FDIC: Banks Earn $141.3 Billion in 2012, Second-Highest Annual Haul Ever

CitigroupWASHINGTON (AP) - Profits at U.S. banks jumped almost 37 percent for the October-December period, reaching the highest level for a fourth quarter in six years as banks continued to step up lending.

The figures are fresh evidence of the industry's sustained recovery more than four years after the financial crisis.

Banks earned $34.7 billion in the last three months of 2012, up from $25.4 billion a year ago and the highest for a fourth quarter since 2006, the Federal Deposit Insurance Corp. reported Tuesday. Sixty percent of banks reported improved earnings from the fourth quarter of 2011, the agency said.

The FDIC, created during the Great Depression to ensure bank deposits, monitors and examines the financial condition of U.S. banks.

For all of 2012, the agency said bank earnings rose 19 percent to $141.3 billion, the second-highest annual level ever.

The number of banks on the agency's "problem" list fell to 651 from 694. Banks had lower losses on loans in the fourth quarter and set aside almost 25 percent less to cover potential losses than in the final quarter of 2011.

"The improving trend that began more than three years ago gained further ground in the fourth quarter," FDIC Chairman Martin Gruenberg said at a news conference. Still, "troubled loans, problem banks and bank failures remain at elevated levels, while growth in lending and revenue remains sluggish," he said.

Banks with assets exceeding $10 billion drove the bulk of the earnings growth in the October-December period. While they make up just 1.5 percent of U.S. banks, they accounted for about 82 percent of the industry earnings.

Those banks include Bank of America Corp. (BAC), Citigroup Inc. (C), JPMorgan Chase & Co. (JPM) and Wells Fargo & Co. (WFC). Most of them have recovered with help from federal bailout money and record-low borrowing rates.

Gruenberg noted that banks' profit from interest they charge has been eroded by historically low interest rates during the economic recovery. Banks' net interest income fell to $104.4 billion in the fourth quarter from $107.1 billion a year earlier. That was the lowest quarterly level since the final three months of 2009, the FDIC said.

The decline in interest income has made banks increasingly reliant on the fees they charge.

For the sixth time in seven quarters, banks' lending increased. It rose by 1.7 percent in the fourth quarter, led by growth in commercial and industrial loans, and credit cards. That shows banks are becoming less cautious, which could help the economy. More lending leads to more consumer spending, which drives roughly 70 percent of economic activity.

Home equity loans fell by 2.2 percent, however.

So far this year, three banks have failed. That follows 51 closures last year, 92 in 2011 and 157 in 2010. The 2010 closures were the most in one year since the height of the savings and loan crisis in 1992.

In the fourth quarter, the decline in bank failures allowed the insurance fund to continue to strengthen. The fund, which turned from deficit to positive in the second quarter of 2011, had a $32.9 billion balance as of Dec. 31, according to the FDIC. That compares with $25.2 billion at the end of September.

The FDIC is backed by the government, and its deposits are guaranteed up to $250,000 per account. Apart from its deposit insurance fund, the agency also has tens of billions in loss reserves.

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The bank monopoly was thriving long before Obama got in.
The fat cats that own the banks have been having a field day since 1913 when the federal reserve cabal got in.
They lend money at 5% and then pay 1/50th of that to you in interest, and the world puts up with it!

February 26 2013 at 10:08 PM Report abuse rate up rate down Reply

Is there a hiccup here ? It says there are technical problems and can't send but it posts anyway.

February 26 2013 at 10:00 PM Report abuse rate up rate down Reply

Have they paid back the multiple stimulus payments ? How about the prince ?
Must be all of the low interest and add on fees like the overdraft fees, late fees, and the wire fees for phone payments. You would think they would do more to help the account holders and homeowners they screwed over.
Then there is the bank that took stimulus money to build a new call center and not only built the center but hired another off shore call center. How many foreign jobs did they create ?

February 26 2013 at 9:54 PM Report abuse rate up rate down Reply
king Michael

Yet JP Morgan Chase has a nearly concurrent press release that they will be laying off 17,000 employees over the next two years to increase profit margin. How much is enough for the fat cats at the top? They make unbridled salaries, bonuses and perks, even when the Banks underperform (i.e. Citi etc.), and yet they want more. Is there something wrong with this picture?

February 26 2013 at 9:36 PM Report abuse rate up rate down Reply

and the government bailed these bastards out?they are to big to fail.but the american people can go to hell.i would have rather they would have paid every americans mortgage off.but whydo that they will never do anything to help an american.back or white.these people want to keep us down

February 26 2013 at 9:20 PM Report abuse rate up rate down Reply
Forest Chump

Off the blood of the little guy, with "too big to fail" bail out money...

February 26 2013 at 9:16 PM Report abuse rate up rate down Reply

BO's drinkin' buddies....lol.

February 26 2013 at 9:02 PM Report abuse rate up rate down Reply

The pretense that the economy and the welfare of society are connected was dispensed with long ago. Welcome to Blade Runner, except in our case there are no "off world planets" for the wealthy to escape to.

February 26 2013 at 8:18 PM Report abuse rate up rate down Reply

"Credit Union"
nuff said

February 26 2013 at 7:30 PM Report abuse rate up rate down Reply
1 reply to andre747's comment

They borrow from the same Banksters, the federal reserve.

February 26 2013 at 10:09 PM Report abuse rate up rate down Reply

"Credit Union"
nuff said

February 26 2013 at 7:30 PM Report abuse rate up rate down Reply