It looks like members of the banking industry have a reason to be thankful.
The Federal Deposit Insurance Corp., or FDIC, released its Quarterly Banking Profile recently, and the report includes plenty of good news for banks. Here's a look at some of the key findings from the third quarter of 2011:
- Banks reported a profit of $35.3 billion in Q3 -- an $11.5 billion improvement from Q3 2010.
- The FDIC's "problem list" shrank from 865 to 844.
- The deposit insurance fund nearly doubled -- from $3.9 billion in Q2 to $7.8 billion in Q3.
Which banks will be most thankful? If you're judging by the amount of acquired deposits, that distinction will be awarded to the 10 biggest banks in the country, which were responsible for more than 75 percent of a $279.5 billion increase in deposits.
The report also shows that lending increased, albeit very slowly. With a total uptick of $21.8 billion, loan portfolios only grew by 0.3 percent.
With a surge in profits and a decline in the potential for bank failures, the report shows plenty of reasons why the banking industry can celebrate. Still, FDIC Acting Chairman Martin J. Gruenberg cautions we aren't out of the woods yet in a statement released with the report.
U.S. banks have come a long way from the depths of the financial crisis. Bank balance sheets are stronger in a number of ways, and the industry is generally profitable, but the recovery is by no means complete.
While the report is positive, Gruenberg is right. With a housing market that remains in the dumps, slumping bank stock values and serious issues in the European market, U.S banks continue to face some big challenges as the end of the year approaches.
However, I don't expect readers to feel sorry for the potential woes of the banking industry. With a reported total profit increase of more than $35 billion, I think many account holders will be even less likely to deal with new fees amid claims that financial reform has caused significant pain for banks.
What do you think? Do you think these statistics signal the troubles of the financial crisis are easing? And while they may mean good news for banks, what do they mean for you?