Academic journal article Journal of Accountancy

FDIC-Insured Banks and Savings Institutions Reported an Aggregate Net Loss of $3.7 Billion in the Second Quarter of 2009, an $8.5 Billion Negative Swing from the $4.8 Billion Profit Insured Institutions Earned in the Second Quarter of 2008

Academic journal article Journal of Accountancy

FDIC-Insured Banks and Savings Institutions Reported an Aggregate Net Loss of $3.7 Billion in the Second Quarter of 2009, an $8.5 Billion Negative Swing from the $4.8 Billion Profit Insured Institutions Earned in the Second Quarter of 2008

Article excerpt

FDIC-insured banks and savings institutions reported an aggregate net loss of $3.7 billion in the second quarter of 2009, an $8.5 billion negative swing from the $4.8 billion profit insured institutions earned in the second quarter of 2008. The regulator also reported a sharp increase (36%) in the number of institutions on its "Problem List," and the industry's struggles continued to drain the FDIC's Deposit Insurance Fund (DIF).

Insured institutions earned $424 million in net operating income in the latest quarter even after a special assessment of $5.5 billion to bolster the DIE but one-time losses and other items totaling $4.1 billion pulled the industry results into negative territory. Loan-loss provisions were $66.9 billion, an increase of $16.5 billion (32.8%) over the second quarter of 2008. Noninterest expenses were $1.7 billion (1.7%) higher, primarily due to increased FDIC deposit insurance premiums. An increase in noninterest income (up $6.5 billion or 10.6%) helped stem industry losses.

Both the quarterly net charge-off rate and the percentage of loans and leases that were noncurrent (90 days or more past due or in nonaccrual status) reached the highest levels registered in the 26 years that insured institutions have reported these data. Insured institutions charged off a record $48.9 billion in uncollectible loans during the quarter, up from $26.4 billion a year earlier, and noncurrent loans and leases increased by $40.4 billion during the second quarter. At the end of June, noncurrent loans and leases totaled $332 billion, or 4.35% of the industry's total loans and leases.

The number of insured institutions on the "Problem List" (institutions at risk of failing) increased to 416 from 305 at the end of the first quarter. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.