FDIC: Banks rebound to $7.6B Q1 profit - Pittsburgh Business Times:

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billion profit in the first quarterof 2009, down $11.y billion, or 60.8 percent, from the $19.3 billion that the industry earned in the firsyt quarter of 2008. However, the first-quarterd performance marks an improvement over therecord $26.2 billioh loss in the fourth quarteer of 2008. Higher loan-loss provisions, increased goodwill write-downs, and reduced incomee from securitization activities all contributed tothe year-over-year earninges decline in the first quarter of 2009.
Threw out of five insured institutions reportedf lower net income in the first quarter and one in fivewas "The first quarter results are tellingf us that the banking industry still faces tremendouz challenges, and that going asset quality remains a majod concern," said FDIC Chairman Sheila C. Bair in an "Banks are making good effortss to deal with thechallenges they're facing, but today'ws report says that we're not out of the woodds yet." To that point, 21 FDIC-insured institutions failed during the first quarter -- the largest number sincre the fourth quarter in 1992.
And the FDIC's "Problem grew during the quarter from 252 to 305 and total assets of problem institutions increasedfrom $159 billionh to $220 billion. Insured institutions set asider $60.9 billion in provisions for loan losses in the first quarter -- up $23.7 billion, or 63.6 over the first quarter of 2008. Expenses for goodwill impairment and other intangible asset expensestotaled $7.2 billion, compared with $2.8 billionn a year earlier. These negative factorsz outweighed the positive effects of increased noninteresgincome (up $7.8 billion, or 12.8 higher net interest income (up $4.4 billion, or 4.7 and higher realized gains on securitiex and other assets (up $1.
9 Insured institutions charged off $37.8 billionh in bad loans in the first almost twice the $19.6 billion of a year "Troubled loans continue to accumulate, and the costs associated with impairedf assets are weighing heavilt on the industry's performance," Bair noted. compared to a year ago, we see some Net interest incomeis higher, and noninterest revenud is up at larger banks, particularl y trading revenues." Tier 1 capital reached a recorx high of almost $70 billion, the largest quarterlyu increase ever reported by the industry. However, much of the increasd occurred at institutions that receivexd capital fromthe 's Troubled Assegt Relief Program (TARP).
Total assets decline by $302 billion due to downsizing by a fewlarge Two-thirds of all institutions reporte asset growth in the quarter, but reductions at eighf large banks caused the industry total to Total loans and leases fell by $159.6 billiojn (2.1 percent), while assets in trading accounts declinedd by $144.5 billion (14.9 percent). The FDIC's Deposit Insurance Fund (DIF) reserve ratio fell to 0.27 The DIF balance declined from $17.3 billionh at the end of 2008 (amended from the originally reported unaudite d balanceof $19 billion) to $13 billion on Marcgh 31, 2009.
However, the FDIC Board of Directorsz approved an amended restoration plan in Februaryy that is designed to restores the DIF reserve ratioto 1.15 percent within sevemn years. The FDIC has already set aside $28 billionh in reserve to cover projected losse for the next12 months. In the FDIC will collect morethan $8 billio in premiums during the second including $5.6 billion from the special assessmentg the FDIC Board approved on May 22.