- [FDIC-insured banks] reported aggregate net income of $2.8 billion in the third quarter of 2009, but loan balances declined by the largest percentage since quarterly reporting began in 1984
- Net interest margins improved to a four-year high
- At the end of September, there were 552 insured institutions on the "Problem List," up from 416 on June 30
- Total assets of "problem" institutions increased during the quarter from $299.8 billion to $345.9 billion
- Fifty institutions failed during the third quarter, bringing the total number of failures in the first nine months of 2009 to 95
- 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
- The fund balance of negative $8.2 billion as of September already reflects a $38.9 billion contingent loss reserve that has been set aside to cover estimated losses over the next year.
- Total insured deposits increased by 10 percent ($491.5 billion), reflecting new data collected on the temporary increase in the standard maximum FDIC deposit insurance amount from $100,000 to $250,000.
According to Chairman Bair, they should be able to handle future failures through 2010 thanks to the recent prepay assessment that banks will have to pay:
To further bolster the DIF's cash position, the FDIC Board approved a measure on November 12th to require insured institutions to prepay three years worth of deposit insurance premiums – about $45 billion – at the end of 2009. "This measure will provide the FDIC with the funds needed to carry on with the task of resolving failed institutions in 2010"
One thing that's helping improve the banks' profits (and hurting savers) is the interest margins. According to the press release:
Net interest margins improved to a four-year high. The average margin (the difference between the average yield on interest-earning assets and the average interest expense of funding those assets) rose to 3.51 percent from 3.48 percent in the second quarter and 3.37 percent in the third quarter of 2008.
In addition to the quarterly report, the FDIC updated its database with the banks' financial data for the end of the third quarter. Ratings services like BauerFinancial and Bankrate.com use this data for their star ratings. Recent ratings have been based on 6/30/09 data. Their new ratings based on 9/30/09 data should be out soon. BauerFinancial has typically been the first to include the new data.
