Wisconsin Banking News

FDIC’s list of ‘problem banks’ remains long

FDIC’s list of ‘problem banks’ remains long
The number of problem banks reached 829 during the second quarter while the income of insured institutions reached $21.6 billion, the Federal Deposit Insurance Corp. (FDIC) reported.
The FDIC still expects bank failures in 2010 to exceed 2009 levels of 140, as 118 institutions have failed so far this year.
"Particularly given economic uncertainties we believe that all banks should continue to exercise caution and maintain strong reserves. The high level of troubled loans reflects the ongoing challenges that many banks face," said FDIC Chairman Sheila Bair.
U.S. lenders posted their biggest quarterly profit in almost three years, even as the number of banks at risk of failure rose to 11 percent of the insured institutions, the FDIC said.
Bank profits rose to $21.6 billion in the three-month period that ended June 30, an increase from $18 billion in the first quarter, the FDIC said in its quarterly report on industry performance.
“The economic recovery that began last year is beginning to be reflected in the rising earnings and improving credit quality,” Bair said.
The FDIC had 829 banks with $403 billion in assets on its list of so-called problem lenders at the end of the second quarter, a 7 percent increase from the 775 the on the list at the end of the first quarter. The agency does not disclose which banks are on that list>
“Earnings remain low by historical standards, and the numbers of unprofitable institutions, problem banks, and failures remain high,” Bair said.

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