• FDIC Releases Quarterly Banking Profile
  • December 3, 2009
  • Law Firm: Alston & Bird LLP - Atlanta Office
  • Yesterday, the FDIC issued its Quarterly Banking Profile for the 3rd Quarter.   FDIC Chairman, Sheila Bair stated, "[t]oday's report shows that, while bank and thrift earnings have improved, the effects of the recession continue to be reflected in their financial performance.”  She went on to state, “[w]ith regard to the decline in loan balances, Chairman Bair said, "[t]here is no question that credit availability is an important issue for the economic recovery. We need to see banks making more loans to their business customers. This is especially true for small businesses that rely on FDIC-insured institutions to provide over 60 percent of the credit they use."  Most importantly, the Quarterly Banking Profile revealed that:

    • The number of institutions on the FDIC's "Problem List" rose to its highest level in 16 years. At the end of September, there were 552 insured institutions on the "Problem List," up from 416 on June 30
    • As projected in September, the FDIC's Deposit Insurance Fund (DIF) balance - or the net worth of the fund - fell below zero for the first time since the third quarter of 1992
    • Both the quarterly net charge-off rate and the percentage of loans and leases that were noncurrent (90 days or more past due or in nonaccrual status) rose to the highest levels in the 26 years that insured institutions have reported these data
    • Quarterly earnings were more than three times the $879 million the industry earned a year earlier and represented an improvement over the industry's $4.3 billion net loss in the second quarter of 2009
    • More than 26 percent of all insured institutions reported a net loss in the latest quarter, up slightly from nearly 25 percent a year earlier