WASHINGTON – Commercial banks and savings institutions had a 94% drop in earnings during the third quarter from the same period last year, the FDIC reported today.
Net income was $1.7 billion between July and September, compared with $28.7 billion during the third quarter of 2007. Last quarter was the second worst since the fourth quarter of 1990.
The agency said much of the declines were the result of higher provisions for loan losses, money set aside in anticipation of future declines.
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The industry lost $7.6 billion on sales of securities and other assets, compared to $77 million during the same period lost year. Noninterest income fell 1.5% from the same time in 2007.
Nine institutions insured by the agency failed during the last quarter, the largest one being Washington Mutual, which had assets of $307 billion and was acquired by J.P. Morgan-Chase.
The agency's list of problem institutions rose from 117 to 171 between July and September, the largest since 1995.
"We've had profound problems in our financial markets that are taking their toll on the real economy. Today's report reflects these challenges," FDIC Chairman Sheila Bair aid in a statement.
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