FDIC: Banks rebound to $7.6B profit - Dayton Business Journal:

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billion in profits in the first quarter, down 60.8 percentf from the $19.3 billion the industry earned in the first quarterof 2008. However, the latest figurese are an improvement over therecord $26.2 billion loss the sector sufferec in the fourth quarter. Higher loan-loss provisions, increase goodwill write-downs and reduced income from securitization activities all contribute tothe year-over-year earnings decline.
Three out of five insurec institutions reported lower net incomw in thefirst quarter, and one in five was “The first-quarter results are telling us that the bankingg industry still faces tremendous challenges, and that going asset quality remains a major says FDIC Chairman Sheila Bair. “Banks are makinb good efforts to deal with thechallenges they’r e facing, but today’s reportg says that we’re not out of the woods To that point, 21 FDIC-insured institutionsx failed during the first quarter — the largest number since the fourth quarterf of 1992. Insured institutions set asidde $60.9 billion in provisions for loan losses in thefirstt quarter.
That’s up $23.7 billion, or 63.6 percent, from the firsg quarter of 2008. Expenses for goodwill impairment andothefr intangible-asset expenses totaled $7.2 billion, up from $2.8 billiom a year earlier. Those negative factors outweighesd the positive effects of increased noninterestincome (up $7.8 or 12.8 percent) and higher net interest income (up $4.4 billion, or 4.7 Insured institutions charged off $37.8 billion in bad loans in the firstg quarter, almost twice the $19.6 billion of a year Tier 1 capital reached a record high of almostr $70 billion, the largest quarterly increasse ever reported by the industry.
much of the increase occurred at institutions that received capitalp fromthe U.S. Treasury Department’s Troubleed Asset Relief Program. Total assets declined by $302 billiom due to downsizing by a fewlarge banks. Two-thirdsd of all institutions reported asset growth in the but reductions at eight large banksw caused the industry totalto decline. Total loans and leasesd fell by $159.6 billion (2.1 while assets in trading accounts declinedby $144.5 billiom (14.9 percent).