The FDIC yesterday announced its first quarterly loss since 1990, with insured commercial banks and savings institutions reporting a net loss of $26.2 billion in the fourth quarter of 2008.
That compares to a profit of $575 million in the fourth quarter of 2007, thanks in part to higher loan-loss provisions, losses from trading activities, and goodwill write-downs.
Interestingly, more than two-thirds of FDIC-insured institutions were profitable during the quarter, but their earnings were wiped out by big losses at the larger thrifts.
For all of 2008, insured institutions earned $16.1 billion, an 83.9 percent decline from 2007, and the lowest total since 1990.
During the fourth quarter, 12 banks failed and one received assistance; for all of 2008, 25 institutions failed.
More troubling, however, is that the FDIC’s Problem List grew during the quarter from 171 to 252 institutions, the largest total since mid-1995.
Total assets at problem institutions increased from $115.6 billion to $159 billion; meanwhile the FDIC’s Deposit Insurance Fund (DIF) declined by $16 billion to $19 billion.
Another 14 FDIC-insured banks have failed this year, and it’s not even Friday afternoon yet…
In one bright spot, deposits increased by $307.9 billion, or 3.5 percent, during the quarter, the largest increase in a decade.
As of year-end, nearly 98 percent of all insured institutions met or exceeded regulatory capital standards.