Banks Have Just Lost Their Biggest Profit Center – What Will Replace Billions of Profits from Loan-Loss Releases?

loan reserves

During the past five years bankers have reaped billions of dollars in profits by simply making accounting entries instead of making loans. What was the biggest source of banking industry profit growth over the past five years?  As noted repeatedly in FDIC Quarterly Banking Profile reports, the biggest contribution to earnings growth has come from […]

Over 8,500 Banks Have Disappeared Since 1990 – “Too Big to Fail” Remains a Banking Reality

Assets FDIC Insured I

The latest FDIC Quarterly Banking Profile highlights the sharp decline in the number of banks over the past 24 years. For the quarter ending September 30, 2014 the number of FDIC insured institutions totaled 6,589 down by 56 percent from a total of 15,158 in 1990.  Since December 1998 the number of banks has dropped […]

Banking Industry Profits and Revenues Show Strong Increase in 2014 Third Quarter

Bank

The latest FDIC Quarterly Banking Profile for the quarter ending September 30, 2014 shows a strong increase in both profits and revenues as the recovery in the banking industry continues. Banking industry profits rose to $38.7 billion during the third quarter, up by $2.6 billion or 7.3 percent from $36.1 billion in the comparable prior […]

Fed Reports Sharp Increase in Banking Mergers and Acquisitions

federal-reserve

The first semiannual report on banking applications activity by the Federal Reserve shows a sharp increase in mergers and acquisitions during the first six months of 2014. The Federal Reserve, as one of the primary U.S. regulators, reviews applications from bank holding companies, state member banks, foreign banking organizations, and  savings and loan companies.  Applications […]

Almost Half of Americans Expect Higher Mortgage Rates and Higher Home Prices

new-home

The latest national housing survey conducted by Fannie Mae shows that many Americans expect to see both higher mortgage rates and rising home prices over the next year.  It will be interesting to see how this paradox unfolds since an increase in mortgage rates has typically made housing less affordable to buyers. One scenario under […]

Frontier Bank, FSB, Palm Desert, CA, Closed by Regulators – 17th Bank Failure of 2014

FB

The seventeenth bank failure of the year occurred in California today as regulators shuttered the Frontier Bank, FSB, a small bank headquartered in Palm Desert, CA doing business as El Paseo Bank. The Office of the Comptroller of the Currency closed Frontier Bank and appointed the FDIC as receiver which in turn sold the failed […]

Largest Bank Failure of 2014 – The National Republic Bank of Chicago

fdic

Illinois has been a tough place for banks this year.  A third of all bank failures during 2014 have occurred in Illinois and the collapse of The National Republic Bank of Chicago also gives Illinois the distinction of having the nation’s largest bank failure. The National Republic Bank of Chicago, Chicago, Illinois, (TNRBC) was shuttered […]

Hedge Fund Makes Huge Bet On Flagstar Bancorp

courtesy: yahoo finance

Would you invest almost all of your money in Flagstar Bancorp? Managing investment risk through diversification is often cited as one of the most important rules for successful investment.  The future performance of a company is impossible to reliably predict since it is subject to countless unknown variables. Since the future prospects of a business […]

NBRS Financial, Rising Sun, MD, Becomes 15th Bank Failure of 2014

Courtesy: yahoo finance

The Maryland Office of the Commissioner of Financial Regulation closed today NBRS Financial, Rising Sun, Maryland, and appointed the FDIC as receiver.  The FDIC in turn sold the failed bank to Howard Bank, Elliott City, Maryland, which will assume all deposits of NBRS Financial. NBRS Financial was originally founded in 1873 under the name The […]

How Much Risk Are Banks Taking With Credit Card Lending?

NIM

Savers aren’t the only ones being hurt by the Federal Reserve’s suppression of interest rates.  The Fed’s zero interest rate policy has been a factor in the decline of banks’ net interest margins to a multi-decades low. According to the latest FDIC Quarterly Banking Profile the net interest for all banks for the quarter ending […]