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FDIC report: N.Y. commercial bank net income decreases as banks face profitability challenges

Martin Gruenberg

The latest quarterly banking report released by the FDIC revealed that year-to-date net income for New York’s commercial banks has decreased as more institutions grapple with profitability.

Net income for 117 commercial banks totaled $3.8 billion for the first three quarters of the year, a 9.6 percent decrease compared to $4.3 billion during the first three quarters of 2011, The Business Review reports.

The percentage of unprofitable commercial banks, meanwhile, rose 6.84 percent during the third quarter of the year, increasing from 4.2 percent during the third quarter of 2011.

More than 25 percent of New York’s smaller commercial banks – institutions with less than $100 million in assets – did not earn a profit. Fewer than four percent of larger commercial banks were unprofitable, according to The Business Review.

Additionally, the same report revealed that net income for savings and commercial institutions nationwide totaled $37.6 million for the quarter, a 6.6 percent increase from last year and the highest quarterly total since 2006.

“This was another quarter of gradual but steady recovery for FDIC-insured institutions,” Martin Gruenberg, the chairman of the FDIC, said, The Business Review reports. “Signs of further progress were evident in a number of indicators, such as loan growth, asset quality and profitability.”

The FDIC said that more than 57 percent of all institutions reported higher quarterly net income versus one year ago, while the share of institutions reporting net losses fell from 14.6 percent to 10.5 percent for the quarter.

Deposits at commercial banks in New York rose to $519.9 billion during the third quarter of 2012 from $461.3 billion during the third quarter of 2011. Assets also increased, totaling $695.2 billion as of Sept. 30, according to The Business Review.

Twelve FDIC-insured institutions failed during the third quarter, the lowest number since the fourth quarter of 2008.

The FDIC also said that the number of “problem” banks fell from 732 to 694, and no new banking charters were issued during the quarter. A new charter has not been issued since the fourth quarter of 2010, The Business Review reports.

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