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Banks hit another earnings record in the second quarter, but there were other pieces of good news tucked away inside the Federal Deposit Insurance Corp.'s recently released Quarterly Banking Profile as well. From better credit quality to a falling number of "problem" banks, the industry had a lot to celebrate even if it must also face the grim prospect that falling loan loss provisions won't boost earnings much longer.
Credit Quality Continues to Improve
Noncurrent loans fell for the 13th straight quarter, dropping $21.7 billion in the second quarter. Charge-offs, meanwhile, were at their lowest level since 2007, dropping 30% from a year earlier to $14.2 billion.