FDIC-Insured Banks Report Record Q1 Profit

The ""FDIC"":http://fdic.gov/ has released its first quarter report for 2013, and it looks promising.

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Overall, the commercial banks and savings institutions covered by the FDIC reported an aggregate net income yielding of $40.3 billion this quarter, an impressive $5.5 billion (or 15.8 percent) rise from last year's $34.8 billion.

The good news continues as this statistic marks the 15th consecutive quarter that has reported an overall earnings increase. The average return on assets (ROA) also increased to a positive 1.12 percent, up from last year's 1.00 percent and likewise represents the highest quarterly ROA since 2007.

Regarding these statistics, FDIC Chairman Martin J. Gruenberg had this to say:

""Today's report shows further progress in the recovery that has been underway in the banking industry for more than three years. We saw improvement in asset quality indicators over the quarter, a continued increase in the number of profitable institutions, and further declines in the number of problem banks and bank failures. However, tighter net interest margins and slow loan growth create an incentive for institutions to reach for yield, which is a matter of ongoing supervisory attention.""

The report also posted several key findings, first of which was that total loan balances declined this quarter, falling by $36.8 billion (0.5 percent). Balances in credit card and home equity lines dipped as well.

The total amount of banks in financial distress also fell this quarter, a statistic revealed on the FDIC's bank ""Problem List,"" which dipped from a total of 651 to 612.

Encouraging was the fact that only 13 reported bank failures reached the FDIC's radar this quarter versus almost twice that amount during the same time period last year. Yet another positive point is that the Deposit Insurance Fund (DIF) balance (a representation of the net worth of the fund) remained on the rise, reaching to $35.7 billion from the previous $33 billion. Assessment income was considered to be the main factor in that increase.