Earnings at financial institutions insured by the Federal Deposit Insurance Corp. continue to strengthen on lower loan-loss provisions with 63% of the banks reporting higher third-quarter results. The FDIC said banks it insures earned $35.3 billion for the three months ended Sept. 30, up 48% from $23.8 billion a year earlier. Bank earnings increased each quarter for two years now and are at the highest level since the second quarter of 2007. The number of banks on the regulator’s problem list decreased for the second straight quarter, yet remains elevated at 844. Total assets at these institutions declined to $339 billion from $372 billion at June 30. Third-quarter bank failures rose to 26 from 22 the prior quarter, and decreased from 41 a year ago. Deposits at American banks rose 3.4% during the third quarter with the 10 largest insured banks accounting for nearly 76% of the growth. Loan portfolios inched up 0.3% as loans to commercial and industrial borrowers increased by $44.8 billion and residential mortgage loan balances rose by $23.7 billion, according to the FDIC. Banks lowered loan loss provisions by nearly 50% to $18.6 billion from $35.1 billion a year earlier, and the number of banks reporting a loss for the three months declined to 14.3% from 19.5% for the year-ago third quarter. “U.S. banks have come a long way from the depths of the financial crisis,” FDIC Acting Chairman Martin Gruenberg said. “Bank balance sheets are stronger in a number of ways, and the industry is generally profitable, but the recovery is by no means complete.” Gruenberg was named acting chair when Sheila Bair announced her decision to leave the regulator in July. The FDIC’s deposit insurance fund balance rose to $7.8 billion from $3.9 billion at June 30, which was the first quarter in the red for the fund in nearly two years. Assessment revenue and fewer expected bank failures led to the strengthening of the DIF balance. Write to Jason Philyaw. Follow him on Twitter: @jrphilyaw.