Building on 1995's record earnings, commercial banks pulled in profits of $12 billion during the first quarter, an 8.2% increase over the year-earlier period, the Federal Deposit Insurance Corp. said Thursday.

At a news conference, FDIC Chairman Ricki Helfer applauded the earnings increase but described the industry's credit card lending as a "dark spot on the picture."

"Lines of credit offered by commercial banks through credit cards, including loans outstanding and unused commitments, have more than doubled in the four years since March 31, 1992," to $1.17 trillion, she said. "Credit card loans held by commercial banks have increased by 56%" to $203 billion.

Net chargeoffs on credit cards in the first quarter were $2.2 billion, a 63% increase from a year ago, she noted.

Ms. Helfer said more credit card-related losses could be on the horizon as the number of personal bankruptcies continues to soar. A record 253,000 people filed for bankruptcy in the first quarter, she said.

"There is no question that those of us who follow financial statistics find the significant increase in personal bankruptcy be a source of concern," Ms. Helfer said. "I would hope that financial institutions will look at the strong correlation between these two sets of statistics and act accordingly."

Overall, first-quarter net loan chargeoffs totalled $3.6 billion, a 58% increase from the same period last year.

On the brighter side, noncurrent loans - those at least 90 days past due or not accruing interest - have been hovering at record lows during the last two quarters. The percentage of noncurrent loans at the end of this year's first quarter was 1.18%.

Commercial banks' return on average assets was 1.12% in the first quarter, up from 1.1% a year earlier. For the 13th consecutive quarter, banks earned more than $1 for every $100 of average assets.

A 5.9% hike in net interest income to $37.7 billion contributed the most to improved earnings last quarter. Total loans increased by 8.8% to $2.63 trillion.

Higher fee and trading income also boosted first-quarter profits as did securities sales, which added $487 million.

Additionally, the number of "problem" institutions declined during the first quarter to 127 banks with $13 billion in assets. That's a decrease of 17 banks and $4 billion in assets since yearend.

Industry consolidation continued at full force during the quarter, Ms. Helfer said. The number of insured commercial banks declined by 100 to 9,841.

As expected, thrifts continued to shift deposits into the less costly Bank Insurance Fund. Ms. Helfer attributed the $7.5 billion first-quarter decline in Savings Association Insurance Fund deposits held by thrifts to two factors.

First, a number of bank fund-insured institutions purchased SAIF- assessable deposits in the first quarter - bumping up such institutions' percentage of thrift fund deposits to 31.2% .

Second, Golden West Financial Corp., Oakland, Calif., shifted $3 billion in deposits from World Savings and Loan Association - insured by the thrift fund - to bank fund-insured World Savings Bank.

Ms. Helfer said that by doing so, the thrift shaved approximately $15 million off its annual deposit insurance premium.

"I would hope that those interested in migrating deposits would put the same level of effort into working for passage of legislation to capitalize SAIF and make it viable," Ms. Helfer said.

During the first quarter, the undercapitalized thrift insurance fund grew to $3.7 billion - or a reserve ratio of 0.51% - still well below the 1.25% required by law. The thrift fund's reserve ratio was 0.47% at yearend.

The healthy Bank Insurance Fund's reserve ratio increased slightly in the first quarter to 1.31%. During the fourth quarter, the bank fund had dropped for the first time in years - to 1.30%.

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