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The banking industry’s struggles
continued in the first quarter of 2008 as total
income dropped to $19.3 billion compared with $35.6
billion in the first quarter of 2007, according to
the FDIC Quarterly Banking Profile .
Much of the earnings drop at FDIC-insured
commercial banks and savings institutions was
attributed to a jump in loanloss provisions, which
increased from $9.2 billion in the first quarter
of 2007 to $37.1 billion in the first quarter of
2008. The FDIC’s “Problem List” grew from 76 to 90
institutions in the first quarter. Total assets of
problem institutions grew from $22.2 billion to
The report is available at
Record provisions for loan losses
contributed to combined losses of $617 million for
the nation’s thrifts in the first quarter of 2008,
according to the Office of Thrift Supervision.
This was an improvement from an $8.75 billion loss
in the fourth quarter of 2007, but was down from
net income of $3.61 billion in the first quarter
of 2007. Loan-loss provisions were a record $7.6
billion in the first quarter and a combined $16.6
billion in the past three quarters.
Director John Reich said he has “been urging
managers of OTS-regulated thrift institutions to
be aggressive in setting aside provisions for
expected loan losses. This forceful response to
the housing market crisis continues to depress
industry earnings, but it also strengthens
institutions to withstand future challenges.”
Mortgage originations were down 20% from the
fourth quarter and 21% compared with the year-ago
period. Delinquencies also continued to increase
compared with both prior periods.
report, with highlights and charts, is available