In its latest quarterly report on U.S. banks, the FDIC said lower provisions for loan losses, reflecting an improving trend in asset quality, lifted fourth-quarter net income of FDIC-insured U.S. banks. Fourth-quarter earnings totaled $26.3 billion, an increase of $4.9 billion (23.1%) compared with the same period of 2010.
Insured institutions set aside $19.5 billion in provisions for loan losses in the fourth quarter, a decline of $13.1 billion (40.1%) from fourth quarter 2010. The FDIC also noted that overall revenues continue to exhibit weakness for the third time in the last four quarters, with net operating revenue posting a year-over-year decline caused primarily by a $4.4 billion reduction in non-interest income.
The regulator said full-year 2011 net income rose to a five-year high. Net income totaled $119.5 billion, an increase of $34 billion (39.8%) from full-year 2010 earnings. This is the highest annual net income total since the industry earned $145.2 billion in 2006. The improvement in full-year net income was made possible by an $81.1 billion reduction in loan loss provisions.
To read the full FDIC Quarterly Banking Profile, click here.
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