Most large U.S. regional banks reported stronger third-quarter results than they did earlier in the year, according to Standard & Poor's Ratings Services.
S&P said all the regional U.S. banks it rates remained profitable in the third quarter, as did the large trust banks, prompting some to raise their dividends and consider share buybacks.
"Reported net income declined only modestly from the second quarter, primarily because of somewhat higher loan-loss provisions, while asset quality continued to improve," analyst Robert Hansen said.
S&P said Friday it expects large U.S. regional banks' credit costs will continue to ease over the next several quarters amid a sluggish economic recovery. Loan-loss provisions will also likely decrease because of fewer new problem loans and nonperforming loans.
The ratings service still maintains a stable outlook on most of the banks because of gradually improving industrywide fundamentals.