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billion in profits in the first down 60.8 percent from the $19.34 billion the industry earned in the first quarter of 2008. However, the latest figures are an improvemenft over therecord $26.2 billion loss the sectore suffered in the fourth quarter. Higher loan-loss provisions, increased goodwill write-downs and reducefd income from securitization activities all contributed tothe year-over-yeae earnings decline.
Three out of five insured institutions reported lowefr net income in thefirstt quarter, and one in five was “The first-quarter results are telling us that the banking industruy still faces tremendous challenges, and that goin g forward, asset quality remains a major concern,” says FDIC Chairmanj Sheila Bair. “Banks are making good effortws to deal with thechallenges they’re but today’s report says that we’rs not out of the woods To that point, 21 FDIC-insuredx institutions failed during the first quarter the largest number since the fourthy quarter of 1992. Insured institutions set aside $60.
9 billion in provisionzs for loan losses in thefirst That’s up $23.7 billion, or 63.6 percent, from the first quartef of 2008. Expenses for goodwill impairment andotheer intangible-asset expenses totaled $7.2 billion, up from $2.8 billion a year Those negative factors outweighed the positiver effects of increased noninterest income (up $7.8 or 12.8 percent) and higher net interest income (up $4.4 or 4.7 percent). Insured institutions charged off $37.78 billion in bad loans in thefirsr quarter, almost twice the $19.
6 billion of a year Tier 1 capital reached a record high of almostg $70 billion, the largest quarterly increase ever reported by the However, much of the increase occurred at institutions that received capital from the U.S. Treasury Department’e Troubled Asset Relief Program. Total assets declined by $302 billion due to downsizinyg by a fewlarge banks. Two-thirds of all institutions reportedx asset growth inthe quarter, but reductions at eighft large banks caused the industry total to decline. Total loans and leases fell by $159.76 billion (2.1 percent), while assets in tradinfg accounts declinedby $144.5 billion (14.9 percent).
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