For the third time this week, I found myself on the FDIC's website to start my day. A glutton for regulatory punishment? More a curiosity to see the agency's latest report card. On the bright side, it shows that the banking industry checked in with an $87.5 billion profit in 2010 (up from a net loss of $10.6 billion a year earlier). Less rosy, four points worth noting as a follow up to my post on Monday about FDIC-assisted transactions:
- Last year, the number of failed banks reached 157, an 18-year high.
- The number of institutions on the FDIC's "Problem List" rose from 860 to 884.
- Total assets of "problem" institutions increased to $390 billion from $379 billion in the prior quarter, but are below the $403 billion reported at year-end 2009.
- While the problem banks has grown for the fifth year in the row, it expects the number of failures to be fewer than last year.
Additionally, the report shows that lending remains weak: total loans and leases fell again during the fourth quarter. Not surprisingly, the agency’s chairwoman, Sheila Bair went on record with her expectation that "industry to take the next step, and begin to build their loan portfolios. The long-term health of both the industry and our economy will depend on a responsible expansion of bank lending.” While not a surprising position, some might be reminded that the banking industry remains under considerable pressure from financial regulations that impact lending activity.