The increased loss provisions were the main reason that reserves increased by $18.5 billion, or 18.1%, during the quarter, to $120.9 billion.
The industry's ratio of loss reserves to total loans and leases increased from 1.30% to 1.52%, the highest level since the first quarter of 2004. However, the growth in loss reserves was outstripped by the rise in noncurrent loans, and the industry's "coverage ratio" fell for the eighth consecutive quarter, to 89 cents in reserves for every $1 of noncurrent loans from 93 cents at the end of 2007. This is the lowest level for the coverage ratio since the first quarter of 1993, FDIC reports.
Insured institutions charged-off $19.6 billion (net) in all types of loans during the first quarter, an increase of $11.4 billion or 139.1% over the first quarter of 2007. The annualized net charge-off rate in the first quarter rose to 0.99%, more than double the 0.45% rate of a year earlier and the highest quarterly net charge-off rate since the fourth quarter of 2001, according to FDIC.
