   Former Arizona Rep. Don Shooter shows health improvement How Arizona is preparing the leader of the next generation 5 treatments for adult scoliosislast_img

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