The recession-battered banking industry during the first three months of 2009 as FDIC-insured institutions reported a $7.6 billion net income, compared with $19.3 billion during the first quarter of 2008, the agency reported. The results were an improvement over the fourth quarter of 2008 when the institutions had a $26.2 billion net loss.
These institutions set aside $60.9 billion in provisions for loan losses in the first quarter, an increase of 63.6% from the first quarter of 2008. Expenses for goodwill impairment and other intangible asset expenses totaled $7.2 billion, up from $2.8 billion a year earlier.
The FDIC also reported that the institutions it insured charged off $37.8 billion in bad loans during the first quarter, compared with $37.9 billion in the fourth quarter of 2008 and $19.6 billion during the first quarter of 2008.
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On the brighter side, since the beginning of 2009, noninterest income increased 12.8%, net interest income increased 4.7%, and realized gains on securities and other assets increased by $1.9 billion.
"The first quarter results are telling us that the banking industry still faces tremendous challenges, and that going forward, asset quality remains a major concern," FDIC Chairman Sheila C. Bair said in a statement. "As I see it, we're now in the clean-up phase for the banking industry."
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