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FDIC's Second Quarter Report - Number of Problem Banks Increased to 829


FDIC's Second Quarter Report - Number of Problem Banks Increased to 829

The FDIC released its second 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 $21.6 billion in the second quarter of 2010, a $26 billion improvement from the $4.4 billion net loss the industry posted in the second quarter of 2009.
  • The number of institutions on the FDIC's "Problem List" rose from 775 to 829.
  • The total assets of "problem" institutions declined from $431 billion to $403 billion.
  • The Deposit Insurance Fund (DIF) balance improved for the second quarter in a row. The DIF balance - the net worth of the fund - improved from negative $20.7 billion to negative $15.2 billion during the second quarter.
  • The FDIC's liquid resources - cash and marketable securities - remained strong. Liquid resources stood at $44 billion at the end of the second quarter, a decline from $63 billion at the end of the first quarter.
  • Forty-five insured institutions failed during the second quarter.
  • Total loans and leases declined by $107.5 billion (1.4 percent) during the quarter.
  • Total insured deposits declined by 0.7 percent ($39 billion) during the quarter.
  • 7,830 FDIC-insured banks and savings associations

The banks' profits of $21.6 billion in the second quarter is up from $18 billion in the first quarter. I'm sure the low deposit rates are helping the banks improve their profits. Unlike the first quarter, there was a decline in total insured deposits in the second quarter. Perhaps people had enough of the low rates and have decided there are better places for their money. Fewer deposits should help a little in keeping deposit rates from falling. However, the decline in loans won't help.

The FDIC doesn't name any of the 829 problem banks. Calculated Risk Blog has an unofficial list of 840 problem banks based on public enforcement actions.

Credit Union Q2 Report

The NCUA also issued its second quarter report on credit unions (pdf). Some noteworthy statistics include:

  • Share (deposit) growth slowed to 0.6 percent during the second quarter (compared to an 11% annual rate increase in the first quarter)
  • Shares still grew six times faster than loans, which grew only 0.1 percent
  • More than 95 percent of federally insured credit unions still exceed the statutory definition of "well capitalized."
  • 7,445 federally insured credit unions

So far this year there have been 118 bank failures and 13 credit union failures

In addition to the quarterly report, the FDIC updated its database with the banks' financial data for the end of the second 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 access this data by searching for your bank or credit union in our Bank reviews page. We already have updated the database with NCUA's June credit union data.

BauerFinancial typically takes a couple of weeks to update its ratings. Bankrate.com has been taking almost two months before it updates its ratings.

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