The Federal Deposit Insurance Corp. is to give a progress report Thursday on the industry's efforts to make profits amid still-volatile conditions.
After four more bank failures on Friday, the FDIC's Quarterly Banking Profile also is to include an update on the state of the Deposit Insurance Fund, which in the first quarter held $13 billion.
In the last FDIC report, in May, the agency reported that banks and thrifts had eked out $7.6 billion of profit in the first quarter, rebounding from a heavy fourth-quarter loss. However, the report indicated trouble spots, too. For example, institutions on the "problem" list had jumped 21%, to 305, and assets on that list rose 38%, to $220 billion.
Meanwhile, the DIF's reserves shrank 21% in the first quarter, and the ratio of reserves to insured deposits fell even further beneath the legally required 1.15%, to 0.27%.
As 59 banks, in all, have failed in the second and third quarters (81 have failed this year), Thursday's report is not expected to show a stronger fund. Friday's four failures cost the FDIC an estimated $3.3 billion, and since late May, failures have cost roughly $11 billion.
The failure Friday of $13.5 billion-asset Guaranty Bank is estimated to cost the agency $3 billion alone. The FDIC sold the Austin thrift to BBVA Compass, a subsidiary of Spain's Banco Bilbao Vizcaya Argentaria. The FDIC also sold CapitalSouth Bank, a $617 million-asset institution in Birmingham, Ala., to Iberiabank in Lafayette, La.; First Coweta Bank, a $167 million-asset institution in Newnan, Ga., to United Bank in Zebulon, and ebank, a $143 million-asset thrift in Atlanta, to Stearns Bank in St. Cloud, Minn.