May 29. 2012 8:00AM - Last modified: May 29. 2012 8:45AM

FDIC report shows economic recovery

Bank profits rose in the first quarter, reaching their highest quarterly income levels since the second quarter of 2007, according to the Federal Deposit Insurance Corp. (FDIC) quarterly banking report.

Bank net income for the first quarter of 2012 was $35.3 billion, up by $6.6 billion from the first quarter of 2011.
Meanwhile, bank revenues - driven partly by gains on loan sales - increased for only the second time in the past five quarters. Banks' net operating revenue increased by $5 billion year-over-year.
The FDIC said that once again lower provisions for loan losses contributed to earnings improvements.
Meanwhile, the number of banks on the FDIC's "problem list" fell to 772 from 813 during the first quarter of 2012, and the assets of problem institutions fell to $292 billion from $319 billion.
In Wisconsin, 271 FDIC-insured institutions reported net income of $205 million, up from $31 million in 2011. Total assets statewide were $96.7 billion for the quarter, down from $145 billion in the same period last year.
About one in 12 of the reporting institutions was unprofitable, compared to one in about eight banks in first quarter of 2011. More than 68 percent reported earnings gains, compared to about 59 percent in the same period a year ago.
The Wisconsin Bankers Association said the results show the economy is recovering as consumers pay down debt and more banks are turning a profit again.
Noncurrent loans, or those 90 days or more overdue, have dropped 46 percent statewide from the same period a year ago, which is a sign of bank and consumer health, according to the WBA.
Wisconsin banks disbursed $462 million in credit card loans in the first quarter, down from almost $1.5 billion in the same period last year, as consumers pay down debt.
“Noncurrent loans are significantly down, indicating consumers are more secure and able to meet their financial obligations,” said Rose Oswald Poels, president and CEO of the WBA. “Other indicators in the FDIC numbers illustrate that the general conditions of both banks and consumers in Wisconsin are noticeably improving.”