U.S. banks saw a significant increase in profits in the third quarter, and the number of bank failures is down for the year so far, the Federal Deposit Insurance Corporation (FDIC) said Tuesday.
Net income in the third quarter was $37.6 billion, a 6.6-percent increase over the corresponding quarter last year, the FDIC said in its quarterly banking profile. The percentage of banks reporting gains in their earnings was 57.5 percent.
The last time US banks earned that much was before the financial crisis, Bloomberg news reported. It was the 13th straight quarter that banking profits improved over the prior year.
Chairman Martin Gruenberg said in previous quarters that the FDIC has noted that earnings growth could be traced to lower provisions for loan losses, but in this quarterly report higher revenue contributed more to the increase in earnings than reduced provisions.
Deposit growth increased by $181.7 billion in the third quarter, rising from a 61.5-billion-dollar increase in the preceding three-month period.
The FCIC guarantees customer deposits for up to $250,000 against bank failures. It keeps a confidential list of banks deemed to be at greater risk of collapse.
In the third quarter, the number of banks on that list fell to 694 from 732, the smallest number since the third quarter of 2009. So far this year, 50 banks have failed, compared with 90 failures reached by the same point in 2011.
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