FDIC-insured institutions report aggregate 4Q earnings decrease

Federal Deposit Insurance Corp.-insured commercial banks and savings institutions reported aggregate fourth-quarter net income of $36.9 billion, a 7.3 percent decrease compared to $39.8 billion in the same quarter of 2013.

FDIC officials said the profit drop was largely attributable to $4.4 billion in litigation expenses reported by some larger industry banks. Of the 6,509 insured reporting institutions, 61.2 percent had quarterly earnings growth. Unprofitable banks represented 9.4 percent of total, down from 12.7 percent a year earlier, according to a news release.

Fourth-quarter financial notes:

• Community banks - which represent 92.7 percent of all FDIC-insured institutions - bumped up aggregate net income 27.7 percent to $4.8 billion.
• Loan and lease balances rose 1.8 percent to $8.3 trillion for the industry as a whole.
• The average return on assets dropped to 0.96 percent from 1.09 percent a year earlier.

During 2014, aggregate profits for FDIC-insured institutions decreased 1.1 percent to $1.7 billion, representing the first year-to-year decline in five years, according to the release.

The number of "problem" banks - those suffering from issues with capital, assets, management, earnings, liquidity or sensitivity to market conditions - dropped to 291 at year’s end, the lowest level since the close of 2008. The problem-bank level is now 67 percent below a post-crisis high of 888 set in first-quarter 2011.[[In-content Ad]]