WASHINGTON (AP) – U.S. banks’ earnings rose 6.9 percent in the first quarter from a year earlier as revenues increased, delinquent loans continued to fall and the number of “problem” banks reached a six-year low.
The data issued Wednesday by the Federal Deposit Insurance Corp. showed “gradual but steady improvement” for the banking industry, FDIC Chairman Martin Gruenberg said at a news conference. Still, low interest rates continued to crimp banks’ profit margins on loans during the January-March period.
The FDIC reported that U.S. banks earned $39.8 billion in the first quarter, up from $37.2 billion a year earlier.
Nearly 63 percent of banks reported an increase in profit in the first quarter from a year earlier. Only 5.6 percent of banks were unprofitable – the lowest percentage of unprofitable institutions since the second quarter of 2005.
The volume of delinquent loans fell by 6 percent, and the average noncurrent loan rate declined from 1.96 percent to 1.83 percent, a seven-year low. Banks also increased by nearly 10 percent, or $756 million, the amounts they set aside to cover losses on loans. Lending grew by 0.6 percent, or $52.5 billion.