U.S. Banks' Earnings Rise Again
NEW YORK (TheStreet) -- U.S. banks and thrifts earned $34.5 billion during the second quarter for the industry's twelfth consecutive quarter of improved performance, according to a Federal Deposit Insurance Corp. report issued Tuesday.
The second-quarter results compared to earnings of $35.3 billion during the first quarter, and $28.5 billion during the first quarter of 2011.
Banks continued to see their earnings boosted by releases of loan loss reserves, which declined by $6.7 billion, to $176.5 billion. The FDIC said that over 54% of banks had actually increased reserves during the second quarter, while 38% reduced their loan loss reserves, "but the reductions were concentrated among larger institutions, and added up to more than the additions."
Even with the continued release of reserves, the FDIC said that "the larger drop in noncurrent loan balances during the quarter meant that the industry's 'coverage ratio' of reserves to noncurrent loans inched up from 60 percent to 60.4 percent between March 31 and June 30."