Banks and financial firms insured by the Federal Deposit Insurance Corp. posted earnings of $34.7 billion in the fourth quarter of 2012, a $9.3 billion rise from a profit of $25.3 billion a year earlier.

This is the 14th straight quarter of year-over-year earnings increases. The improvement in annual earnings is attributed to higher non-interest income and lower provisions for loan losses at financial firms.

"The improving trend that began more than three years ago gained further ground in the fourth quarter," said FDIC Chairman Martin Gruenberg. "Balances of troubled loans declined, earnings rose from a year ago, and more institutions of all sizes showed improved performance."

The industry overall earned $141.3 billion in 2012, which is up 19.3% from 2011. That's the second-highest earnings ever reported by the industry since it earned $145.2 billion in 2006.

Total loan balances rose by $118.2 billion, 1.6%. Among the rising loans, loans to commercial and industrial borrowers grew by $53.4 billion. Credit card balances reported a seasonal increase of $28.2 billion, and loans secured by nonfarm nonresidential real estate properties increased by $14.6 billion.

Meanwhile, home equity lines of credit decreased by $12.6 billion, and real estate construction and development loans fell by $6.6 billion.  

"Growth in lending continues to be led by commercial and industrial loans," said Gruenberg. "Insured institutions of all sizes increased their loan balances during the quarter."

The net worth of the Deposit Insurance Fund continued to increase. The balance of the fund rose to $33.0 billion by December 31, which is up from $25.2 billion back in September.

The fund grew from assessment income and a decline in estimated losses from bank failures. The DIF also received an additional $1.8 billion that was originally set aside for the for debt guarantees under the FDIC’s Temporary Liquidity Guarantee Program, once the program ended.