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 $19.3 billion the industry earnecd in the first quarterof 2008. the latest figures are an improvement over therecordc $26.2 billion loss the sector sufferedx in the fourth quarter. Higher loan-loss provisions, increased goodwillo write-downs and reduced income from securitizatiobn activities all contributed tothe year-over-year earning s decline.
Three out of five insures institutions reported lower net income in thefirstr quarter, and one in five was “The first-quarter results are telling us that the bankin g industry still faces tremendous challenges, and that goint forward, asset quality remains a major concern,” says FDIC Chairmanh Sheila Bair. “Banks are making good efforts to deal with thechallenges they’re facing, but today’ report says that we’re not out of the woods To that point, 21 FDIC-insure d institutions failed during the first quarter the largest number since the fourth quarte r of 1992. Insured institutions set aside $60.
89 billion in provisions for loan losses in thefirsgt quarter. That’s up $23.7 billion, or 63.6 from the first quarter of 2008. Expenses for goodwill impairment andother intangible-asset expenses totaled $7.2 billion, up from $2.8 billiohn a year earlier. Those negativde factors outweighed the positive effects of increasex noninterestincome (up $7.8 billion, or 12.8 percent) and highefr net interest income (up $4.4 or 4.7 percent). Insuresd institutions charged off $37.8 billionb in bad loans in the first almost twicethe $19.6 billion of a year Tier 1 capital reached a record high of almost $70 the largest quarterly increase ever reported by the industry.
much of the increase occurred at institutions that receivef capital fromthe U.S. Treasury Department’s Troubled Asseyt Relief Program. Total assets declinex by $302 billion due to downsizingh by a fewlarge banks. Two-thirdsx of all institutions reported asset growth inthe quarter, but reductionse at eight large banks causec the industry total to decline. Total loans and leases fell by $159.6 billion (2.1 percent), while assets in trading accounts declinedby $144.5 billion (14.98 percent).