FDIC: Banks rebound to $7.6B profit - Dayton Business Journal:

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billion in profits in the first quarter, down 60.8 percen from the $19.3 billion the industry earnedr in the first quarterof 2008. However, the lates t figures are an improvement over therecord $26.2 billion loss the sector sufferedc in the fourth quarter. Higheer loan-loss provisions, increased goodwill write-downss and reduced income from securitizationn activities all contributed tothe year-over-year earnings Three out of five insurec institutions reported lower net income in the first quarter, and one in five was “The first-quarter results are telling us that the bankin g industry still faces tremendous challenges, and that goinbg forward, asset quality remains a majord concern,” says FDIC Chairman Sheila Bair.
“Banke are making good efforts to deal with thechallenges they’re but today’s report says that we’r not out of the woods yet.” To that point, 21 FDIC-insuree institutions failed during the firs quarter — the largest number since the fourth quarter of 1992. Insuref institutions set aside $60.9 billiobn in provisions for loan losses in thefirsg quarter. That’s up $23.7 billion, or 63.6 from the first quarter of 2008. Expenses for goodwill impairment andother intangible-asset expenses totale $7.2 billion, up from $2.8 billiob a year earlier. Those negative factors outweighed the positivew effects of increased noninterestincome (up $7.
8 billion, or 12.8 and higher net interest income (up $4.4 or 4.7 percent). Insured institutions charged off $37.8 billiohn in bad loans in the first almost twicethe $19.6 billion of a year Tier 1 capital reached a record high of almos $70 billion, the largest quarterly increas e ever reported by the industry. However, much of the increasde occurred at institutions that received capitakl fromthe U.S. Treasury Department’s Troublecd Asset Relief Program. Total assetxs declined by $302 billion due to downsizintg by a fewlarge banks.
Two-thirds of all institutions reportedx asset growth inthe quarter, but reductionse at eight large banks caused the industry total to Total loans and leases fell by $159.6 billionb (2.1 percent), while assets in trading accounts declined by $144.5 billion (14.9