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Bank and Thrift Earnings Set Fourth Consecutive Annual Record in 2004
Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reported net income of $123 billion in 2004, surpassing the previous record total of $120.5 billion in 2003 and representing the fourth consecutive year that industry earnings set a new record. Fourth-quarter earnings of $31.8 billion represented the industry's third-best quarter ever. Insured institutions experienced strong loan growth and lower loan losses during the fourth quarter although these improvements were offset by merger expenses at large banks and lower gains on sales of securities.
"Banks are meeting the challenges of today's competitive financial marketplace," said FDIC Chairman Don Powell. "The industry is in excellent financial condition and appears well positioned to continue its strong performance."
Preliminary results for the fourth quarter and full year are contained in the FDIC's Quarterly Banking Profile, which was released today. Among the major findings in the fourth-quarter report:
The FDIC's Bank Insurance Fund (BIF) ended the year with a reserve ratio of 1.30 percent compared to 1.32 percent at the end of September. The reserve ratio of the Savings Association Insurance Fund (SAIF) increased from 1.33 percent to 1.34 percent during the fourth quarter.
The complete report is available on the FDIC Web site at http://www2.fdic.gov/qbp/index.asp.
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Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 8,975 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.
FDIC press releases and other information are available on the Internet via the World Wide Web at www.fdic.gov and may also be obtained through the FDIC's Public Information Center (877-275-3342 or (703) 562-2200).
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