Banks Are Back in Black With $7.6B Profit

U.S. banks and thrifts made a $7.6 billion first-quarter profit, a 60% drop from a year ago but a reversal of a fourth-quarter loss, according the Federal Deposit Insurance Corp.'s quarterly banking profile released Wednesday.

The slight profit was quite an improvement from the $32.1 billion loss reported in the fourth quarter, when so many institutions wrote down goodwill and made extraordinarily large provisions for loan loss reserves. Loan loss provisions were down in the first quarter, but were still higher than a year earlier. Despite the improved first-quarter performance, the FDIC's "problem" institution list grew to 305 from 252 in the period.

For a year-over-year comparison, combined industry earnings were $19.3 billion in the first quarter of 2008. At that time, the FDIC actually said "only $19.3 billion" in describing the first quarter 2008 earnings, an indication that even then, the agency had no idea how bad things would get. ...