RJ and Makay

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A fourth quarter surge in U.S. bank earnings at the end of last year propelled the industry to its highest level of profitability in five years, according to the Federal Deposit Insurance Corp. (FDIC).  The strong performance along with fewer distressed banks indicates that the sector has significantly healed since the 2008 financial crisis.  Bank earnings grew in the October-December 2011 period to $26.3 billion, a 23% gain from Q4 2010.

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The number of U.S. banks in financial distress continues to decline, according to federal regulators.  The trend is in line with the ninth straight profitable quarter in the banking industry.  The Federal Deposit Insurance Corporation ((FDIC) reported today that there were 844 “problem institutions” at the end of the third quarter, down from 865 at the end of Q2, and a significant reduction from 888 listed at the end of Q1.

After three years of repeated small bank failures across the U.S., bank troubles seem to be easing.  The new development is expected to increase the insurance fund, which protects depositors, into positive territory next month.

In the first quarter of this year, only four lenders were added to the government’s list of so called “problem banks,” bringing the total to 888, the Federal Deposit Insurance Corporation (FDIC) reported on Tuesday.  It represents the smallest quarterly increase since the beginning of the financial crises and is a clear sign that the banking industry is regaining a healthy footing.