America’s banks posted total income of $40.3 billion for a 17 percent year-over-year increase during the fourth quarter last year, boosted by lower expenses for loan-loss provisions and reductions in litigation reserves, the FDIC said this week in its most recent quarterly banking profile.
In its report, the FDIC said that 53 percent of insured banks posted higher year-over-year quarterly earnings, while the percentage of institutions posting quarterly losses fell year-over-year from 15 percent to 12.2 percent.
Last year’s fourth quarter also saw the smallest number of bank failures nationwide – just two, in fact – since the second quarter of 2008.
However, noninterest income took a hit during the fourth quarter, as banks posted lower year-over-year income from the sale, securitization and servicing of one-to-four family residential mortgage loans, which were down $2.8 billion or 34.4 percent from the year-ago period. Income from trading also declined $1.4 billion, or 32.2 percent, and realized securities gains declines 66.6 percent to $1 billion.
Net charge-offs of loans and leases declined $6.8 billion, or 36.7 percent, to $11.7 billion during the fourth quarter, making it the 14th consecutive quarter that net charge-offs have posted a year-over-year decline.
Industry-wide assets increased $126.6 billion, just less than a percent, as loan portfolios grew for the ninth time in the past 11 quarters. Total loan and lease balances increased $90.9 billion, breaking down into a $27.3 billion, or 1.7 percent, increase in commercial industrial loans; a $17.1 billion, or 1.6 percent, increase in real estate loans secured by nonfarm, nonresidential properties, and a $14.3 billion, or 2.1 percent, increase in credit card balances. The FDIC said that 65.1 percent of banks reported growth in their loan portfolios during the fourth quarter.
For the full year, industry net income totaled $154.7 billion, a $13.6 billion or 9.6 percent increase over 2012, making 2013 the fourth consecutive year that full-year earnings have risen.
