FDIC ‘Problem’ Banks Shrink, First Time Since ’06

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http://www.bloomberg.com/news/2011-08-23/fdic-s-problem-bank-list-shrinks-for-first-time-since-2006.html

FDIC ‘Problem’ Banks Shrink, First Time Since ’06

The Federal Deposit Insurance Corp.’s list of “problem” banks fell in the second quarter for the first time since 2006 as the industry’s income improved and costs tied to bad loans eased.

The confidential list of banks deemed at greater risk of collapse shrank by 23 firms to 865, the FDIC said today in its Quarterly Banking Profile. The last time that happened was the third quarter of 2006 before the credit crisis began, the agency said. Net income rose 38 percent to $28.8 billion from a year earlier, the eighth consecutive quarterly improvement, boosted by a seventh straight drop in provisions for bad loans.

“Banks have continued to make gradual but steady progress in recovering from the financial market turmoil and severe recession that unfolded from 2007 through 2009,” Martin Gruenberg, the FDIC’s acting chairman, said today in a statement. The FDIC defines “problem” institutions as those with financial, operational or managerial weaknesses that threaten their viability.

Lenders put aside 53 percent less money to cover bad loans and charge-offs dropped 42 percent. The $20.9 billion decline in charge-offs was the largest since the recovery in credit quality began, the FDIC said.

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1. “Banks have continued to make gradual but steady progress in recovering..."

by looting the treasury and bilking their customers. :grr: