The FDIC attributes the successful year to higher income and lower provisions for loan losses. Loan balances increased for the sixth time in the last seven quarters in the fourth quarter, rising by $118.2 billion.
Banks set aside $4.9 billion, or 25 percent, less for bad loans in the fourth quarter. That’s the 13th consecutive quarter of decline and a signal that the industry’s health is improving. There were $18.6 billion in net charge-offs, down $7 billion from the same period in the previous year.
The FDIC’s problem list of at-risk banks continued to decline for the seventh consecutive quarter, falling to 651 banks from 694 in the previous quarter. The number of problem banks has fallen significantly since maxing out at 888 in the first quarter of 2011, during the financial crisis.
“The industry recovery over these past three years has been aided by the slow but steady growth in the economy over that period,” Mr. Gruenberg.
© Copyright 2013 The Washington Times, LLC. Click here for reprint permission.
Tim Devaney is a national reporter who covers business and international trade for The Washington Times. Previously, he worked for the Detroit News, Grand Rapids Press, Portland Press Herald and Bangor Daily News. Tim can be reached at tdevaney@washingtontimes.com.
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