Commercial Banks Earnings Rebound

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WASHINGTON (AP) - Earnings at the nation's commercial banks are rebounding from the worst year since the Depression in every region of the country except the Southwest, the government said Tuesday.

The Federal Deposit Insurance Corp., which insures deposits up to $100,000 in 13,540 banks, said earnings improved in all areas of the country except the Southwest. But that was enough to pull the industry-wide profit down somewhat from $5.3 billion in January-March 1987, to $5 billion for the same period this year.

Overall earnings were held back by a $1.64 billion loss in the Southwest. Nearly all of that is attributable to First RepublicBank Corp. in Dallas, which posted a $1.49 billion loss.

The FDIC has provided nearly $1 billion to stabilize First RepublicBank, the largest Texas banking organization, and may have to spend another $1 billion to attract a buyer to take it over.

Because of computer problems, earnings for individual states was not available, according to the FDIC.

FDIC Chairman L. William Seidman said he believes reserves for losses are now at appropriate levels for Third World loans and predicted improved profits this year, despite what is shaping up as the worst year ever for the Southwest.

He predicted 70 to 80 banks would fail in Texas this year, keeping overall banks failures at or above last year's record mark of 184. …