FDIC: Banking sector hammered in Q3
The latest Quarterly Banking Profile (QBP -- PDF link) from the FDIC was released today. This comprehensive document provides lots of juicy details about the performance of the U.S. banking sector. As you might expect based on the headlines we've been seeing lately, the news isn't that good. Some details:
* The banking sector earned a cumulative $1.7 billion in the third quarter, down 94% from $28.7 billion in the year-earlier quarter. That was the second-worst reading since Q4 1990 (behind Q4 2007). Almost six in 10 institutions reported a drop in profit, while about one in four reported a quarterly loss.
* Provisions for loan losses exploded to $50.5 billion from $16.8 billion a year earlier. Net Interest Margins (NIM) improved to 3.37% from 3.35% a year earlier, helping boost net interest income by 4.9% YOY. But noninterest income dropped 1.5%. Securitization income plunged by 33%, while gain on asset sales (other than loans) tanked 78.7%. Banks lost 588% more on the sale of foreclosed real estate than a year earlier.
* Net charge offs surged 156.4% to $27.9 billion in the quarter. First mortgage and closed-end second mortgage charge offs were up 423%, while real estate construction and development C-Os rose 744%. HELOC charge offs surged 306%. Commercial and Industrial COs rose 139%, while credit card COs climbed 37.4%. The quarterly CO rate rose to 1.42% from 0.57% a year earlier.
* Noncurrent loans and leases rose to $184.3 billion, up 122% YOY. The percentage of loans NCLs increased across the board, with closed end first and second mortgages leading the way at +14.3%. While loan loss reserves rose 8.1% in the quarter, bringing the ratio of reserves to toal loans and leases to a 13-year high of 1.95%, NCLs rose faster than reserves. Result: The coverage ratio of reserves to NCLs fell to 85 cents for ever $1 of NCLs -- the lowest level since Q1 1993.
* Nine institutions failed in the third quarter, the highest quarterly tally in 15 years. With $307 billion in assets, Wamu was by far and away the biggest failure in the quarter and the FDIC's 75-year history. The number of financial institutions on the FDIC's "problem list" jumped to 171 from 117, while the total assets of problem institutions climbed to $115.6 billion from $78.3 billion.
* The banking sector earned a cumulative $1.7 billion in the third quarter, down 94% from $28.7 billion in the year-earlier quarter. That was the second-worst reading since Q4 1990 (behind Q4 2007). Almost six in 10 institutions reported a drop in profit, while about one in four reported a quarterly loss.
* Provisions for loan losses exploded to $50.5 billion from $16.8 billion a year earlier. Net Interest Margins (NIM) improved to 3.37% from 3.35% a year earlier, helping boost net interest income by 4.9% YOY. But noninterest income dropped 1.5%. Securitization income plunged by 33%, while gain on asset sales (other than loans) tanked 78.7%. Banks lost 588% more on the sale of foreclosed real estate than a year earlier.
* Net charge offs surged 156.4% to $27.9 billion in the quarter. First mortgage and closed-end second mortgage charge offs were up 423%, while real estate construction and development C-Os rose 744%. HELOC charge offs surged 306%. Commercial and Industrial COs rose 139%, while credit card COs climbed 37.4%. The quarterly CO rate rose to 1.42% from 0.57% a year earlier.
* Noncurrent loans and leases rose to $184.3 billion, up 122% YOY. The percentage of loans NCLs increased across the board, with closed end first and second mortgages leading the way at +14.3%. While loan loss reserves rose 8.1% in the quarter, bringing the ratio of reserves to toal loans and leases to a 13-year high of 1.95%, NCLs rose faster than reserves. Result: The coverage ratio of reserves to NCLs fell to 85 cents for ever $1 of NCLs -- the lowest level since Q1 1993.
* Nine institutions failed in the third quarter, the highest quarterly tally in 15 years. With $307 billion in assets, Wamu was by far and away the biggest failure in the quarter and the FDIC's 75-year history. The number of financial institutions on the FDIC's "problem list" jumped to 171 from 117, while the total assets of problem institutions climbed to $115.6 billion from $78.3 billion.
posted by Mike Larson at
10:41 AM
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