US bank earnings in Q2 climbed 1.4 percent to $43.6B

Henrietta Brewer
August 30, 2016

In addition, "surcharge assessments" to hold these 113 banks exclusively responsible for bringing the fund to 1.35 percent (as required under Dodd-Frank), commence this quarter. But she stopped short of offering any timetable.

Many large banks, meanwhile, will pay surcharges in addition to regular assessments, part of a law meant to increase the amount of money in the fund.

Total credits increased 1.5 per cent, US$241 billion, in the second quarter driven largely by new home loans and real estate credits, the regulator said on Tuesday. With this increase, the fund surpassed a target of 1.15 percent to trigger important changes in the FDIC assessments for all banks.

Total loans and leases were $76.8 billion at the end of the second quarter, up from $73.3 billion at the same time past year.

The number of financial institutions on the FDIC's "problem list" shrank to 147, the lowest in more than seven years.

Continued evidence of strong lending growth should give further reassurance as to the prospects for both banks and the broader economy.

Total interest expense was $194.4 million in the first six months of the year, up from $175 million in the first half of 2015. The KBW Nasdaq Bank Index is down around 2% this year, compared with a 6.7% gain for the S&P 500. They are down sharply from 157 in 2010 - the most in one year since the height of the savings and loan crisis in 1992. The fund, which turned from deficit to positive in the second quarter of 2011, had a $77.9 billion balance at the end of June, according to the FDIC.

Banks with under $10 billion in assets will see their overall reduction schedule decline by two basis points for banks paying the lowest premiums and up to five points for those at the top end of the assessment scale.

The FDIC was created during the Great Depression to insure bank deposits. It monitors and examines the financial condition of US banks.

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