By Ronald D. Orol, MarketWatch
WASHINGTON (MarketWatch) — Bank profits decreased slightly in the second quarter while loan balances rose for the fourth time in the last five quarters, a federal bank regulator said Tuesday.
Banks earned $34.5 billion in the second quarter, down from $34.8 billion in the first quarter, but up from $28.5 billion in the second quarter of 2011, the Federal Deposit Insurance Corp. said in a quarterly report.
“The banking industry continues to make gradual but steady progress towards recovery in the second quarter,” FDIC acting chairman Martin Gruenberg said.
Expenses for loan-loss provisions were $5 billion lower than a year ago, accounting for the “lion’s share” of year-over-year improvements in earnings.
Loans and leases at banks grew by $102 billion compared to the first quarter, with loans to commercial and industrial borrowers increasing by $48.9 billion and residential mortgage loans rising by $16.6 billion.
The number of banks in financial distress continued to decline. The number of banks on the FDIC’s “problem list” fell to 732 from 772 during the second quarter of 2012 and the assets of problem institutions declined to $282 billion from $292 billion.
Ronald D. Orol is a MarketWatch reporter, based in Washington.
