The FDIC released its third quarter 2010 profile on the banking industry. Here are some of the noteworthy excerpts from the press release:
- Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reported an aggregate profit of $14.5 billion in the third quarter of 2010, a $12.5 billion improvement from the $2 billion the industry earned in the third quarter of 2009.
- The number of institutions on the FDIC's "Problem List" rose from 829 to 860.
- The total assets of "problem" institutions declined from $403 billion to $379 billion.
- The Deposit Insurance Fund (DIF) balance improved for the third consecutive quarter. The DIF balance - the net worth of the fund - improved from negative $15.2 billion to negative $8 billion during the third quarter.
- The FDIC's liquid resources — cash and marketable securities - remained strong. Liquid resources stood at $43.7 billion at the end of the third quarter, essentially unchanged from the second quarter.
- 41 insured institutions failed during the third quarter (down from 45 in the second quarter)
- Total loans and leases held by FDIC-insured institutions declined by just $6.8 billion, or 0.1 percent, in the third quarter (there was a $107.5 billion decline in the 2nd quarter)
- Total insured deposits declined by 0.3 percent ($15 billion) during the quarter (there was a decline of $39 billion in the 2nd quarter)
- 7,760 FDIC-insured banks and savings associations
Total loans declined by much less than it did in the second quarter. That's a good sign for depositors. With more loan demand, banks will need more deposits and that should help deposit rates. Another thing that should help a little is the reduction of total deposits. However, the decline was smaller than it was in the second quarter. The best case for depositors is when banks have lots of loans and not enough deposits. That requires them to offer higher deposit rates.
The FDIC doesn't name any of the 860 problem banks. Calculated Risk Blog has an unofficial list of 903 problem banks based on public enforcement actions.
So far this year there have been 149 bank failures.
In addition to the quarterly report, the FDIC updated its database with the banks' financial data for the end of the third quarter 2010. In the next few days we should have our database of bank financials updated so our health scores and Texas Ratios will be based on this latest data. You can view a table of banks and credit unions with the worst Texas Ratios in our Bank Health Ratings page. From here you can also search for your bank and credit union to view its Texas Ratio and health score.
BauerFinancial typically takes a couple of weeks to update its ratings. Bankrate.com has been taking one to two months before it updates its ratings.