NEW YORK (AP) – U.S. bank earnings rose 7.3 percent in the July-September quarter from a year earlier, as banks reduced their expenses and continued to lend out more money, which help drive up revenue.
The data issued Tuesday by the Federal Deposit Insurance Corp. showed that the banking industry continues to recover from the financial crisis that struck six years ago.
Banks and other financial institutions insured by the FDIC earned $38.7 billion in the third quarter, up from $36.1 billion a year ago. The percentage of unprofitable banks fell to 6.4 percent of institutions, versus 8.7 percent a year ago.
“The banking industry had another positive quarter,” FDIC Chairman Martin J. Gruenberg said in a statement. “Community banks, in particular, performed better than a year ago. Most importantly, third quarter income growth was based on revenue growth instead of lower loan-loss provisions. This can be a more sustainable foundation for continued earnings growth going forward.”
Banks loan balances rose by $50.2 billion to $8.2 trillion in the quarter, helped by an increase in commercial and industrial loans as well as auto loans. Mortgage lending activity fell slightly. However, overall lending is up 4.6 percent in the last year, a sign that banks are steadily loosening lending standards after the financial crisis.