Banks report small profit but ‘problem’ list jumps
Banks earn $914 million in fourth quarter, but number of problem banks jumps above 700
WASHINGTON (AP) — America’s banks eked out a small profit in the fourth quarter as the economy recovered, but the number of banks considered troubled jumped to more than 700, the government reported Tuesday.
The Federal Deposit Insurance Corp. said banks essentially broke even in the October-December period. They earned $914 million, compared with a $37.8 billion loss in the fourth quarter of 2008.
Still, the number of banks on the FDIC’s confidential “problem” list leaped to 702 from 552 in the third quarter, the FDIC said.
Most of the improvement in earnings was due to the largest banks. But signs emerged of a broader positive trend in the industry, the FDIC said. For the first time in three years, more than half the 8,000 or so federally insured banks and thrifts reported higher income compared with the year-earlier quarter.
Delinquencies on commercial real estate loans remain a source of trouble. A wave of defaults on such loans could cause more banks to fail, FDIC officials and experts say. Regional banks, in particular, hold many commercial real estate loans.
Last year, 140 federally insured institutions failed and were shut down by regulators. They extended a string of collapses that began in 2008 amid the weakened economy and a cascade of loan defaults. So far this year, 20 banks have failed. That compares with 25 in all of 2008 and three in 2007.
The failures pushed the deposit insurance fund into the red last year. It was $20.9 billion in deficit as of Dec. 31, the FDIC reported. That compared with a positive balance of $17.3 billion at the end of 2008.
The agency expects U.S. bank failures to cost the insurance fund around $100 billion through 2013.
The 702 troubled banks on the FDIC list is the most since the height of the savings-and-loan crisis during the early 1990s. The combined assets of those banks was $402.8 billion.
For all of 2009, banks earned $12.5 billion, up from $4.5 billion in 2008.
Marcy Gordon, AP Business Writer, On Tuesday February 23, 2010, 10:35 am
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Jim has worked as a Portfolio Manager & Financial Advisor since 1996. In May 2005, Jim founded WHI Financial Services, LLC, WHIFinancial.com, a Registered Investment Advisory firm, with headquarters in Texas. His primary focus is on portfolio management, financial & retirement planning, and financial advisory & insurance services. Jim manages investment portfolios & advises individuals, small to mid-size companies, and non-profit organizations on a variety of financial and business issues.
Prior to founding WHI Financial Services, LLC, Jim worked as a portfolio manager & financial advisor for two international investment firms. From 2001 to 2005, Jim worked with Prudential Securities (merger with Wachovia Securities, now Wells Fargo Financial Advisors), and from 1996 to 2001, he was working with Merrill Lynch. While working with both Wachovia Securities and Merrill Lynch, Jim enjoyed dual responsibilities as a portfolio manager, financial advisor and leader of the Professional Development Program.
Jim's responsibilities as leader of the Professional Development Program included, recruiting, interviewing, training, and overseeing the daily operations of all financial advisors involved in the Professional Development Program. Jim was responsible for managing between 10-20 advisors, while still managing his own client investment accounts.
In addition to his experience in the financial services area, Jim has been involved in several start-up companies. Jim's Philanthropic work includes serving as President/Treasurer of a private foundation established to provide non-profit organizations financial assistance, and Chairman/President of the Believe In Your Dreams Foundation. In 2007, Jim established the Believe In Your Dreams Foundation, a 501(c)3 organization, to help individuals who are suffering from life-altering circumstances beyond their control.
Jim has taught investment, insurance, and credit repair classes through continuing education at universities in CA & TX since 1997. Jim attended the University of Minnesota where his focus was Management & Marketing.
Jim has recently written two books, one called "Your Financial Lifecycle" a book which describes several key investment topics everyone will face throughout their life, and a book titled, "The Truth about Your Credit Score", which defines how credit scores are calculated and how you can increase your credit score, including templates which you can use to send to creditors.
Jim's books can be purchased on Amazon.com, via Author search, or by emailing him directly at JimWigen@GetWealthyStayWealthy.com.
In the Fall of 2011, Jim will be starting his radio show called, The Jim Wigen Show, Teaching You to Get Wealthy & Stay Wealthy. You can hear his shows through streaming audio by visiting JimWigen.com.
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